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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16 views

How will the probability change with new restriction(Red Zone)

No restriction If I sold an OTM put option(-16 delta) the probability of touching the short put strike is 32%(i.e 2*16). The risk profile is represented by the picture above. Red Zone-Restriction How ...
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1answer
55 views

What’s the formula to estimate stock price (in a week or month from now) using implied volatility?

Let’s say a stock trades at $45 today and has IV of 92%. I wanna get a rough range of where the stock might be in a week from now, let’s say $32 to $58 in a week, based on the IV 92%. How do I get ...
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61 views

Sold to close options and Robinhood charged $0.04, but why and how?

This morning I BTO'd 5 call options for $30 and an hour later STC'd for $70, a $40 profit. Robinhood took $0.04 on that STC order, but I can't reason about how or why? Their fee schedule says that its ...
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2answers
161 views

Why does the DJIA take a dip on the 19th of every month since May?

The Dow Jones Industrial Average has a brief downward spike on the 19th of every month since May 2021, except where the 19th falls on a weekend - so, May 19, June 18, July 19, August 19, September 20. ...
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1answer
25 views

How does expiration/assignment work in synthetic covered call

What happens if I let a short call expire worthless on a synthetic long stock I've purchased. Here's my scenario. Bought a CALL @ 870 and sold a PUT @ 870 both expiring in 177 days. Also sold a CALL @ ...
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1answer
28 views

Sell Stop-Limit triggered on bid or ask?

If an option has a spread of BID $1 and ASK $1.50 and a sell stop-limit is placed with a STOP $1.20 and a LIMIT $1.15, is the stop triggered by the bid or the ask? That is, this order will not try to ...
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24 views

Difference between trading ETFs and the corresponding futures? GLD or /GC? UNG or /NG?

I am taking a hard look at options trading and I am starting with a modest account of $10,000 (I mention this because I think it might be relevant to the question). What is the difference between ...
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1answer
33 views

Covered call buy-to-close using sale of underlying?

If I write a covered call, my account will be long the underlying and short a call. Say I withdraw the premium from my brokerage account and spend it, invest it elsewhere, etc. If I want to later sell ...
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2answers
75 views

Stop limit orders are being filled immediately

Got an option trading up at $0.40, spread is $0.34B x $0.45A, so I went to set a stop limit on the order at $0.35, but the broker popped up a message that said: "Your stop price is at or above ...
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1answer
27 views

How to manage covered call position when stock price goes down

So let's say you have a position like this bought 100 shares of XYZ at $50 sold 1 covered call at $55 strike, received a premium of $2 stock price goes down to $35 now premiums for strike prices ...
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1answer
62 views

What are the advantages of warrants over options?

Is there any advantages of trading warrants over options?
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1answer
84 views

Today Stock Price is 15. Find value of Call Option

Stock price is $15 today. In a year, it has 50%-50% chances of going up or down. If it goes up, then 80% probability of the price being $25. If it goes down, then there is a 40% probability of price ...
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1answer
20 views

What does adding/removing stocks from optionable to non optionable and weekly to only regular, depend on?

Does a company require that its stock offer options as well as optionable/weekly or not optionable/regular? Or is it the OCC that controls this (depending on option trading volume?). How often does ...
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1answer
32 views

How much spread between bid and ask in options when the extrinsic = 0?

At expiration, an option's extrinsic value should be zero so why is there a difference between bid (which has negative value as in the example below) and the ask (which has still value over its ...
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1answer
58 views

Choose between a Bull Call Spread and a Bull Put Spread?

I am looking into trading options with an eye towards something that I would eventually do as a business. For the purposes of this question, let's assume I am working with a modest portfolio, like $...
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1answer
34 views

When I buy a option spread with different calendar dates, should I close every leg manualy?

When I buy a option spread with different calendar dates (september, 10-17-24, october, 1), should I close every leg manualy or they will be closed automatically even if they expired ITM ?
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4answers
58 views

Selling Covered Calls p/l

I recently entered the options trading market to start generating a passive income on stocks I intend to keep for the foreseeable future. I entered a position on a pharma play with 100 stocks @ $2.70 ...
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1answer
52 views

Enrolling in securities lending program vs. converting position to a synthetic long stock

Some stock brokerages provide opportunities for their clients to earn some money by allowing the brokerage to lend out the client's shares to short sellers. Common names for these programs are: "...
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2answers
60 views

After an option skyrockets in price and IV, when will IV decay and drop?

Consider LEAPS on stocks on BNTX, GME, MRNA, TSLA or ETFs like XSD, SOXX. They've all rocketed in price, and their IV too. Once their IV drops, I'm thinking of buying them. I've been following some of ...
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2answers
115 views

Stock Trading Question - Covered Calls

My understanding of covered calls is that if I sell call options for a stock that I own and the price of the stock rises, I would have to sell my shares. What stops me from putting a limit buy order ...
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3answers
60 views

Option Pricing Range

In case of zero transaction fee, the option should have a fixed price determined from c + K - S0 = 0 where c = Call option price K = Strike price, and S0 = Current market price If this is not ...
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1answer
76 views

Can option buyers exercise their options after the market has closed on weekdays?

Although the question is in the title, I'm trading AMC options on NYSE, and I'm the seller of a vertical spread. Can I get assigned after the market has closed on weekdays like today? I've heard ...
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1answer
37 views

Pricing of options on a non-total return market index

I'm looking at ITM call options for the ESTX50 price(not total return) index. I notice that they gradually become cheaper for the same strike price, the further the expiration date is. The prices per ...
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1answer
38 views

Short options trade ITM assignment criteria

Can someone please explain something about the option spreads? How come this broker is not exercising these short options in this video as they are deep in the money? https://www.youtube.com/watch?v=...
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28 views

Should you buy call options if there is a high chance the company may merge/be bought out? [duplicate]

I heard that as long as the option hits the strike price before the buyout agreement is finalized then you're ok, but if the option doesn't hit the strike price before then the value of the option is ...
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2answers
88 views

Writing call options, when do I receive premium?

I own 100 shares of a stock and I would like to get into writing covered calls. I'm just curious: If I write a contract, do I immediately receive payment for it from my broker? Or do I have to wait ...
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33 views

An Option order conditional to ticker price

On thinkorswim, preferably within ActiveTrader somewhere, is there a method for placing a Call/Put Market Buy that is triggered by the ticker's stock price reaching a specified value? (As opposed to ...
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60 views

Unintended information asymmetry in the stock market caused by options market makers

I just went over a publication "Hedging by Options Market Makers: Theory and Evidence" by Sahn-Wook Huh, Hao Lin and Antonio S.Mello One of the ideas they touch on, is that Options Market ...
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1answer
63 views

List of all option contracts [closed]

I am looking for a downloadable list of all option contracts for US equities, as opposed to resorting to scraping. A list of commodity options would be a bonus. I am looking for an official source ...
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2answers
62 views

May I get more than the strike price difference when roll up an ITM call option?

I have an in-the-money call option that expires shortly and I see further upward potential of the underlying stock, so I decide to roll over to a longer expiration date. Now, if I choose to roll up to ...
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1answer
64 views

Do option spreads affect the holding period of the underlying stock?

Say I have 100 shares of ABC that are currently short-term. If I sell an ABC put credit spread and close either or both legs within 30 days, would it reset the holding period on the 100 shares of ...
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4answers
57 views

Put option premium decreasing when underlying is also decreasing

Had some spare cash, decided to buy a weekly put for a 7/16 expiry with a $15 strike, $0.55 premium that had an IV of ~500% and I purchased 5 contracts, for a total of $275. The underlying has fallen ...
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1answer
97 views

What happened if I don't buy back the profitable put option I sold two weeks ago?

Let's say I sold a TSLA put for 2$. If the underlying price moves up, I can buy it back when reaching 50% percent and collect 100$. What happened if the price moves up and I don't buy it back, do I ...
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2answers
48 views

Is Margin Interest Rate of a Brokerage Relevant?

I've seen brokerages intensely advertise their margin interest rate, and I've seen this being use to compare them. Why is this important, when you can get a low interest rate loan using in the ...
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2answers
37 views

What will be the impact of time decay on Options Premium?

Let's say you have bought a July Nifty CE or PE in June at Rs. 250 premium. Can you explain how its premium will change over time if nifty increases/decreases towards your strike price? Basically I ...
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3answers
68 views

How does strike price and assignments work

At the beginning of the week, a stock is $45. A one week $50 call is purchased. On Wednesday the stock fluctuates between $44 and $55, closing at $49. What price info is used to calculate if an ...
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27 views

Is there charges for unfilled option

I failed to get filled on an option trade and was canceled. Will I be charge a fee still or only when an order is filled? Thanks.
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2answers
40 views

Option chain with nil bid quantity and price

Let's assume I bought a call option ABC CE @.50 and now its value is @.10. There is no bid price or bid quantity. Am I able to sell the option at @.10 anyway?
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2answers
77 views

If I short an option and the buyer exercises the contract, what will happen?

Let's say that I'm on TDAmeritrade. I short a call option to collect a premium. I also own 100 shares of the same stock in the same account. In a week, the option is in-the-money and the buyer ...
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2answers
118 views

Significance of the word iron in option strategies

Why is the word iron used in some of the option strategies, like iron butterfly or iron condor ?
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4answers
128 views

After you sell a put option that you initially bought from an option writer, are you still responsible for buying the shares if it's exercised?

I'm a little confused on how options trading works, namely what you are selling when you sell an option. Let's say you buy a put option for 100 shares at a strike price of $100 for a company XYZ that ...
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1answer
119 views

Who are the non-speculative buyers of futures options?

I am trying to understand who would be a non-speculative buyer of options contracts on futures. There are a plenty of descriptions of how options work online, but mostly they omit this crucial part of ...
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2answers
67 views

Where to find a list of US stocks with monthly expiration options only? [closed]

Does anybody know where to find a list of US stocks with monthly expiration options only (no weeklies plz) ?
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1answer
62 views

Are gains/losses on selling 12 months+ puts short- or long-term capital gains/losses?

If I sell a put and only close the transaction after 12+ months of holding that position, is it a long- or short-term capital gain/loss? Some more context: For part of my portfolio, I sell some long-...
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1answer
52 views

Can you explain to me, in what months are the futures and options on gold and silver listed, based on the CME description?

I read the following contract specifications from CME and couldn't figure out/understand it. On Gold; Futures: Monthly contracts listed for 3 consecutive months, any Feb, Apr, Aug, Oct in the nearest ...
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2answers
75 views

Managing Long Straddle

Am a beginner in option trading. Recently started learning option strategies. The long straddle looked particularly appealing. However to make a profit the underlying needs to move, lets say around 2%....
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2answers
51 views

Protective put became ITM before expiration. How to prevent option exercise?

Options beginner here. I have a protective put on a stock and it became ITM 2 days before expiration. I do not want the option to be exercised, since I’m bullish on the stock, and want to continue ...
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66 views

How do "Crabs" make money exactly? [duplicate]

So again i'm used to Crypto Currencies, and since im stupid i learn most things from threads from /biz/ (fortunately i still take decisions based on myself), i've seen plenty on lingo like a bull ...
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1answer
77 views

I bought an option it has a volume of 3 it expires two weeks from the purchase date it jumped 650% and drops then rises even higher

I bought 5 options contracts. It goes from being worth $125 then shoots up to over $1,000 then decreases in value when I try to sell. I tried to sell three times while it had a 552% increase, but it ...
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3answers
111 views

How to buy 100 shares when exercising call option

I recently got into options, and I'm a bit confused on how to exercise my contracts. I have an in the money contract. I understant that if I sell to close, I sell the contract at its current price, ...

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