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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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2answers
70 views

Why hold calls until expiration?

I am reading a book on options basics. I am in a chapter on selling covered calls. The author says that buyers of calls almost always hold the calls until expiration. Why is this? Here's how I ...
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2answers
85 views

Options when go private

What happens to options when a company goes private. For example, if I have a call option on Tesla right now and it goes private at 420/share, what will happen to my options?
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2answers
41 views

higher premium for lower strike price on put

I'm new to options and I was on the robinhood options chain for selling VSAT puts with expiration data AUG 17 and noticed that the stock was trading at $63.79 with premiums $0.08 and $2.40 for ...
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0answers
32 views

Robinhood execution of options

Can you sell a call option using another call option as collateral instead of actually owning 100 shares? I am allowed to sell a TSLA option right now because i bought a TSLA call (not the actual ...
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1answer
58 views

Robinhood covered calls

If i buy 1 call option and then sell 1 call option. Is that classified as covered? I don't actually own the shares, i just own an option to buy them. Robinhood allows me to do this even though i dont ...
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0answers
30 views

Options put seller

I'm a novice options trader who is trying to better understand money flow. I saw a pretty large trade come into Micron today and was wondering if anyone can help me understand whats happening here. ...
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1answer
33 views

How can you calculate the POP (Probability of Profit in options strategy)

I'm making a spreadsheet to compare several option strategies. Is there a way I calculate the POP (probability of profit) or the Delta A rough estimation will do for me.
23
votes
4answers
6k views

My out-of-the-money call options are near expiration and won't sell in the open market. What are my choices?

I had attempted to sell my contracts off today but was unsuccessful. They are currently OTM options and will expire tomorrow. What can I do to minimize loss and why was I unable to sell?
2
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1answer
35 views

Is there a way to determine if a stock has weekly vs monthly options?

For stocks/etfs that are optionable, is there a way to determine if they offer weekly or only monthly options without having to look at the option chain? I believe all optionable stocks/etfs have ...
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1answer
22 views

Covered puts and covered calls

Why is it not possible to sell covered puts but we can sell covered calls? What happens if I short a stock and short a put?
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2answers
38 views

Bull call spread

My textbook says the following for a bull call spread. "In the bull call spread, you sell a call with a lower strike price and buy a a call with a higher strike price. The call spread is a credit ...
0
votes
1answer
39 views

Selling in the money option

If the market price of a stock is 30, can I sell a call option that is currently in the money such as a strike price of 29?
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2answers
48 views

Exercising an out of the money option

Let's say I sell a call option and before expiration date, it is out of the money. The buyer would not exercise it normally. I am just curious as to what would happen to my account if he does decide ...
6
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3answers
334 views

Buying puts before dividends get paid out

This question is a direct extension of this question, which asks if you short a stock before the dividend pays out are you guaranteed money since the price should go down? The answer states shorting a ...
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2answers
55 views

Options “put to you”

What does it mean when you have an option you bought "put to you" after the last trading day?
1
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1answer
57 views

Why doesn't the bid/ask reflect my ask price on a spread options position I am trying to get rid of?

I entered this trade in about a week ago. It's always been under the ask but the ask never reflects my ask. Why?
0
votes
1answer
163 views

Does Warren Buffett hate options?

I just read this: https://www.quora.com/Does-Warren-Buffett-buy-options It looks like he has a very negative opinion about (some/most) options arrangements. Am I missing the point? Are options ...
0
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1answer
29 views

Credentials to discern “Sell to Open” or “Buy to Open” Option Transaction

I am curious how to gain insight into whether an option transaction was buyer or seller initiated, ie. "Buy to Open" or "Sell to Open". What I am looking for is not from a common retail investor ...
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vote
2answers
148 views

Massive Deep Out of the Money Call Option Transaction

I am relatively new to options, however something has caught my eye. I see this case of a single leg deep out of money HES Aug 10 call option with a very large transaction of 4,373 contracts completed ...
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0answers
26 views

No margin account and put expires ITM

This question is a followup to a recent and similar question on buying a put: When a long PUT expires in-the-money, whose shares are being sold?. Suppose I don't have a margin account, and I buy a ...
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1answer
32 views

Are there different markets between option writing and buying?

Looking at the option chain I see short term (30 days) deep out of the money calls with volume for strike 55 with volume at 16, with Bid/Ask at 0.30/1.00: However, the time and sales window notes two ...
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votes
1answer
78 views

How to calculate Black-Scholes using Google Sheets?

I'd like to calculate Black-Scholes using Google Sheets based on this formula: https://www.erieri.com/blackscholes. Here are the parameters I'm using in the form: Stock price = 60.89 Option strike ...
1
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1answer
50 views

Indications of Buy or Sell to Open — Time and Sales Window

I am using Thinkorswim trading platform and came across something I do not understand. The options chain is as seen below with 10 open interest and volume of 315 at strike 55, (added: bid ask spread: ...
1
vote
1answer
56 views

When and why are new strikes added to an option chain?

I've seen that some option chains have very many strike choices, while some have very few. I presume when options first become available for a particular underlying security, strike choices will be ...
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2answers
107 views

What is option execution?

What is the meaning of "the execution of the Option" or "Option execution" in the examples below? Is it "signing"? The Completion, as well as the execution of the Option may be carried out if on ...
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2answers
109 views

How to minimize risk and loss when using call options?

I've never used options before, but I would like to give it a try. The first thing I want to do is understand as much about call options before moving on to the more difficult, in my opinion, put ...
3
votes
3answers
137 views

Options and exercise

Why do people exercise call options early? If the price of the stock rises above the exercise price, the profit from selling the option would be greater than the profit from exercising the option and ...
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4answers
64 views

Call vs Puts: a short position can profit using both depending on strike price?

I'm confused about whether you want to own a call or put if you believe a stock price will go down. Most articles have described owning Puts as betting the stock will go down, and calls as betting ...
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2answers
99 views

Help me understand these options prices

I learned about options in a financial mathmatics class a few years ago, and recently I thought I'd buy some for fun/to learn how it's done in real life. I don't like Intel (don't hate me) and it was ...
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3answers
64 views

Why does increased volatility always mean higher call prices?

I understand that apparently implied volatility of a call option increases as the underlying price of the stock deviates further and further from the moving average. That mostly makes sense, because ...
13
votes
3answers
3k views

Why do speculators short-sell a stock when they wish to go short, rather than purchase put options?

I'm still trying to figure out, why, if a speculator believes a security will go down in value they use the tradition route of short-selling, when it would seem that purchasing put options is the less ...
0
votes
1answer
72 views

Understanding on closing an option

I have read that there are three scenarios when it comes to closing an option: You can buy or sell to “close” the position prior to expiration. The options expire out-of-the-money and worthless, so ...
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1answer
38 views

Do options get repriced at the end of the day, or the beginning? [duplicate]

All else being held constant, an option loses value as its expiration date approaches. Say it's Friday morning and I have an option that expires 1 week from now, next Friday. Will that option lose ...
16
votes
4answers
4k views

A beginner question on call option

So I made my first options transaction. I believe that a stock that is currently trading around 25, will be in the 40s, come August - based on my research (I know the stock well, and I've invested in ...
2
votes
1answer
59 views

Selling Covered Calls, will online broker sell shares automatically?

Let's say I own a share of a company at $100, and I sell a call option for this company for $5 with a 6 month expiration, and a strike price of $110 (all arbitrary numbers). If the share price rises ...
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1answer
30 views

Can a short ITM option be closed for profit, given enough credit collected?

When we roll an option for credit, we improve our break-even price. Does that mean that we can eventually close an ITM position for a profit, if we roll enough times? For example, I sell a put in a $...
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2answers
87 views

How many options contracts is optimal for trading?

I've read that a lot size is 100 shares of stock and that if you trade in lots you have a better chance of getting a good price on your order. Is there a similar thing for options contracts? In other ...
11
votes
1answer
1k views

Do companies sell puts when buying back shares?

Say company X has a share price of $80. They think their shares are undervalued, and their board approved a buyback of $1 billion. Can company X use the $1 billion to sell puts at $79, with the idea ...
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1answer
31 views

Typical options commision price

Robinhood.com lets you trade options for free. (There is no commission when you buy/sell options). While learning about optiosn on cboe.com, most of the book (I don't have the link to the book.pdf ...
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0answers
47 views

Nadex Spread Pricing at Expiration

I've noticed that Nadex spreads incur their max loss at expiration even if the underlying price at expiration is the same as the underlying entry price. For example: A spread has a floor of $1 and a ...
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0answers
40 views

how do i find foreign markets brokers and scanners? [closed]

How or where do I find a list of brokerages that allow options trading in markets outside the us? For instance, Tokyo exchange, Shanghai exchange, etc.. I've been using thinkorswim and trading US ...
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1answer
47 views

Hedging a portfolio using Bull Call Spreads

I'm having some difficulty understanding how one would hedge a portfolio using bull call spreads as outlined in the following paragraph ( Today is also a good day to revisit my suggestion for a ...
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3answers
79 views

Call option buy/sell and put option buy/sell

When you have a call option- option to buy and a put option - Option to sell; why would we have a call/put option buyer and call/put option seller? I'm having trouble to understand why can't a call ...
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votes
1answer
44 views

Ratio Write and Income Taxes

Imagine that an investor owns 500 shares of the XYZ stock with a current value of 50 and a cost basis of 30. He then sells 5 call contracts with a strike of 65 for 2 dollars. Latter he buys back the ...
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3answers
61 views

Options: Trying to close a naked call position after the underlying drops in value

I'm having some difficulty understanding how this sort of a trade example would play out. Some input would be very much appreciated! Let's say $FB is trading at $184 today. I write OTM naked ...
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3answers
218 views

Hedging for inflation

I have liquidated my entire portfolio. I now have cash, earning low interest with tax. I want to build back my position, but am waiting for the right time in the market, likely higher interest rates. ...
0
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1answer
111 views

Can closing a position trigger the wash sale rule?

I'm wondering if there is any scenario where closing a position could trigger the wash sale rules. For example, would the wash sale rule apply to the transactions in the following scenario? In June ...
0
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0answers
27 views

Taxable Events on Futures and FOPs

What's considered a taxable event on futures and FOPs profit? Only upon withdrawal or is any profit taxable even if I leave it in my brokerage account? (USA)
12
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5answers
4k views

Can I buy an out-of-the-money call and then sell it before it reaches the strike price?

I'm new to options trading so if this question does not make sense or is stupidly easy please bear with me. I'll try to show my thought process through an example. XYZ is currently trading at $100. ...
3
votes
2answers
137 views

Inverted strangle

I am researching inverted strangles and feel like I’m missing something. Suppose I buy 100 shares of XYZ @ $50. I then sell one deep ITM call at $45 for $6, resulting in a $1 profit. At the same ...