Questions tagged [call-options]

This tag is to be used for any question on call-options. i.e. an agreement or right to buy a stock or commodity at a specific price. Related tags [put-options, options, options-assignment, option-exercise] should be used when appropriate.

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33 views

Buying stocks for CALL OPTIONS that losing value

This is the scenario. Trader bought a CALL OPTION contract with a strike price of $15 of a stock XYZ that expires in a month. But the price went down to $12 in a week. The Trader sees this stock can ...
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4answers
8k views

Why do people exercise call options at a loss?

I sold some call options for $2.55 premium at strike price of $130. At expiration, the market price was $130.55. I thought the option was not deep in the money and at a loss of $2, hence I didn't ...
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1answer
60 views

Calculations Check on $SPY Strangle

I'm researching options strategies and I started paper trading a $SPY options. Here's my strategy: Set up a strangle 5% above and below the market price expiring a month from the day of trade. 12 ...
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2answers
105 views

Is it necessary to have 100 x strike price in cash or margin before entering a naked call credit spread?

Context I have no background in Finance but I have many years experience in investing in equities for my personal portfolio so I have a basic understanding I have never traded options I'm keen to ...
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1answer
62 views

Is it better to buy the stock over a long call if volatility is high?

I've been looking at buying long calls of $ZM, but when calculating my P/L i'm thinking it's basically a wash to buy the option and might as well just buy the stock. Wondering if this is true or if ...
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3answers
194 views

Selling covered calls does not make sense

I have one bitcoin and was thinking about selling call while owning the asset. However after some pondering I came to the conclusion that if price drops then the strategy can only be performed one ...
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1answer
133 views

If you're bullish, buy stock or call options?

Presuppose that you believe a stock to rise in price. What are the pros and cons of buying a stock vs call option? Aristofanis Papadatos disadvises buying calls: When investors purchase call ...
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2answers
152 views

Buying call options without enough money to exercise

I'm starting to dabble with options and I bought the March 20 AAPL 330 call option for $5. AAPL is currently trading around $324 today. If I sell the call option today I will make a small profit on my ...
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1answer
63 views

Selling a call option

There has been a lot of discussion about selling a call option. I read a good number of explanations but I didn't get clarity on this. Let's say a stock is trading at $80 per share and I sell a Feb ...
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1answer
86 views

How do you go from a belief a stock will be a certain value to choosing a call option?

I'm familiar with stock trading and watching for market news and basic things like that. I have money I'm willing to lose to learn options trading. I have some stocks with earnings reports coming up, ...
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1answer
18 views

Sell the long on a debit spread to move it closer to the short?

I’ve been thinking about opening a wide bullish debit spread on SPY with a two month time to expiry. I’m currently looking at the March 20th calls and am thinking of selling the $425 call while ...
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2answers
35 views

Impact of Open Interest or Volume to the Price

The following is the Option Chain for the symbol UBER. There is a high Interest for 40 CALL. There is less interest for 40 PUT. My questions are: What is the difference between VOLUME and OPEN ...
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1answer
71 views

notional value of a call option

I have some call options that are in the money and I'm trying to work out the calculation the platform uses to calculate absolute exposure. Open = 3.55 Close = 5.35 contracts = 8 They arrive at ...
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2answers
161 views

Why can’t I seem to purchase this option?

I’m using Robinhood, and I’m new to options trading. A co-worker is teaching me about options trading, and recommended I start with cheaper long term options to learn with since I’ll lose less money ...
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1answer
45 views

how to calculate profit of call option

I am trying to calculate the point at which exercising a call option would be profitable. I am looking at a call option for AAPL. The strike price is $320 and expires March 18th 2020. The price for ...
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2answers
93 views

How does taking profits from a CALL option contract work?

From the question you can probably tell I have not traded options before. My question is essentially this scenario. Lets say I buy an CALL options contract for a certain stock, probably for 100 shares,...
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2answers
29 views

How to find the limit price at a strike price for a future date?

In the chart, the current price of the underlying is 135. The last price of the option is 23.58. BID is 23.00 and the ASK is 23.90. I want to wait until the price of the underlying drops to 125 and ...
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1answer
43 views

Understanding the visual representation of a Calendar Spread

The following plot and its context were taken from Hull`s Options, Futures and Other Derivative Securities (2002). I am slowly getting the basics of financial mathematics and came across this plot ...
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1answer
48 views

What is the reason behind the trader bought OTM option?

The following is the option alert for UBER stock. I interpret this as the trader bought 19 CALL option contracts at the strike price of $31. He should have chosen the strike price of $29 or $30. I ...
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1answer
135 views

What do these Option Alerts mean?

What do these Option Alerts mean? Uber Technologies Option Alert: Jan 17 $31 Calls Sweep (19) near the Ask: 1000 @ $0.6 vs 5648 OI; Earnings 2/4 Before Open [est] Ref=$28.695 Slack Technologies ...
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2answers
118 views

Buying put options on the day of expiry and the result

This article covers a trade of $270 Strike CALL expiring on December 6th. My questions are: Can you buy a put or a call on the day of expiration? What will be this trader's speculation? The US Jobs ...
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1answer
48 views

What option exit strategies and history can be used if I want to take the profit before the expiration?

I created a P/L graph for 2 CALL OPTION contracts XYZ Jan 15 2021 120 Call. I want to take some profit before the expiration of January 15, 2021. What technical data that I can use to figure out a ...
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1answer
105 views

Selling PUT and CALL

The Option Chain of a stock is given below. The stock price now is $22.50. If I sell a $21 put, I'll receive a premium of 15 cents and I will be obligated to buy the stock at $21 if it is below $21 ...
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1answer
55 views

Strangle Vs Long Call LEAPS for a scenario

The stock price of a stock is now $70. The trader is speculating that the stock price can go to $120, but then there will be pull back to $50. It can happen in the next one year. Is it a good ...
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1answer
49 views

Why is this option's price so out of line?

This option's price seems completely insane: TCF Jan 17 2020 22.5 Call (TCF200117C00022500) Why is this option's price so far out?
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2answers
4k views

How to salvage money from a call option that has lost value?

I bought a 12/06/19 $202.50 call option on Alibaba for $2.45. The call is currently trading for about 25 cents and I have lost almost all my money because BABA has dropped to about $194. Is there a ...
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1answer
49 views

What is the Profit for a scenario on the day before expiration?

I have 1 contract of a CALL OPTION of a XYZ stock. The strike price is $155. The purchase price is $15. The Expiration is Jan 3 2020. The current price of the stock is $161. I paid $1515 for owning ...
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1answer
197 views

Finding the Profit/Loss for different scenarios for a call option of a XYZ stock

I have 1 contract of a CALL OPTION of a XYZ stock. The strike price is $155. The purchase price is $15. The Expiration is Jan 3 2020. The current price of the stock is $161. I paid $1515 for owning ...
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1answer
80 views

How to reduce margin requirement when shorting calls?

When I naked-call (short) cash-settlement options, like VIX, the margin requirement is very high. I tried some spread strategies to protect (e.g., buy same-expiration call at a higher strike), but ...
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2answers
57 views

Premium to price ratio - Seemingly simple option research not so much

I would like to identify call options with weekly expiration dates that pay the most premiums relative to the underlying stock price. For example: As of 11/12/2019, TSLA has a price of ~350 per ...
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1answer
63 views

How do I know what option on a particular stock X will move the most?

Say for instance I have a view that MSFT in the coming 3 months is going to come out with a big upgrade to their full year guidance. Let's assume in the event that this happens the stock goes up a lot ...
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2answers
111 views

How implied volatility affect options pricing?

TSLA between 23 and 24 October 2019 had their earnings report. TSLA mark price on 23 October was 252$. On 24 October, half an hour after market open reached 297$. as we saw around 44$ push. if ...
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2answers
445 views

Can you buy an option and immediately exercise it? Options delays questions

Assuming American Options Can you buy a stock option and immediately exercise it - or are you only formally given control of the option at the end of the trading day? Would you be able to sell it ...
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2answers
206 views

Can a broker buy shares to cover naked calls without notifying me?

I sold some in-the-money naked calls, and found out the next day that the broker bought the underlying shares to cover the calls. They claimed that the underlying is hard-to-borrow and since the ...
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1answer
71 views

What is the effect of a short stock position on the value of an option?

I'm reading the book "Option Volatility and Pricing" by Natenberg and there is a paragraph I'm having trouble understanding. Chapter 7 (Risk Measurement 1), Page 98, Paragraph 2: The value of a ...
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1answer
307 views

How does this “cont callable,” “make whole calls” bond work?

I was looking at this bond on TD Ameritrade: This is a callable bond, so I'm wondering how that works, exactly. TD Ameritrade says that this bond is "cont callable," which I assume is an ...
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2answers
1k views

Selling options below bid on Robinhood

If you sell an option for cheaper than what is someone willing to pay, does Robinhood sell it for the best price or for the price you chose to sell it? I'm trying to figure out if I can do stop loss ...
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1answer
7k views

Robinhood doesn't allow you to exercise call options in the app?

On the Robinhood website, https://support.robinhood.com/hc/en-us/articles/360001331403, the following is written about exercising stock options: Can I exercise my call before expiration? Yes. ...
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1answer
861 views

Options basics: How to realize profit from a long call position

I'm studying the basics of options trading and just read a 'crash course' book where the author states the following: ...you won't walk away from a call option with cash in hand. The profit we ...
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4answers
284 views

Trying to get my head around how options work

A stock X is trading at $215. I bought a put at a strike price $195 for $2.55 premium(paid $255) expiring June 7. Today the stock is down by $15 to $200. However, the price of my put is reduced from $...
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1answer
49 views

Currency option case

I am a bit lost with understanding the naming used for holding positions in the currency options and their payoffs. If I want to buy the European option with an amount of x USD (EUR put/ USD call), ...
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3answers
229 views

How to buy a contract for S&P 500 index?

I am researching writing covered calls on S&P500 index. So in order to sell covered call I need to buy a contract for S&P500 index. I've never traded indexes. What exactly I will be buying (...
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2answers
278 views

Delta of a Vertical Spread | Slower than delta of long option?

People often prefer to trade options spreads rather than buying options, since those reduce your cost and have a defined profit and loss but what is the probability of success of a spread? For example ...
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2answers
194 views

Option trading for dummies

If I buy a $200 call option for $22 ($0.22) that expires in 3 weeks, with a current share price of $140, can I sell the option two weeks from now if the share price has reached $180? I'm asking ...
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3answers
212 views

The math of this Investopedia article

I'm a little confused on how this article comes up with $650 instead of $700. From Investopedia. Consider the following example: XYZ is currently trading at $99.00 You own one XYZ Oct 90 ...
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3answers
220 views

Why would anyone ever buy these call options?

I'm starting to learn the ins-and-outs of options. For the time being, I'm only interested in selling call options of index funds. Browsing through the available options in Robinhood for the ETF IVV (...
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4answers
339 views

What fundamental value do Options give the economy?

I had been wondering lately what the economic value that financial Options (Calls, Puts, American, Bermudan, etc) give to the economy is. In essence, what good do they give us, vs. simply trading the ...
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1answer
510 views

Difference between deltas of American vs European Call options

Is there a difference in the value of Delta of American and European options with the same underlying asset price, strike price, time to maturity? Also, is there any way to determine the price of an ...
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3answers
200 views

Starting with options trading

I am a regular trader with stocks but I am a complete beginner with options. I am referring to a few online resources like here and here However, I have a few questions. Say I call a stock at $50 ...
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3answers
480 views

Why not sell a call option with strike price below stock price?

Learning a bit about options. Can anyone explain to me why this is a bad idea or wouldn't work? Assuming example stock XYX with current price of $5.10, with calls selling for $.50 at a strike price ...