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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2answers
62 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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0answers
124 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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1answer
73 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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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 ...
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73 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
151 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
403 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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183 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 ...