Questions tagged [option-strategies]
The option-strategies tag has no usage guidance.
144
questions
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2answers
111 views
Options trading: buy/sell to open/close terminology
I want to buy put options as I believe the price of the underlying asset is going down. In the linked video here at around 1:10 there is a bit saying that for short positions, you 'sell to open' to ...
3
votes
1answer
72 views
For an individual brokerage account user, what is the cheapest way to take a short position in a stock?
As far as I know, if I want to sell short, say, $100 worth of stock I need to post $150 in cash collateral and pay some fees each day. Another way is to buy a put option. In that case, I need to pay ...
-2
votes
0answers
30 views
Option greeks and over the counter options
A)A call option struck at-the-money typically has a delta of ______ and relatively ______ gamma.
1)0.5...high
2)0.75...high
3)0.5...low
4)0...high
B)Trader A purchased a 1-year over-the-counter put ...
13
votes
1answer
31k views
Closing Shorted Positions via Short Ladder Attacks
From my understanding in a short ladder attack investors bid lower and lower prices to drive down the stock value. I assume in many cases this will scare retail investors into selling further ...
1
vote
1answer
65 views
Why roll a credit spread out and keep the same strike price?
I’m confused: Why would you ever buy the same strike price when rolling out a bull put spread if the price has moved against you?
If the price ever falls below the price you sold the put for, you can ...
1
vote
3answers
122 views
Trading with options and turn in profits
Yesterday I read an article about how someone was able to turn $ 200 into $ 113,000 in just one day by buying call options on a particular stock. The article also showed a screenshot which appears to ...
2
votes
1answer
31 views
Should the change in price of a synthetic (long call + short put) ever be different from the change in price of the underlying?
On my paper brokerage account, I can see that this appears to not hold true ...
Daily P&L Financial Instrument Position Last Market Value Prior Close Change (Last - Prior Close)
310 ...
0
votes
2answers
54 views
Transfer money out of IRA using stock options?
Is there a stock option strategy that allows one to transfer money out of an IRA brokerage account into a non-IRA brokerage account without incurring penalty?
1
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2answers
45 views
What are the risks involved in buying a synthetic long (long call short put) and letting it expire compared to buying the underlying?
As an EU resident, I am not allowed to purchase US-based ETFs. However, I am allowed to trade in options on such ETFs and exercise them.
One way of obtaining the stocks I would want to purchase is by ...
1
vote
1answer
32 views
Implied Volatility, % Change in the Option Chain
The following is the Options Chain of CRM (Salesforce) for March 19, 2021.
A few questions from the chart:
What does the % Change mean in this chart?
What does the Volume mean?
At the $300 strike, I ...
0
votes
2answers
51 views
How are put and call options reported wrt taxes?
My broker tells me that option transactions are reported for tax purposes as two independent transactions. That is, the net profit or loss is not reported. Instead, the receipts from the sale of the ...
3
votes
1answer
70 views
Is short term capital loss worth more than long term capital loss?
Let's say someone has already realized a lot in short term and long term capital gains for a given year.
And the same person has also unrealized short term capital loss that will turn into unrealized ...
2
votes
3answers
345 views
What's to stop me from selling Iron Condors one day before expiration?
AAPL is currently trading at ~115. I can construct the following Iron Condor that expires tomorrow. It has close to a 1:1 R/R ratio:
BUY APPL 121 CALL
SELL AAPL 120 CALL
SELL AAPL 110 PUT
BUY AAPL ...
0
votes
1answer
51 views
What Strategy are these option writers following?
This is the option chain from NIFTY Index about a month from expiry.
Apart from speculation what strategy could these option writers be following by writing in the money calls at 10000 or puts at ...
2
votes
2answers
99 views
Is it important to understand option pricing models before trading options?
Options seem to be one of the most complex financial instruments generally available to retail investors. The common advice given to beginners (at least on this site) is that beginners "must ...
0
votes
1answer
70 views
Options strategy that profits from outperformance (or underperformance) relative to a stock index
If I expect a stock to go down, I could buy put options. Conversely, if I expect a stock to go up, I could buy call options.
If I expect a stock to underperform the market (but not necessarily go down)...
25
votes
2answers
5k views
How do I bet that a stock price will not move?
If I believe a stock will go up, I buy the stock. If I believe a stock will go down, I short the stock. If I believe a stock will neither go up nor down, what do I do? How do I profit from a non-...
6
votes
3answers
1k views
How do I replicate a shorted stock and protective call option using options only?
Suppose a stock is currently at $100. I construct the following portfolio:
Short-sell 100 shares at $100
Long a call option — strike price: $105 (protective call)
The protective call option serves ...
3
votes
1answer
172 views
Prices increases leading to call debit spread loss
I recently entered a debit call spread on Apple and I noticed the price of the sold option appreciated at a faster rate than the bought option resulting in a loss even though the stock moved in my ...
1
vote
2answers
87 views
Does increasing value of a still-out-of-the-money option that you wrote (covered) pose a risk to you?
I am a US citizen living in the US. I want to write covered call options to receive premiums. If implied volatility increases and/or the price of the underlying rises, an out-of-the-money call can ...
2
votes
2answers
1k views
Put option lost value when stock price dropped?
I had purchased 3 puts of MNOV yesterday with a strike price of 7.50 when the stock was worth around $11 and it raised as high as $13+
The stock price had dropped as low as $7.15 and is currently ...
1
vote
1answer
38 views
Call Debit Spread Pricing
I bought an AAPL debit spread today with expiration on 8/7. Here the details:
Exp. 8/7
Sold AAPL $365 Call for $32.85
Bought AAPL $360 Call for $36.40
Max Profit = [(365 - 360) * 100] - 400 = $...
0
votes
0answers
43 views
In what ratio should I buy options to preserve the diversification effect of the underlying stock portfolio?
I want to invest in a certain stock portfolio using long down-and-out barrier options. But I am not sure in what ratio to buy the barrier options to retain the same exposure to the volatility of the ...
1
vote
1answer
93 views
Confusing loss on closing options spread
Today I closed a spread on $TSLA, specifically a 3x bull call expiring Aug 7th, 2020. The spread was composed of 2 legs as :
Buy 1330 call
Sell 1360 call
My P&L on the trade before closing looked ...
0
votes
1answer
90 views
What to do with a call I sold
I own 300 shares of NCLH, I sold a call last Monday with strike price of $16 when the stock was at $15.8 for a premium of $115 (for the 3 calls). The Call expires tomorrow and I don't know what I have ...
0
votes
2answers
47 views
Does option “automatic exercise” take commission into consideration?
Automatic exercise is a procedure implemented to protect an option holder where the Option Clearing Corporation (OCC) will automatically exercise an "in the money" option for the holder, ...
2
votes
1answer
430 views
How long does it take to exercise an option?
If I have a call option and exercise it today will I be able to receive the shares immediately to sell them?
0
votes
0answers
68 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 ...
0
votes
1answer
43 views
If after buying puts, you're uncertain if the price will drop in time, should you straddle by buying call options?
My grandparents surmised that SPY would drop to 200 because of COVID-19, and bought on Mar 1 2020 2 (they've sold the rest) SPY Put Options at $230 strike expiring on:
May 15 2020.
June 19 2020.
Now ...
0
votes
1answer
191 views
negative delta for bull put spread
I am working on bull put spread. Currently the spot is way below both the strike prices. So one strike is deep in the money and other is in the money. Net position delta retrieved from Bloomberg for ...
0
votes
2answers
171 views
Is Robinhood good enough for successfully day-trading relatively large positions ($20k~30k)
After I deposited all my money in robinhood to start day trading options, I was told that robinhood execution speed might not be good enough for successful day trading. My plan was to profit off the ...
1
vote
2answers
178 views
How could I calculate the probability of getting wiped out?
Last year I ran a mildly stupid/naive options strategy.
It involved picking 10-15 random companies, and then setting up put credit spreads on each one, expiring 1-2 weeks out. I prioritized high ...
0
votes
1answer
356 views
Interactive Brokers Performance Profile P&L Graph
I'm trying to decipher the following view from a trade I've made on IB. I think I'm missing something important with respect to how trading this option works.
Trade P&L.
I understand that the ...
1
vote
1answer
58 views
How to think about correlation between multiple outstanding options trades
I'm just getting into trading options. I think it would be sensible to ensure that my multiple outstanding trades at any given time are not correlated so that if I lose on one, I am not more likely to ...
2
votes
1answer
93 views
Hidden risks of “limited risk” option strategies
Some option strategies such as bear put spread are inherently "loss-limited", meaning that you know in advance your maximum loss.
As an example, if I buy 10 put options for $100 and sell 10 put ...
0
votes
1answer
160 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 ...
0
votes
1answer
30 views
Short put above strike price
Today I noticed put options on a number of stocks with an ask price greater than the strike price. One example was USAC Sept-2020 @ $2.50 with an ask price of $4.80 around 2PM EDT.
Is their any ...
0
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1answer
61 views
Bear call spread break even
So I opened my first position last week, a small min risk one to try and see what I don't understand, and it's took a while to improve but things look ok now: https://imgur.com/a/9NKDVVr
For ...
0
votes
1answer
87 views
When is the best time to apply Straddle stock option strategy?
I have read that option traders use the straddle option strategy before the earning call approaching for a company. How many days close to the earnings call, the traders will buy the options? Is it ...
0
votes
2answers
83 views
Closing out an in-the-money equity option spreadtrade
I put on a debit weekly diagonal ITM put spread trade on stock A selling at $45 : I Buy back week put strike 55 sell front week put strike 50. I am assigned overnight and have to purchase 100 shares ...
-2
votes
3answers
712 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 ...
0
votes
1answer
49 views
Bear call credit spread and overall position value
example
https://www.optionseducation.org/strategies/all-strategies/bear-call-spread-credit-call-spread
While both legs are open, wont you see the position as a whole decline as the stock declines ...
0
votes
3answers
973 views
How to compute IVx (Implied volatility for a specific expiration) and the expected move with options?
By searching online, I have found three methods to compute the expected move of a stock based on option prices and implied volatilities:
Method 1: Extract the price of a Straddle ATM of the front ...
2
votes
1answer
2k views
Buying and Selling options for the same stock multiple times in a day?
Is it normal that traders buy and sell options of the same stock on the same day multiple times? For example, in an event of a positive earnings release, the CALL options were bought and then sold it ...
0
votes
1answer
209 views
Option Spread Max Loss Think Or Swim
I used to trade options on think or swim, the trade analyzer used to default to showing you 'Max Loss' on a particular spread, and it does not show this anymore. Does anyone know how to reenable it, ...
0
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1answer
3k views
Selling deep-in-the-money puts
I bought 1000 shares of xyz stock for $2.70 ($2,700) and it started dropping value soon after to $2.50. I can sell deep-in-the-money puts ($7.00 strike) currently for $4.20 per option. Meaning I would ...
0
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1answer
57 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 ...
0
votes
1answer
249 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 ...
0
votes
2answers
114 views
Choosing an Option Expiration Date
Consider a company going to be profitable in an year and its stock price will go up. In an year it will make a small leap but not a whole a lot. Is it a good strategy to buy its options right now that ...
0
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4answers
483 views
Option implied volatility and 95% losing trades?
I trade options. Whenever I buy puts or calls, I end up breaking even or losing, sometimes losing a HUGE amount of money even though price has gone my direction and time decay (theta) has been ...
