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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376 views

“In-the-Money” vs “Out-of-the-Money” Call Options

This is a homework question, but can explain to me how to determine "in-the-money" vs "out-of-the-money" call options based on the table below? The image above is a newspaper style quote. The first 3 ...
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1answer
41 views

USO Dec'22 Options cost 20 times less than options in 30 days or so

I am confused. I have long term USO (600+ days) options and currently they are trading 20 times lower than the same options that expiring 20 days from now. Should't the long term one have time value + ...
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0answers
38 views

Can companies raise cash by selling covered call options on their treasury stock?

Suppose a company has lots of treasury shares. Can it raise cash by selling call options covered by the treasury stock? If the stock price ends below the strike price of the calls sold, then the ...
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2answers
62 views

Is there intuition behind asymmetry in call and put prices?

There is a certain asymmetry in (European) call/put prices, even with negligible interest and dividend rates. For example, assume current price $100, interest rate 0.01%, dividend 0, volatility 25%, ...
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2answers
52 views

In Options call does the strike price matter if the intent is to buy the stock?

Lets say, I want to buy a call option whose underlying stock has long term potential but there are some near term risks. I want to wait and see how the stock performs for a few months and buy if it is ...
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2answers
42 views

Writing ITM Call Option For Extra Profit

Say I buy 100 shares of XYZ at $20 a piece, and it rises in price to $25 a share. Is there any downside to writing/selling an ITM call option at a strike price of $25/share as far as I can in the ...
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4answers
37 views

Call Option: Is in-the-money term same for Seller vs Buyer?

I am confused about the term in-the-money when I am acting as Seller. For a CALL option: When the current market price of stock is greater than strike price, it's a considered as In-The-Money for a ...
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0answers
37 views

What happens to my Long Put (Bought Puts) when company file chapter 11

What happens to my long put that i buy for Dec 2020 if the company files for chapter 11 in Nov 2020 or before option expiration. Would I be able to sell those long puts to get maximum reward for ...
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1answer
68 views

Can a broker make it appear they have executed a 'buy to close' trade but in actual fact they simply have taken your position?

If you wrote a call option, and the underlying spiked up creating a margin call - which was not filled, can your broker make it appear that they executed a 'buy to cover' to close your position but in ...
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1answer
1k views

Deep in the money Covered Calls with high premiums

Take a look at following option chain, it's for some company in Indian markets, I intend to do a covered call on the stock but I would want a little extra downside protection at the cost of little ...
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2answers
98 views

Who is on the buy-side of a sell-to-close call options trade?

While I think I understand the mechanics of opening a call position, I am confused about the mechanics of closing a call option prior to expiry. I am party A. Buy-to-open: Party A (buy-side) is ...
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2answers
38 views

Why's an “Adjusted Option 10 Shares per contract” offered for just Jan 15 2021?

A contract covers 100 shares of the underlying stock, but this is my first time chancing on an Adjusted Option. We clicked "Click here for help", but Questrade's link is broken and no useful ...
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1answer
26 views

Can options exercised after market closes on Friday pull dividends

Assume a stock has an ex-dividend date that falls on a Monday. A covered call is sold Friday just before close. If the call is in the money would the option owner be able to exercise the call in ...
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1answer
312 views

Choosing a strike price when you sell a short combo

Often different stocks that I want to short are not on my broker's "easy-to-borrow" list, so they are unavailable for shorting. A couple weeks ago I got serious about option trading and I found out ...
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2answers
58 views

New to Options trading

I'm fairly new to trading options. I have been trading stocks just as a side source of income and I've been exploring trading options. Would you guys be able to recommend any strategies I could begin ...
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3answers
95 views

Options Trading: How to lock in unrealized gains?

I've been learning about options trading, but the one thing I haven't explicitly read anywhere is how you actually lock in (i.e. cash out/collect earnings) from options trading. Take the following ...
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2answers
36 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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2answers
130 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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2answers
127 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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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
65 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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10answers
43k views

Options for dummies. Can you explain how puts & calls work, simply?

I never understood Puts or Calls. Could anybody explain it like I were a child?
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3answers
252 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
65 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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1answer
136 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
377 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
64 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
87 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
74 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
21 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
40 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
106 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
166 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
77 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
107 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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5answers
2k views

Why naked call writing is risky compare to Covered call?

I know that with a covered call you own the underlying and sell a call and with a naked call you don't own the underlying. Either way, if the underlying finishes in-the-money, you are assigned and ...
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1answer
224 views

fair price of call option in this problem

The price of an asset can move to only two values – USD 102 and USD 98 – over the next month. The probability of a price rise is 99%, while the probability of a fall is 1%. The annual simple risk-free ...
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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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7answers
11k views

Exercising an option without paying for the underlying

As a follow up to my other question, I would like to know whether the following is possible: I have $20,000 in my brokerage account The price of the $300 call is $5.00 (1 contract = 100 shares) I buy ...
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3answers
246 views

When a near term outlook on an asset is negative, is it possible to make money using both put and call options?

This question is about Put options. These contracts give the buyer the right to sell some underlying asset at some agreed strike price at or before (American style contract) the expiration date. Call ...
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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
49 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
354 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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4answers
623 views

What to think of two at the money call options with different strike prices and premiums?

Suppose a stock is trading for $50. Further, suppose there is some call option A, which has a strike price of $40 and a premium of $10. Furthermore, suppose there is another call option B, which has a ...
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2answers
160 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
106 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
88 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
58 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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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 ...