Questions tagged [option-strategies]

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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 ...
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123 views

Using options to profit from underlying stock and warrants

I'm a suffering shareholder and have underlying stock and warrants (3 years remaining) and want to know how to profit from them using a option or hedge strategy. The current stock price is 30% below ...
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2answers
46 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 ...
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1answer
51 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)...
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42 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 ...
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66 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
60 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 ...
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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 ...
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1answer
114 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
335 views

Expected stock price move using IV

From this post https://www.projectoption.com/expected-move-explained/, he uses the following formula to calculate a 1 SD move in the stock: How do you know which stock option to use for this? For ...
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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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177 views

How to consider the effect of margin call risk in a gamma scalping strategy

I am trying to tippy toe into volatility trading and volatility strategies. So I was reading Sheldon Natenberg where he starts off with a portfolio of long ATM call and short 50 shares of stock to ...