Questions tagged [options]

This tag is to be used for any question on Options, A more specific tag [put-options, call-options, options-assignment, option-exercise] should be used when appropriate.

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67 views

Why are stock options named as they are?

Why are ISO stock options termed "statutory"? Because they are defined by some sort of statute? If so, then what is the statute? Similarly, why are ISOs termed "incentive" stock options whereas NQOs ...
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90 views

How much can option market makers influence stock prices?

Do option market makers also hold stock for the options they write? Suppose it's a: $10 billion company $20 stock 23 strike calls @ 30 cents Buy 5000 calls 10 days until expiration I think this ...
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40 views

notional value of a call option

I have some call options that are in the money and I'm trying to work out the calculation the platform uses to calculate absolute exposure. Open = 3.55 Close = 5.35 contracts = 8 They arrive at ...
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30 views

how to calculate profit of call option

I am trying to calculate the point at which exercising a call option would be profitable. I am looking at a call option for AAPL. The strike price is $320 and expires March 18th 2020. The price for ...
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1answer
30 views

What is the possibility of an ITM covered call not being assigned?

I wrote 70, 1/17/20 Apple covered calls at $240. Apple went to $310. It is 1/18 and the calls have expired but I still have my stock. Why?
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1answer
57 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 ...
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2answers
84 views

How does taking profits from a CALL option contract work?

From the question you can probably tell I have not traded options before. My question is essentially this scenario. Lets say I buy an CALL options contract for a certain stock, probably for 100 shares,...
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135 views

Why is this atm put twice as much as the call?

The stock is BYND. It's put has been costing twice as much as the call ... roughly 10.85 and 5.00 respectively at the moment. What could cause this. I should also point out that the stock is up 5 ...
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1answer
59 views

FX options for retail trader

I would like to trade options on the FX market, say EURUSD and GBPUSD. I have seen that there are options on the CME that have FX futures as underlying and also some options on spot on the ...
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34 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, ...
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2answers
154 views

Employer won't allow early exercise of options because “RSUs are uncommon and too complex” for venture-backed startups

I asked my employer (a Series A startup) if I could early exercise my stock options for the tax benefits described here. They replied that that would not be possible because the company did not issue ...
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66 views

SPDR S&P 500 ETF Trust (SPY) CALL and PUT options

Does the buying of CALL or PUT options of SPDR S&P 500 ETF Trust (SPY) work the same way as buying of CALL or PUT options of individual stock like FB or AAPL or MSFT? Can a trader sell the SPY ...
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17 views

Warrant extension - would this have any tax implications?

If someone has warrants to purchase shares in a private C corp in the US, if they were about to expire and they got the company to agree to extend them, does this have any tax implications? These are ...
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32 views

Put/Call ratio as a technical indicator?

So I was reading about the put/call ratio and how it can be used as a sentiment indicator. So a ratio of 0.7 or less is bullish. If it is between 0.7 and 1.0 it is neutral and if it is greater than 1....
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46 views

How to close an expired condor position in thinkorswim

I have ten condor positions in a stock that expired last Friday. The condor was profitable and am now trying to figure out how to close the position. I thought that this was something tos would do ...
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28 views

Strike Price for Momentum stocks

A trader speculate that a momentum stock can go higher 10% - 20% in the next three months based on the history of it's fluctuations. It can go down also 5% from the current price in the next few weeks ...
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2answers
28 views

How to find the limit price at a strike price for a future date?

In the chart, the current price of the underlying is 135. The last price of the option is 23.58. BID is 23.00 and the ASK is 23.90. I want to wait until the price of the underlying drops to 125 and ...
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1answer
76 views

If employees exercise options that they are given by the company, will that increase the number of outstanding shares?

Question is simple If employees exercise options that they are given by the company, will that increase the number of outstanding shares? If yes why and if no why.
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21 views

Long term LEAPs with calls written against them

I bought 3 LEAPs on XYZ at various times in 2019 which all expired in 14-17 months. I intend to sell or donate them once they reach long term status. However, I also wrote 3 CALL options on XYZ that ...
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1answer
82 views

When to sell option if the stock is not moving in the right direction?

Is there a rule of thumb on when to exit to use to close (sell) an option if the stock is not going in the right direction? For example, a call option contract is made on a stock which expires in a ...
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1answer
41 views

Understanding the visual representation of a Calendar Spread

The following plot and its context were taken from Hull`s Options, Futures and Other Derivative Securities (2002). I am slowly getting the basics of financial mathematics and came across this plot ...
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1answer
32 views

When does an option assignment actually get fulfilled?

I had 2 iron butterflies in RSX, expiring Jan 20th 2020. My short legs were at $25 strike, and the long legs were at $22 and $26. Over the weekend, I was notified that my short call ($25) was ...
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1answer
65 views

Why is the bid on my put credit spread zero when each leg has a positive bid?

I am trying to setup a put credit spread on robinhood and my bid keeps showing zero. I’m not sure how or why this happens. As I am new to trading options any help would be appreciated. the stock(bb)...
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49 views

Taxes For Expired Worthless Puts On Invested Positions

My question relates to the tax implications of purchased puts that expire worthless (no gain, but loss based on the purchase price). These puts exist to protect invested positions. Suppose I ...
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2answers
107 views

Buying put options on the day of expiry and the result

This article covers a trade of $270 Strike CALL expiring on December 6th. My questions are: Can you buy a put or a call on the day of expiration? What will be this trader's speculation? The US Jobs ...
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43 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 ...
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1answer
103 views

Selling PUT and CALL

The Option Chain of a stock is given below. The stock price now is $22.50. If I sell a $21 put, I'll receive a premium of 15 cents and I will be obligated to buy the stock at $21 if it is below $21 ...
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2answers
78 views

What do you mean by Option losing value?

I bought an XYZ $50 call for $5. Expiration is in two weeks. The day after I bought the option, there was news about a data breach and the stock's price dropped to $25. I know that the stock is not ...
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1answer
46 views

Why is this option's price so out of line?

This option's price seems completely insane: TCF Jan 17 2020 22.5 Call (TCF200117C00022500) Why is this option's price so far out?
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82 views

How to make profit when the stock price is in Out of Money?

I'm so confused by the article in Marketwatch where the author says a profit is made when the stock price is out of money. Per that article, I assume the trader bought options for a strike price of ...
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72 views

Does the wash sale rule apply when rolling options spreads?

If I short a spread and roll it over the next month at a profit, does the losing leg carry over to the new trade? Example: Short 1 January PUT $200 Strike +$100 Long 1 January PUT $150 Strike -$30 ...
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1answer
48 views

What is the strategy to gain profit from an option which has less volatility?

The following is the chart of Delta Airlines. The stock moved between the price of $52 and $62 for the last 6 months or so. Looking at this chart, someone who bought a PUT or CALL at the strike price $...
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1answer
78 views

Just selling options and collecting premium

Suppose I sell an OTM put one strike away and collect that premium. Once assigned, I would sell a call at that same strike to collect that premium. For example: AAPL is trading at $261.74 1) Sell 1 ...
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1answer
50 views

Does option follow the market or investment made in it?

I have started doing option trading and as per my knowledge so far price of option rise or fall depends upon the delta (I am considering only delta for this example for brevity). For my question I ...
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34 views

What value should be used for a TrailingStop $ for a PUT Option in eTrade trading platform?

I have a PUT contract for a XYZ stock with a strike price of $160. I'm speculating that the stock price of XYZ can go down in the next few weeks. I would like to set up a TrailingStop order for a $ ...
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1answer
48 views

What is the Profit for a scenario on the day before expiration?

I have 1 contract of a CALL OPTION of a XYZ stock. The strike price is $155. The purchase price is $15. The Expiration is Jan 3 2020. The current price of the stock is $161. I paid $1515 for owning ...
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83 views

Buying a PUT OPTION in the Out Of The Money

The scenario is this. The price of a XYZ stock is $150. I speculate that the stock price can go to $200 and then retreat to $160 in six months. Is it possible to buy a PUT OPTION at strike price $199 ...
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180 views

Finding the Profit/Loss for different scenarios for a call option of a XYZ stock

I have 1 contract of a CALL OPTION of a XYZ stock. The strike price is $155. The purchase price is $15. The Expiration is Jan 3 2020. The current price of the stock is $161. I paid $1515 for owning ...
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2answers
83 views

Protection against put-options writers bankruptcy

It's possible to hedge portfolio against the crisis by buying put-options. One thing that worrying me - what if insurers will be bankrupt when you need them the most. This crisis insurance (put-...
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62 views

When I write an option, do I have to pay interest on it? And can I invest the proceeds?

I have two closely related questions about what happens when I write a naked option. My understanding of short-selling a stock is that as long as the short position is open, my brokerage will (or ...
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1answer
69 views

How to reduce margin requirement when shorting calls?

When I naked-call (short) cash-settlement options, like VIX, the margin requirement is very high. I tried some spread strategies to protect (e.g., buy same-expiration call at a higher strike), but ...
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2answers
87 views

What are the payoffs for a seller of call options?

Suppose IBM stock is trading at $100 per share and a trader purchases one IBM $100 call option for $2.00 per contract. Scenario 1 IBM is $105 at expiration. The buyer's profit would be $300 (...
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21 views

How to find the most efficient gamma and vega hedging

I want an options position where I can short some options to pocket the premiums and benefit from the time decay. I also want to be vega and gamma neutral. Is there an established way to find which ...
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1answer
32 views

Historical Data For Options? [closed]

Is there a site where I can get historical options data? Where I can see what the price of a particular option was several days ago?
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4answers
111 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 ...
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1answer
58 views

How do I know what option on a particular stock X will move the most?

Say for instance I have a view that MSFT in the coming 3 months is going to come out with a big upgrade to their full year guidance. Let's assume in the event that this happens the stock goes up a lot ...
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1answer
60 views

Which option greeks explain the majority of an option's price move?

I have recently picked up a few derivatives books for leisurely reading and have started to look into the option greeks. There are many e.g. delta, vega, theta, and gamma. There are others which are ...
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3answers
188 views

As a trader, why would you trade forex or options/futures instead of stocks?

My apology for the novice question: I've seen a certain number of people trading forex, future or options as their full time career, and my understanding is that they have all been through stock ...
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76 views

How Implied Volatility affect Options Pricing

TSLA between 23 and 24 October 2019 had their earnings report. TSLA mark price on 23 October was 252$. On 24 October, half an hour after market open reached 297$. as we saw around 44$ push. if ...
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308 views

Can you buy an option and immediately exercise it? Options delays questions

Assuming American Options Can you buy a stock option and immediately exercise it - or are you only formally given control of the option at the end of the trading day? Would you be able to sell it ...