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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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Implied volatility vs implied pdf

Good morning. I'm trying to download the implied volatility for at-the-money options on Eurodollar future 3 month. Is there some way to find it? Can it be calculated from the probability distribution ...
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2answers
107 views

Why did my options limit order fill so quickly?

A stock I hold went down heavily today. I found a November call option for pretty cheap, though it had a relatively large bid and ask spread. It also had low (or zero, I don't remember) open ...
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1answer
53 views

How come none of the VIX ETFs track the index exactly? [duplicate]

For example the VXX ETF (https://finance.yahoo.com/quote/VXX) does not track the index exactly (https://finance.yahoo.com/quote/%5EVIX/)
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1answer
36 views

Does option delta predict expiration probability?

I've read that delta is a probability of option assignment. For example, if you have a put with a delta of -.70, there is a 70% chance the option will be assigned. If the delta is -.04, there is only ...
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1answer
70 views

Options strategy to lock in profit

Let’s say I have 100 shares of XYZ, and over the past 9 months the share price has increased 20%. I don’t want to sell until the 12 month mark so I can benefit from a long term capital gains rate, but ...
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1answer
74 views

Is there a Greek that describe the sensitivity of an option's time value to strike?

Is there a Greek that describes the sensitivity of an option's time value to the strike price? Or is option time value independent of strike? It's obvious that strike doesn't change once an option is ...
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2answers
74 views

Does option demand influence option price?

Option prices are largely influenced by their intrinsic value: the underlying price, and the strike price. However, what effect do other factors have, including option demand? Is this ever reflected ...
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3answers
94 views

What are some strategies for profitable buying of naked options (call / put)?

I prefer naked options of the index and stocks for obvious reasons. I would like to know some strategies to remain profitable with it. Note: I choose first out the money (strike price) option ...
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2answers
286 views

Option Price changes as you get closer to earnings (but stock remains unchanged)

How do the price of options change as you get closer to earnings, if the stock doesn't change? Let's say, there's a call option that's worth $6.00 today for a strike price of $62.00 with the stock ...
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3answers
73 views

What hedging strategy can I use to approximate selling one half of an in-the-money option contract?

Apologies if the question title is confusing; I'll explain: I have one contract of an expensive call option which is in-the-money and expires next year. It has roughly tripled since I bought it, and ...
2
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1answer
42 views

What are the auctions redirecting some retail option orders that the WSJ is referring to and why is it disadvantageous to market makers?

In this article talking about market makers within the options market: Options on key indexes, exchange-traded funds and high-volume stocks dominate trading. Meanwhile, there is less activity in ...
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1answer
91 views

How was the media able to identify that certain VIX put and calls were made by the same entity?

From the article below, how can someone be certain all these trades were performed by the same entity? To fund it, the investor sold approximately 260,000 VIX puts expiring in January with a ...
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1answer
77 views

What stock(s) denote the unofficial start of “earnings season”?

I have heard AA (Alcoa Corporation) and JPM (JP Morgan Chase) mark the start of "earnings season" is there any other consensus?
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1answer
44 views

What types of derivatives, other than stock options, are available to the retail trader? [closed]

How can a retail trader identify other derivative instruments to trade, and how can one go about doing so?
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2answers
34 views

Why doesn't cumulative call open interest and cumulative put open interest inform future stock directionality?

For example, how come the ratio of total puts and calls doesn't accurately inform of the stock's future movement?
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1answer
39 views

Selling options on acquisition

I've been trying to understand this hypothetical scenario wherein a company in which you own options is acquired. In it, the author posits you own .67% and 20,000 shares ($2 strike price, $4 share ...
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2answers
114 views

What would happen if you suddenly entered a large buy to open position that exceeded the total combined existing open interest?

For example, suppose you are very bullish on a stock and you wanted to purchase the maximum amount of call options. Let's say the current total call open interest is 50,000 and you purchased 100,000 ...
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2answers
53 views

How open interest can be greater than the contracts traded for that day [closed]

Here is option chain data I am referring to. I was going through the option chain data. I noticed that the change in open interest was more than the volume that traded on that day. How is this ...
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1answer
17 views

Options Volatility and Settlement during a merger and acquisition

I'm trying to figure out how the vol of an option on a target change when the deal is a mix of cash stock. We know that in a cash deal, vol creeps to 0 as the deal collects approvals. Stock deal, vol ...
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3answers
62 views

Why don't options exchanges allow limit orders to include delta?

Since all options price models predict a delta (i.e., the theoretical ratio of option price change to underlying stock price change), I'm guessing most options investors and market makers are ...
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2answers
60 views

What happens to a PUT contract for a company that is sold above the strike price and before expiration?

I'm thinking of selling long dated put contracts for a company that I believe may be acquired before the expiration date. I'll use SNAP for my example. What would happen to in the following situation? ...
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1answer
64 views

Insuring against a drop in ETF using Put option

I am new to finance, markets and various financial securities. I just started with some Khan Academy Videos and Udemy courses. Our professor introduced the concept of using a Put Option to establish a ...
2
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3answers
117 views

Why would a long term option contract that's “in the money” trade at exactly the difference between strike and stock price?

A stock currently trades at $70.05 has the following option contract: 3/1/2019 $44 call The bid of this call is $26.05 which is the call's intrinsic value (the difference between $70.05 and $44.00)...
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2answers
125 views

Confusion about options: can one exercise at any time?

I am at the beginning of learning about options. I am reading a book on the subject. I am in a chapter about selling covered calls. The book says: Defensive covered call writers may prefer the ...
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2answers
53 views

Derivatives/Options: Underlying Asset

I am aware that the underlying of a derivative contract can be more or less "anything" : stocks, bonds, commodities, currencies, etc... However, I would like to know if it is normal that there are ...
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4answers
98 views

Stock options and cash settlement

Lets assume I buy one long call option on AAPL and as the expiry day gets closer the option is in the money. If I decide to exercise that option will there be a cash settlement or a delivery of the ...
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2answers
156 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
122 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
51 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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1answer
243 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
55 views

Options put seller [on hold]

I'm a novice option 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 what's happening here. ...
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2answers
75 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.
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4answers
7k 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?
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1answer
37 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
26 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
39 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 ...
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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
52 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 ...
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4answers
441 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?
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1answer
93 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?
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1answer
168 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 ...
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2answers
54 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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2answers
154 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
30 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
33 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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1answer
183 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 ...
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1answer
66 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: ...
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1answer
75 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 ...