Questions tagged [option-strategies]
The option-strategies tag has no usage guidance.
11
questions
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
8answers
11k views
Why would someone want to sell call options?
I'm having trouble understanding why someone would want to sell call options. For example, if the writer of a call option owned the shares and they expected the share price to fall, why wouldn't they ...
2
votes
2answers
427 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
3answers
1k 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 ...
13
votes
1answer
32k 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 ...
5
votes
4answers
3k views
Why this strategy with options and zero risk is not possible?
I'm learning options and I've seen strategies with graphs like these:
Why is not possible to combine a Butterfly with Straddle to get something like this (green is final result):
I'm very new ...
5
votes
1answer
2k views
Can closing a covered call and opening a new covered call trigger a wash sale?
In Jan 2019, I bought 200 QQQ (ETF) at about $160 and also wrote two covered calls for June 2019 at 170 (higher than the last day price) netting a small premium. Now QQQ is at about 185 so it will be ...
3
votes
1answer
82 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 ...
1
vote
1answer
57 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 = $...
1
vote
1answer
7k views
Difference between naked put, covered put, protective put
If I buy a long put without holding the underlying, does it amount to a naked put? If I hold the underlying and buy a put, is that a covered put? Also if I hold the underlying and sell a put, is that ...
0
votes
3answers
2k views
Dividend arbitrage using in the money puts
I was looking at dividend arbitrage
It seems all I need to do is find stocks with a nice dividend(e.g KO). Then find an in the money put where the time premium is less than the dividend to be paid. ...
