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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1answer
95 views

Iron condor - can the described scenario happen?

Options beginner here. Cannot wrap my head around this. Say I’m trading a long iron condor and the call spread ends up in the money on expiration. Now I can exercise the long call. So should I wait ...
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1answer
23 views

How to calculate break even price of Bull Put Spread and Bear Call Spread

I need some help confirming if I am calculating the break even price correctly for both Bear Call Spread and Bull Put Spread. For Bear Call Spread, I have: breakEvenPrice = longLegStrike+(longLegCost-...
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112 views

Can I buy an option that have zero price?

If the option price in market is zero, Can I buy it ?
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1answer
73 views

LEAPS instead of ETFS

I would like to get 1.5x Leverage of SPY. I want to use options. What is the best way to achieve it LEAPS?
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2answers
73 views

Why does an option have the term “weekly”?

I am new to option trading. I created a paper account in TD Ameritrade, and I noted some options are termed with "Weekly". Eg "May 15, 2021 (13 days) Weekly 100" "May 22, 2021 ...
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2answers
73 views

if I sell to open a contract and the buyer buys to close a contract, will I get notification?

I'm reading/watching the basics of options trading. I opened a demo account but until now, when I open an option contract, I have only gotten one of these three notifications\messages: working, ...
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2answers
59 views

Sell to Open PUT - Assignment of shares before long expiration

I would like to sell 5 contracts (Sell to Open - Cash reserved PUT) for stock C3AI with expiration of Jan 23 for a strike price of 60 (Stock trading at $69 at this moment). That gives me $9800 premium....
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2answers
72 views

Can option writers “buy to close” if holders refuse to sell?

I am new to option trading. How do we know an option is ITM on the expiration date when the underlying asset price could fluctuate throughout the day? If we short a call/put, understand that we &...
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1answer
31 views

Wash sale clarification on options trading

If I buy deep in-the-money put options, and sell not so deep in-the-money (higher strike priced) put options and if both expire worthless, will I not be allowed to deduct the loss incurred from the ...
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1answer
27 views

What is the delivery time of the underlying stock on an option and what is the process?

I am new to option trading. I would like to know: For US options, what is the time frame for the underlying stock to be delivered once the call/put is exercised? If sell a call and I am unable to ...
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30 views

Where Option Credit gets added

I have a question, when you sell options (call or puts) you get credit upfront, but my question is where you can see these credit amounts? In "Stocks & Options" or in "Brokerage ...
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1answer
36 views

is mark to market accounting has to be FIFO?

I am thinking to file for the mark to market trading account but I do not like FIFO. Is FIFO part of mark to market accounting?
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1answer
57 views

Thoughts on this wash sale scenario

I traded options and believe had several wash sales. Does it matter if they're puts or calls or sell to close or expired? Is it possible they're not wash sales as wash sales are not indicated on my ...
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3answers
61 views

Do options contracts give you cash or the underlying?

Whenever I read about options valuation, it's phrased in terms of payoff diagrams. For European options, the value at expiry is the difference between the strike and the market price of the underlying ...
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1answer
50 views

Old option chain symbols

I am going through my investment history, but there are a lot of option trades that don't make sense. For example, in 2009, "OZC Jan 22 2011 25.0 Put" was the $25 put for QQQ expiring in ...
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2answers
39 views

Call Option pricing when OTM

In this example, XLX of the binomial option pricing I am pricing American call options using the binomial method. I was wondering if in the first period (0.1), the price of the stock after a downside ...
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0answers
37 views

Price of a Call Option as you Increase the time periods

I'm pricing call options at the moment and seeing how call option prices change depending solely on the periods of volatility. In one case the stock changes every month, the other it changes every ...
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1answer
80 views

Taxes: Selling covered calls at a loss

Let's say I own 100 shares of X with a holding period of >1 year and I have 1 covered call option written against those shares. On the day of expiry, it's looking like the stock is up much higher ...
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3answers
111 views

Put option - exercise when it expires but don't have enough money to buy stocks to sell

Ok, so here is my plan. I wanted to buy put options which will sell Tesla stock at Strike price 900 Euro in June, 2021. The price for an option is 2.3 Euro and I will buy 1000 options (total cost to ...
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3answers
95 views

Can puts work as stop losses?

As far as I see it, the main problem with placing stops, is that the price may rebound in the direction that you originally wanted. You might be out of the trade and have no chance of recovery. Puts ...
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1answer
34 views

How and when are CALL/PUT options executed if you're the seller?

Let's say there's a stock trading at $100 and you sell a PUT for $80 that expires the coming Friday. The stock drops to $75 by Tuesday. When are you actually forced to buy the stock? Does the option ...
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1answer
79 views

Do call options expiring ITM increase the stock price?

When call options expire ITM, the shares either need to be transferred (from an existing owner) or bought at the market price. I'm wondering whether this affects the stock price post-expiration? The ...
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2answers
255 views

Can a buy order be skipped when price rises rapidly?

I would like to know, if it is possible or likely, that an "out the money" share buy order would be skipped, when a stock prise rises very rapidly. Context: I have 466 shares of tesla. I ...
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1answer
71 views

If I buy to close a call position and the option writer defaults, am I liable for the original position?

Let's say that I sell covered calls and they are purchased by Alice. Later, I buy these calls (which were written by Bob) to close my position. Let's say that Bob's short calls were naked. Suppose ...
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94 views

Why broker charge me for BORROW fees when I have a long unsettled position as well to counter the short in the same account [duplicate]

The only reason why I put it here is to find out whether I am a victim or just ignorant of the way brokers deal with option positions that were exercised. Whether I am a victim or just ignorant will ...
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2answers
158 views

What should I do if my cash secured short put is deep in the money?

Due to the recent market situation, many tech stocks are losing their value real quick. I sold a put last month with strike price $80, and it is going to expire by the end of this month (3 more weeks ...
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0answers
106 views

Order rejected: Today's expiring option series on this symbol are Closing Only

Rejected Buy to Open 1 Order rejected: Today's expiring option series on this symbol are Closing Only. TDA gives me this response when I try to buy 1 call option OTM The volume and open ...
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2answers
76 views

What would happen if the number of active options is higher than the number of floating share?

I am learning the concept of Gamma Squeeze from The Motley Fool. Under the "Why options trading can create stock volatility" section, it is mentioned that for options trading: chances are ...
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7answers
3k views

Better terms to use to understand Puts and Calls for options trading

I've been trying to learn a little about options trading, specially puts and calls. The term options works well for my brain because someone is buying or selling the option to buy or sell something. ...
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2answers
145 views

Can selling naked calls create counterfeit shares?

I understand that illegal naked shorting can lead to FTDs since same share can be loaned out and shorted multiple times. This can lead to a situation where >100% of a stock's float is shorted (Ref: ...
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2answers
101 views

When it comes to options, is there a “house” like with a sports bet bookie?

While learning about options trading, the following question came up. I'm hoping someone here can help answer it. Please excuse any (likely) imperfect terminology and understanding. Are call and put ...
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2answers
192 views

Very high strike price for call option (GME)

I noticed that there are many call contracts on GME at a strike of $800 that expire in 5 days. Currently the price of GME is at $110. I'm just wondering why anyone would go for such a high strike ? ...
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17 views

Understanding options by example

mostly I trade crypto, so wanted to dig into btc option trading, can u help? I've read some general stuff about options I want to trade it here on binance: https://voptions.binance.com/en but got a ...
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2answers
298 views

How OPTIONS are settled can be an eye opener and I hope I can get some answers

The only reason why I put it here is to find out whether I am a victim or just ignorant of the way brokers deal with option positions that were exercised. Whether I am a victim or just ignorant ...
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1answer
124 views

As a put option buyer, do I potentially suffer a loss higher than the premium if I forgot to close the option when it is in the money

Many sources only mention that if the option expires worthless, I will lose the premium as the maximum loss. But in reality, I can also lose money higher than the max loss even if my put option is in ...
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0answers
51 views

Non-US citizen/resident trying to begin trading options and futures

I'm from Brazil and I already trade shares, options and futures here for ~5 years in the Brazilian stock market. I began trading shares in the US stock market a few months ago using the Passfolio ...
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1answer
92 views

Option trading volume inconsistencies

May I ask for your opinion on option trading volume numbers? A recent example might be DNN (Denison), a call option,expiration Mar 19, strike $2.50 Yahoo says in the option chart that the volumes were ...
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2answers
127 views

Options trading: buy/sell to open/close terminology

I want to buy put options as I believe the price of the underlying asset is going down. In the linked video here at around 1:10 there is a bit saying that for short positions, you 'sell to open' to ...
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1answer
101 views

Withdraw a covered call premium right away

Let's say that I have $50k in my brokerage account. My broker will let me buy double my account's value on margin. I can buy 100 shares of TSLA at $820 per share and then sell a one year covered call ...
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1answer
77 views

Selling a cash secured in-the-money put

I sold a cash secured put for XYZ stock. It is Aug 20, 2021 expiry for $34 Strike Price. The stock was trading at $31.60 when I sold the PUT. I have received $1K premium for selling that option. If ...
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1answer
35 views

Price lands between Spread Strike on Expiration

Imagine this setup: Sell put strike $10 Buy put strike $9 At expiration, the price is at 9.5 which should cause you to be assigned but your bought put won't execute. However, if you're doing this on ...
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1answer
78 views

Why are Short Put option strategy losses said to be unlimited when they are limited by fact that stocks don't fall below zero?

This is really more a question about terminology. In many articles describing synthetic long stock options strategy, losses (on the Short Put leg of the trade) are noted as being "unlimited"....
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2answers
47 views

Covered calls - can anyone confirm if my understanding is correct?

I hope that it's appropriate to ask this kind of question here and I'm not sure how to formulate it. I have a specific (real) example that I'd like to outline to see if I understand this correctly. ...
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2answers
65 views

Why do you not exercise call option, but exercise put?

I can understand the common explanation why you don't exercise american call option on non-dividend paying stock. You can sell the option instead of exercising because price is always greater than ...
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2answers
2k views

Who provides the shares for exercising a put option?

I am trying to get into investing and have some questions about options. If I buy a put option (which would be an option to sell stocks as far as I understood), who will provide the stocks to sell if ...
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1answer
48 views

Buying To Cover And Protecting Profits from Short Sell

I sold covered call options, and I would like to buy to cover when the market opens on Monday. For this particular instrument, trading volume is a bit thin, and I would like to "hide" my ...
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2answers
38 views

when do you decide if to execute an option?

I own a call option that expires on Friday. When do I decide whether to execute the option? The Saturday after?
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3answers
95 views

Does exercising an option move the price?

This is a follow up question to this one. Summary: There are deep in-the-money puts at strikes of $800 being traded for an instrument whose price is much below that (in the ballpark of $225 at the ...
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1answer
172 views

Why doesn't this options investing strategy work?

I am trying to understand a certain investing strategy involving options. In the example I'm looking at, it seems one can obtain a stock for less than its market price, so there must be something I am ...
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1answer
275 views

Wheel strategy (cash covered puts and covered calls) for an annual income

I'm curious if there's anyone selling cash covered puts and covered calls for income. If so, what is your monthly gross return in percent and how long have you been doing it? I'm considering selling ...

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