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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24 views

How does offsetting options work? [duplicate]

Suppose I bought a call option and the stock rises above the strike price. That is, I now have an ITM call option. Also, I don't have enough money to exercise the option. So to make a profit off of ...
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1answer
32 views

What brokerages in Canada can request new option listings and strike prices? [closed]

I want discount brokerage, not Big Banks. Interactive Brokers and Questrade emailed me they aren't Trading Privilege Holders and can't fill out http://www.cboe.com/aboutcboe/contact-cboe?Topic=New+...
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1answer
42 views

When an option is exercised, does the transaction show up on a TradingView chart?

I’m trying to understand the stock market and chart data. When an option is exercised, does the transaction show up on a TradingView chart? Example: If Tesla is trading at $423 and someone exercises ...
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1answer
25 views

Explaining different risk/reward ratios of bull put spreads with same strikes but different expirations

I've been looking at call spreads and put spreads and observed some vastly different risk/reward ratios even when the same spread width is used. Can someone please explain these differences? All ...
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2answers
122 views

Free Money with Options?

Why do there exist In The Money options such that the premium is less than the difference between strike and stock price? I'm new to options and there must be something I'm missing because it seems to ...
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1answer
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Binomial option pricing model. Comparing prices

I want to ask a question that may be too obvious for some of you, but: I calculated the price of a call option (expires in 7 months) using binomial pricing model and it is significantly lower than was ...
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1answer
67 views

Options trading and arbitrage [closed]

Near market closing time on a given day, you lose access to stock prices, but some European call and put prices for a stock are available as follows: All six options have the same expiration date. ...
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1answer
78 views

Who actually “does” the options, and are there others?

Here's the popular AAPL stock: https://finance.yahoo.com/quote/AAPL What "is" "Apple stock" ? Well, it is a legal instrument created by Nasdaq. Apple "trades on" Nasdaq, ...
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1answer
29 views

Tax treatment of put option calendar spread when each legs is closed in different tax years?

Let's assume that in October 2020 I have opened put option calendar spread position. I close one leg of this position in December 2020 at loss and then I close the other leg in January 2020 at profit. ...
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2answers
63 views

option price difference after stock price rebound [closed]

I see an interesting phenomenon and I don't know how to explain it. I bought a long call option for 60000 USD dollars with the expiration date about 90 days later. At the time I bought this option, ...
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0answers
31 views

Where can we see Futures Volume?

Does anyone know where I can see Futures volumes? None of the boards show it.
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1answer
46 views

Are market makers obligated to keep the option markets liquid?

I know that each stock has at least one market maker that is responsible for keeping the equity market flowing, but what about the options market? Are the respective market makers also bound by ...
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0answers
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What's wrong with this call credit spread? [migrated]

The picture below is a P&L chart for a call credit spread that exhibits the pattern I've seen in every single introduction to credit spreads I have looked at. Namely, above the long leg's (green) ...
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1answer
51 views

How does an option's premium depend on its strike price?

(NB: In this question's title, and elsewhere throughout this post, I have used the word "options" as a stand-in for both "call options" and "put options", for the sake of ...
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1answer
34 views

How am I notified a buyer if my option was exercised by the buyer on TWS? How much delay is there from when exercised to when I'm notified?

If I sell a call option out of the money that goes in the money before expiration, and if the buyer chooses to exercise the option before expiration, is there an immediate or delayed notification in ...
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1answer
56 views

Selling options

When selling an option after you bought it (not writing one) how easily are orders filled for large quantities of contracts ($25,000+) Do these sell orders usually get filled easily or not at all?
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1answer
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price difference in Stop limit order for option trading

I am new to the stop limit order. I want to set a stop limit order so that when my the premium of my long call option drops to a certain level, the system will automatically sell it. For example, the ...
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1answer
47 views

American Options Trading- Brokerage Entered Do Not Exercise Instead of Selling My Contracts Before Expiration

I made a stupid mistake trading options. It happened about a month ago, so I don't recall my thought process at the time. Anyway, I purchased multiple PUT contracts: NKLA SEPTEMBER 18 2020 $35 On ...
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1answer
30 views

Selling short call against a long call (a LEAP) when the long call is already in profits. Is it Constructive Sale?

Let's take these hypothetical trades On 08/01/2020: Bought AAPL Jan-2022 100C at $30 (Long call) On 08/30/2020: Sold AAPL Jan-2022 110C at $50 (Short Call). By this date, 08/30/2020, before my short ...
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1answer
50 views

What is the last possible time to exercise an equity option traded on CBOE?

I own 100 shares of AAPL an I am short the Oct 9 2020 $117.50 call. As per this CBOE link, the long holder may exercise that contract at any time before the contract expires, up to and including the ...
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1answer
45 views

Would a call option with one strike price be worth more than a call option with two different strike prices?

For example, say there is a call option with a strike price of $50 for a stock. Now, say there is another call option for the same stock with a strike price of $50 if the stock price is below $60, but ...
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2answers
82 views

Is it important to understand option pricing models before trading options?

Options seem to be one of the most complex financial instruments generally available to retail investors. The common advice given to beginners (at least on this site) is that beginners "must ...
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1answer
59 views

When to pay taxes on sold stocks or options?

I am a newbie to stock and options trading. I trade on Robinhood (I guess the tax system should be same regardless the platform). It would be great to have answers on these questions. Thanks in ...
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2answers
694 views

What happens to option contracts during a private buyout?

Lets say I have 100 $15 call contracts for NYSE: GPS (Gap Inc) that expires sometime next year. Hypothetically, if the company were to announce a leveraged private buyout of the remaining shares at $...
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2answers
73 views

Why are there no fractional options?

Some options can be expensive because they have 100 shares as underlying. Given that fractional shares exist, why are there no fractional options to help reduce the cost? Is it because of illiquidity ...
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1answer
36 views

Trying to get out of a Call Option but the order is stuck in the working phase

I recently bought a call on a stock that didn't have much volume and is considered illiquid. I'm trying to sell that call so I can get out of the trade but the order is stuck in the working stage and ...
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2answers
95 views

How to get fiat liquidity on BTC assets

I am bullish on BTC and at the same time I need some fiat liquidity right now. Is there some combination of financial products I can use? As an example: I have 10 BTC (assume current FX $10,000) I ...
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2answers
29 views

different strike prices in Straddle

to construct a perfect straddle, do I have to set the strike price to the current stock price? If the strike price is higher than the current stock price, what will happen? Thanks
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0answers
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Does OTC Markets offer options

I am just curious whether OTC Markets offer options. For example, I just searched OTCMKTS: SIUIF, Semiconductor Manufacturing Int'l. It seems that this stock does not have options to trade. Is this a ...
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1answer
31 views

Option premium and delta value provided by trading platform

how does the trading platform, like Interactive Broker, determine the option price and the delta value? Is the option price determined by models, like Black Scholes/binomial? Or is it determined by ...
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4answers
57 views

straddle option to profit in the wild market

I have another question. I learnt that I can construct a straddle in a wild market. If the stock rises significantly or falls significantly, I can earn a profit. I constructed a straddle in my paper ...
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2answers
46 views

compare delta value in the long call option for profit gain

I have a question about delta and its relation with the long call option. If I plan to buy a long call option to bet the stock price will go up. Is larger delta value better or smaller delta value ...
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1answer
33 views

compare theta value in the long call option

I read a lot about theta and I get confused. If I plan to buy a long call option to bet the stock price will go up. Is larger theta value better or smaller theta value better in terms of profit gain? ...
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1answer
33 views

determine option delta for a call and a put combination

how do I determine the delta of an option? Could I determine the delta by looking at the option chain? Also, is the delta of an option changing from time to time? Moreover, after I know the delta, ...
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1answer
44 views

stock price vs. option price vs. profit gain

I know if the stock is cheaper and its call option is also cheap. However, is it better to buy an option of a cheap stock than buy an option of an expensive stock? Assume both stocks do not pay ...
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2answers
117 views

Is there a scenario with unlimited risk while buying puts (esp. when they expire)?

My apologies if this is too simple a question, but there's a (possible) misconception that I wanted to clear. I did search for resources on the web and I think I have understood about 90% of the ...
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1answer
60 views

Robinhood sell option not executing

I bought a few CCL calls and I am looking to sell. I placed a "limit sell" at consistently 10-20% under market price (there are large fluctuations), but it is not executing (1 day has passed)...
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1answer
55 views

How do the VIX options work behind the scenes?

I cannot wrap my head around how do the VIX options work. For example SPY, simple and easy, there is a basket of stocks, and when you buy one share of SPY you own a little piece of every of 500 blue ...
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1answer
42 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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3answers
3k views

Why are options more popular than futures among retail investors?

I am puzzled as to why options seem to be more popular than futures among retail investors. Brokerage firms seem to emphasize their options offerings more than their futures offerings. On Robinhood, ...
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1answer
82 views

How to explain the difference between call and put price

How do I explain the difference between call and put price at strike price 125? I assume the call and put price will be very close, right? Thanks
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1answer
56 views

Maximum Profit (Options Vs Futures)

Consider this scenario: Say the S&P 500 closed at 3400 today (Sep-9) and you knew (100%) for a fact that by the end of trading day tomorrow (Sep-10) 4pm it will close at 3200. So now, given this ...
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1answer
42 views

Options - large block purchases

One thing doesn't add up in Options in my mind - just trying to see if someone can explain it. Say someone has placed a huge, large Buy to open for a Call option. By Huge I mean extremely large so ...
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2answers
104 views

How do derivative prices react so quickly to changes in underlying prices?

Just trying to understand something with the market pricing and how it works. There are literally thousands, if not millions of derivatives tied to say an index fund (which in turn are composed of a ...
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1answer
47 views

Index Options + Options calculator [closed]

I noticed that even though SPX and SPY track the S&P Index (I realize latter is an ETF and 10x lower), the options prices for a particular chain that I observed today are not exact. They're ...
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2answers
70 views

When exactly (time) is the 'automatic exercising' of an option triggered?

I understand that - for many brokers - an option that runs out is automatically exercised when it is 'in the money' on the end of its last day. My question is at what exact time is the decision made? (...
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1answer
197 views

How can I gamble in a “lottery” by using financial instruments?

I noticed that some financial instruments have lottery-like payoffs. If that is really the case, I am planning to play the "lottery" using financial instruments instead of the lotteries ...
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1answer
46 views

confused about option expiration date

Many websites said option expires on the third Friday of the month, only once per month. However, this is NOT true for the data I saw for Tesla, from Yahoo finance. From https://finance.yahoo.com/...
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2answers
72 views

Options Help - Partial allocation of shares?

I'm still learning options trading and got into it recently on Robinhood - but I have a few quick questions. I have 2 contracts for ACB $12.5 Put 9/4. When I go through the steps to exercise it, I ...
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1answer
63 views

Why is it harder to fill at the mid-point with my new broker?

My old broker (USAA) sold my accounts to Schwab. When I used USAA, I would buy options at around the mid-point, usually. The order would be filled quickly. Now that I am using Schwab, I mostly ...

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