Questions tagged [call-options]

A call option is a contract giving the owner the right, but not the obligation, to buy a specified amount of an underlying security at a pre-determined price within a specified time frame. Related tags are icall-options, options, options-assignment, option-exercise and should be used when appropriate.

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why volatility increases price for ITM call options?

Similar questions have been asked here, but I'm not able to find this exact question. For a European call option, if it's very in-the-money, wouldn't a higher volatility decrease the probability it ...
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Suggestion to recover from a bad naked call

I sold a Jan 2026 CRWD $140 Call, and now the price skyrocket to 235 (I know, bad move) How do one usually get out of this situation? Many thanks.
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Can you effectively reduce the cost of a long call on an index with a synthetic long and married put (e.g. replicate an XSP call using SPX options)?

Imagine you want to use periodic cashflows to purchase deep-in-the-money LEAPS (>1yr expiration calls) on SPX, but the size of the cashflows are too small to do so consistently (the cost of such a ...
Thomas's user avatar
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Question about CC

I think I'm confused about parts of the CC process. If you're feeling charitable please help a brother out. My understanding: I buy 100 shares of ABC @ $25 (5 days duration) Sell 1 CC contract of ABC ...
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Can in-the-money covered calls be rolled indefinitely?

A bit of history: I worked at a company that granted me a bunch of META shares. So my initial cost for these shares is $0. I have never actually traded options before in my life. I find myself in a ...
Sonicsmooth's user avatar
3 votes
1 answer
284 views

Explaining equity being analogous to a call option and bonds being equivalent to a short put

I read this: Equity in a corporation is essentially a call option on the enterprise value (the sum of all the firm’s assets) with a strike price equal to the firm’s debt. The firm’s bonds are a risk-...
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DOW Mini Futures Options Liquidity - Symbol YM

I am trading on the Interactive Brokers TWS platform. That is the name of the broker and the platform they offer that I use. I have noticed that there is almost no liquidity on the YM Mini option ...
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Breakeven for debit spread

How are the Max Gain and Break Even calculated here on Fidelity? I thought the breakeven would be the strike price of the long call plus the net debit: $16 + $6.03 = $22.03 And the max gain would be ...
Quaxton Hale's user avatar
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6 answers
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Why call options are more profitable compared to stock trading?

I am having a hard time trying to understand why buying call options are more profitable (if you predict the market right), compared to selling & buying stocks right away. Let me explain my ...
Frenk Frenk's user avatar
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Option breakeven

If a 50 call is sold for a $4 premium (exclude commission for this illustration), the buyer's breakeven on the trade is 54 (i.e. 50+4). Correct? As the seller of that call, is it correct to calculate ...
Tony DeVito's user avatar
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selling covered calls below my average cost

I have this stock more than 2 yrs and wont go up , I am planning to sell covered calls all my shares just to return my capital ... example my average cost is 5 and I am planning to sell it at a strike ...
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Finance: replicating portfolio for a European option

The replicating portfolio for a European call option involves a long position in A , while the replicating portfolio for a European put option involves a short position in A . Can you explain why this ...
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IV applied to Buying Vs. Selling Option Contracts!

Is low IV (Implied Volatility) good for selling or buying options?
Youtubecomgoldminemusicinfo's user avatar
1 vote
1 answer
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ITM Option Expiration

Why can't I wait until the last minute before close of trading on expiration day to sell an ITM call option I am long? Why must the broker sell it 1 hour before close? What is the risk to the broker ...
Albert's user avatar
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If I sell to close an ITM call option days before expiration, am I liable for any call outs?

If I sell to close an ITM call option days before expiration, am I liable for any call outs?
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Why is simply buying an in-money-call and a lower strike price put near an event date a good low-risk high-reward strategy?

My premise is that buying both an in-money-call and an lower strike price put near an event date, is perhaps, one of the better low-risk high-reward strategy. Why? If the stock moves significantly ...
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'Inversion' of option chain: calls are more expensive than puts above the strike price! GME

Over the past two days there has been a weird phenomena on GameStop's options where the call options are more expensive than the put options above the strike price. I would have imagined that some ...
Stephan Luis's user avatar
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How to estimate or determine leverage from strike price on ITM call option?

In this text 4x leverage is mentioned: "ITM call options have a strike (X) below spot price (S). ITM call option position is determined by aiming for ~4x leverage. The position size is set at 33%...
Norbert's user avatar
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What's the negative about buying contracts 1 month out when scalping options? (Is it buying same day or 2-3 day contracts are way cheaper?)

What's the negative about buying contracts 1 month out when scalping options? (Is it buying same day or 2-3 day contracts are way cheaper?) I don't want Theta to negatively affect my gains.
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What effects does a change in IV on the call side have on the put side?

In a European type options market, consider this scenario, where someone starts to buy call options very aggressively which increases call IV rapidly. At the same time, the underlying price remains ...
Vaibhav Sharma's user avatar
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Can I take profit in option trading if

If the current price of a stock is at 2000 and I take a call option buy at strike price 2100 weekly expiry with 80 ltp. Suppose now ltp increases by 5 points and yet the price does not go above 2100, ...
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How to value cash as a call option?

Recently came across this article regarding Warren Buffett's biographer from 2012: “This is one of the most important things I learned from him: the optionality of cash. He thinks of cash as a call ...
lampShadesDrifter's user avatar
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Do I need to worry about dividends when trading credit spreads?

I trade in the options market, mostly with vertical credit spreads. If one of my underlyings has a dividend coming up, does that affect my holdings? My guess is that the short and long position would ...
PropositionJoe's user avatar
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Is there any difference between placing a "buy & sell call option" & "buy & sell put option"?

I have attached two Options order charts. Max profit & loss are the same. But one (put) costs less than the other (call). Is there any real difference between these two orders? Is there any real ...
Maddyboy's user avatar
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What is the Arbitrage opportunity and strategy here?

Suppose that the current stock price is €100, the exercise price is €100, the annually compounded interest rate is 5 percent, the stock pays a €1 dividend in the next instant, and the quoted call ...
Win_odd Dhamnekar's user avatar
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1 answer
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Long ratio put spread versus call strategy for stock of ABC company

Part(1) Long ratio put spread versus call strategy for ABC company Current market price:$639, view: moderately bearish Buy 2 February 630 Puts@ 35.00 Sell 1 February 660 Put@ 52.00 Sell 2 February 690 ...
Win_odd Dhamnekar's user avatar
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3 answers
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What is the downside for covered call options?

What is the downside of selling covered calls on the stocks or ETFs you own that have appreciated significantly from their original purchase price?
DEEM's user avatar
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Does, buying a put involve someone to sell a call?

Does, buying a put involve someone to sell a call ?. When a trade to buy put is made from one side does it means someone is selling a call from other side. ?
nish's user avatar
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What happens to the 100 shares if someone "sell to close" their call option position?

Allow me to explain. Let's say I sell 1 covered call and receive the premium. When I sell a call, I am assuming that someone on the other end would have bought my call (say Nora). If the share price ...
Rishab Gupta's user avatar
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option best ask doesn't move unless I place an order lower than the best ask

as in the picture.Before I placed an order.The best ask was 0.35 and did not move at all.This option's volume was very low. And then I placed a 0.30 sell order, size was 73. Suddenly the best ask size ...
oyss's user avatar
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When are premiums received for selling covered calls/naked puts realized?

For example, if I were to buy 100 shares in APPL today and sell a covered call option with an expiration year of 2022, would the premium that I receive be realized upon sale or when the option expires ...
ARJ's user avatar
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2 answers
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Calculating put-call ratio when volume is @0

So i have to do a put-call ratio plot. However i have to decide between using open interest and volume to calculate PCR. But in our data, the volume for some put/call options are 0. Is there a way to ...
Ryan Chen's user avatar
1 vote
1 answer
66 views

Near expiration call options

Suppose I buy a call option for a stock (current price is $5) for $500 and a $0.5 strike price that expires in a year. The year is almost up (say its the last day 3 hours before expiration), the stock ...
SteveRodgers43's user avatar
1 vote
1 answer
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How does expiration/assignment work in synthetic covered call

What happens if I let a short call expire worthless on a synthetic long stock I've purchased. Here's my scenario. Bought a CALL @ 870 and sold a PUT @ 870 both expiring in 177 days. Also sold a CALL @ ...
Anonymous's user avatar
-1 votes
3 answers
84 views

How much LEAPS can lose with deep in-the-money strike price?

This is the scenario. The current price of a stock is $100. I buy a CALL $50 strike that expires in 2 years contract for $10,000. An year later the price of the stock drops to $80 and float around ...
wonderful world's user avatar
1 vote
1 answer
88 views

Covered call buy-to-close using sale of underlying?

If I write a covered call, my account will be long the underlying and short a call. Say I withdraw the premium from my brokerage account and spend it, invest it elsewhere, etc. If I want to later sell ...
Maximillian Laumeister's user avatar
2 votes
1 answer
530 views

Why ATM Call Options have larger negative theta compare to OTM and ITM?

Why do ATM Call Options have larger negative theta? For the same ATM Call Options, why smaller expiration, the more negative the theta? Can someone provide intuitions or explanations?
quant_to_be's user avatar
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1 answer
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How to manage covered call position when stock price goes down

So let's say you have a position like this bought 100 shares of XYZ at $50 sold 1 covered call at $55 strike, received a premium of $2 stock price goes down to $35 now premiums for strike prices ...
Anonymous's user avatar
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4 answers
103 views

Selling Covered Calls p/l

I recently entered the options trading market to start generating a passive income on stocks I intend to keep for the foreseeable future. I entered a position on a pharma play with 100 stocks @ $2.70 ...
Sarthak Saxena's user avatar
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1 answer
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Short options trade ITM assignment criteria

Can someone please explain something about the option spreads? How come this broker is not exercising these short options in this video as they are deep in the money? https://www.youtube.com/watch?v=...
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Writing call options, when do I receive premium?

I own 100 shares of a stock and I would like to get into writing covered calls. I'm just curious: If I write a contract, do I immediately receive payment for it from my broker? Or do I have to wait ...
Liam F-A's user avatar
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2 answers
148 views

May I get more than the strike price difference when roll up an ITM call option?

I have an in-the-money call option that expires shortly and I see further upward potential of the underlying stock, so I decide to roll over to a longer expiration date. Now, if I choose to roll up to ...
StopBuy's user avatar
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1 answer
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(Stock)/Option Positions

I'm studying for my SIE, and I have a question along the lines of Difference between naked put, covered put, protective put. Can someone help me fill in my "??"'s? "Long (stock)/Long ...
Jeffrey Rolland's user avatar
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What will be the impact of time decay on Options Premium?

Let's say you have bought a July Nifty CE or PE in June at Rs. 250 premium. Can you explain how its premium will change over time if nifty increases/decreases towards your strike price? Basically I ...
Selvam's user avatar
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How does strike price and assignments work

At the beginning of the week, a stock is $45. A one week $50 call is purchased. On Wednesday the stock fluctuates between $44 and $55, closing at $49. What price info is used to calculate if an ...
Ayusman's user avatar
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Owning OTM Calls on a company that was acquired

I own 10 $stay calls exp 7/18 but they were purchased this week and the ticker no longer exists. Am I screwed? I can't find anything online.
Bob Johnson's user avatar
2 votes
2 answers
121 views

Option chain with nil bid quantity and price

Let's assume I bought a call option ABC CE @.50 and now its value is @.10. There is no bid price or bid quantity. Am I able to sell the option at @.10 anyway?
Paras's user avatar
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If I short an option and the buyer exercises the contract, what will happen?

Let's say that I'm on TDAmeritrade. I short a call option to collect a premium. I also own 100 shares of the same stock in the same account. In a week, the option is in-the-money and the buyer ...
user1187968's user avatar
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1 answer
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Should I sell to open or sell to close

If I have inherited stocks through employer provided stocks (RSU). I haven't ever placed a "Buy to open" trade. If I want to sell a CALL option and place a trade (say current stock price is $...
Ayusman's user avatar
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3 votes
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Who are the non-speculative buyers of futures options?

I am trying to understand who would be a non-speculative buyer of options contracts on futures. There are a plenty of descriptions of how options work online, but mostly they omit this crucial part of ...
Tony Sepia's user avatar

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