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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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Selling put and call Loss Scenario Examples

I am building selling portfolio for option trading. I can find buying call and put scenario but no scenario for selling and losing side. For e.g. If buyer exercised put option, what happened on ...
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2answers
89 views

Is this True about Put option

I was reading on option trading put option. They have stated that Volume on put option is less then the call option. Is it true? If it is why ?
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2answers
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Difference between European and American options

Appreciate some help with a problem i am facing OK, so first I found a put and call option with same strike price and maturity for both American-style and European-style options. I selected the ones ...
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1answer
55 views

What happen in this selling call option scenario

I am beginner in trading. So scenario is: For e.g. until the expiry date i want the stock value to stay at $50 or less. But what happen if the stock price went high and then go down near expiry date?...
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1answer
79 views

Call Options and Put Options

If I have a call option, which I long, with a strike price say, AUD 1.5/$, in english, is that "the right to buy 1$ for 1.5AUD" or "the right to buy 1.5AUD for 1$"? Please help me :)
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2answers
230 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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1answer
183 views

Put-Call parity - what is the difference between the two representations?

I have seen these two terms for put-call parity: S + P = C +Ke^(-rT) S + P = C + K/(1+r)^T Which one is the correct formula? When to use each of them? What is the diffrence?
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3answers
111 views

When can we exercice an option?

Can we only exercice an option when it expire ? For exemple I have an Adobe option with a strike price of 87.50$ and expiring on 2016-01-15. Adobe stock have already raised above my strike price. ...
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2answers
622 views

How to correctly track a covered call write (sell to open) in double-entry accounting?

I recently started using gnucash for personal accounting, but I guess this question doesn't depend on the software. I sold a covered call, and I'm not sure how to keep track of that in the double-...
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2answers
1k views

Future price == strike price in the future contract?

Assume a future contract specifies that the holder of the contract will need to buy corn from XYZ farm at £100 per tonne, 1 tonne. So total deal value when realizing this contract is £100. We all ...
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3answers
3k views

Do stock option prices predicate the underlying stock's movement?

I am trying to understand if my thinking is correct or not. I am looking at a stock that is @ $10.00. When I look at the options on the stock $11, $12... calls are all down today and $11, $12... ...
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2answers
158 views

Total price of (AAPL option strike price + option cost) decreases with strike price. Why?

I'm looking at apple options and found this strange pricing in the options table. It seems like if you buy a lower strike price your total cost for buying the stock and options is much less. Why is ...
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1answer
3k views

What is the maximum number of options I can buy if the price is $0.01?

In options trading, the lowest price for one call option can be as low as $0.01, for example for one contract which expires in a year. My question is what is the maximum number of options I can buy ...
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2answers
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Can a Covered Call be called away before the expiration date?

Scenario: If I hold 100 shares of XYZ, I can sell 1 XYZ call. Let's say the current price of XYZ is $50. What if I sell a call with strike price $45? Does that mean the underlying owner can call away ...
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0answers
31 views

Why is this option trade considered over the counter

In this article the author says: Since June 24, crude prices halved while CVX has dropped only 20%. SPY has risen slightly less than 3% during that time period. What’s a good options ...
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1answer
59 views

Why the call option premium sometimes does not decrease the further out of money we go

Usually when you have an option change, the further OTM you go, the premium drops for the same expiry date. But if we look at the Mar 2015 Call and Put option chains for VIXY, it seems this is not ...
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1answer
3k views

Why out of money options show no bid price but a valid ask price

Looking at the option chain for SPY I see that a lot of the out of the money calls are showing Bid as N/A. What is the reason? Nobody wants to buy out of the money calls because expiration is ...
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2answers
1k views

How to sell a worthless option

I have a call option that will expire as worthless in January but I'd like to sell it now and realize the loss this year to lower this year's capital gains taxes. I would be happy to dump it at $0.00 ...
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1answer
258 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
249 views

What is the probabiltiy of being assigned if the call expires in the money

If I sell a call option and at expiry, the call is in the money, is it guaranteed that I will be assigned and will need to deliver the underlying? What is the probability of assignment/ My question ...
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3answers
2k views

Am I understanding buying options on stock correctly

I'm just wondering if I am understanding Stock options correctly. Basically if I am watching stock XYZ. It's currently at $10 per share which I believe is low and should raise to 20 within 1 month. ...
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3answers
428 views

Why does a long/purchased call option have a long position in the option itself?

I am teaching myself some finance through a book. And I get confused by call/put options having short/long position in the options themselves or the underlying assets. For example, I understand the ...
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1answer
41 views

Can a deeper ITM call be cheaper than a less deep ITM call for same expiry date

In this option chain for SPY Apr 25 calls the one with a strike of 170.50 has a lower price than the one with a strike of 171. But why is this? 170.50 call is deeper ITM than 171, so it should be ...
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1answer
261 views

What does an options premium really mean?

I am taking a derivatives class at college, and I am getting slightly confused about how to understand options premiums. I have a couple of questions, specifically on this slide presented in class: ...
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1answer
2k views

Options: Letting it expire or sell when profiting?

Do you let your options expire or would you sell it before you let it expire if you're profiting (meaning you're in the green - market is going towards the correct direction you anticipated). If you ...
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10answers
41k 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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1answer
159 views

Knockout certificate (Long) fell more than 6% even though the underlaying security rose 1.2%

I recently bought a knockout certificate for facebook. So far it has been doing great returning more then 200%. But recently it has been doing something really strange. On Friday Facebook rose 1.2% ...
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2answers
5k views

Can the purchaser of a stock call option cancel the contract?

Let's assume there's a company, XYZ, trading at $11/share today. I purchase a call option @ $15 for $0.05. Do I need to keep funds in my account to satisfy the contract? I know my counter party ...
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3answers
622 views

What is the best way to make a bet that a certain stock will go up in the medium term?

If I want to make a $1000 bet that, say, a share of AAPL will be $1000 in a year's time, what's the best way to do that? AAPL is over $600 today, so with my $1000 I can only afford to buy one share. ...
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1answer
109 views

How to buy options on a specific security?

I want to buy a few call options, in my 401(k), for a specific security. I'm aware of the risks inherent to option trading, and this will be a small part of my overall strategy. Here are my ...
5
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1answer
92 views

Is the writer of a call ever required to surrender dividends to the call option buyer?

I was talking with an options trader that said he never writes calls on stocks that have dividends, because of various reasons. One of the reasons being that, under certain conditions, the writer of ...
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2answers
4k views

What are the odds of being assigned for a long dated in-the-money call option?

If I sell a 2-year future dated call option that is slightly in the money (For example if Citi today is $5.13, I sell a call option for strike price $5.00 at Jan 2013 - today is Jan 2011), what are ...