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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
23 views

Historical Data For Options? [on hold]

Is there a site where I can get historical options data? Where I can see what the price of a particular option was several days ago?
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4answers
87 views

Option implied volatility and 95% losing trades?

I trade options. Whenever I buy puts or calls, I end up breaking even or losing, sometimes losing a HUGE amount of money even though price has gone my direction and time decay (theta) has been ...
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1answer
57 views

How do I know what option on a particular stock X will move the most?

Say for instance I have a view that MSFT in the coming 3 months is going to come out with a big upgrade to their full year guidance. Let's assume in the event that this happens the stock goes up a lot ...
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1answer
52 views

Which option greeks explain the majority of an option's price move?

I have recently picked up a few derivatives books for leisurely reading and have started to look into the option greeks. There are many e.g. delta, vega, theta, and gamma. There are others which are ...
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1answer
115 views

As a trader, why would you trade forex or options/futures instead of stocks?

My apology for the novice question: I've seen a certain number of people trading forex, future or options as their full time career, and my understanding is that they have all been through stock ...
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2answers
2k views

Do options always expire on third Friday of every month

The Yahoo finance link for SPY options Indicate that these options expire at close of October 31st. This is confusing because I thought options expire on the third Friday of every month. Oct 31st is ...
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2answers
57 views

How Implied Volatility affect Options Pricing

TSLA between 23 and 24 October 2019 had their earnings report. TSLA mark price on 23 October was 252$. On 24 October, half an hour after market open reached 297$. as we saw around 44$ push. if ...
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2answers
287 views

Can you buy an option and immediately exercise it? Options delays questions

Assuming American Options Can you buy a stock option and immediately exercise it - or are you only formally given control of the option at the end of the trading day? Would you be able to sell it ...
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3answers
2k views

Option spreads in registered accounts [closed]

Are there any option brokers for canadian people that allow you to do credit and debit spreads in their rrsp and Tfsa accounts?
2
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1answer
88 views

When does stock options start expiring on Monday and Wednesday?

I recall that traditional options expire on the 3rd Friday of the month and that weekly options expire every Friday. I was looking at Yahoo Finance and I saw some options that expire on Oct 28, ...
4
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1answer
41 views

When should a covered call option be bought back to avoid assignment

I am trying to learn options. I sold a covered call (weekly option) that will expire on October 25th and I want to avoid being assigned. Should I buy it back on 24th (one day early) or can it be ...
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1answer
60 views

Are options on popular ETF considered section 1256 contracts?

I want to learn about 1256 contracts and am wondering if options on common ETFs (like QQQ, SPY, DIA) (not futures) are considered section 1256, because these ETF tracks broad market but does not ...
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1answer
52 views

What is the effect of a short stock position on the value of an option?

I'm reading the book "Option Volatility and Pricing" by Natenberg and there is a paragraph I'm having trouble understanding. Chapter 7 (Risk Measurement 1), Page 98, Paragraph 2: The value of a ...
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1answer
136 views

Expected stock price move using IV

From this post https://www.projectoption.com/expected-move-explained/, he uses the following formula to calculate a 1 SD move in the stock: How do you know which stock option to use for this? For ...
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1answer
112 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
84 views

Understanding the notion of future options

I am currently studying different types of option-related derivatives and I am quite confused about the notion of “futures options”. My textbook says that A futures option is the right, but not ...
5
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1answer
133 views

Do options have CUSIP numbers?

If so, then where to find them?
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9answers
512 views

Are stock options worth as much as shares?

I was undergoing salary increase negotiations (after a year) recently and it was decided a percentage of my salary was to be paid in shares. However, when the offer came, I noticed I would be getting ...
2
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1answer
58 views

what if change in open interest is very high but volume is low [closed]

in a strike price the change in open interest is 1300000 with volume of just 1800, what does it mean if it possible please also explain difference between volume and change in open interest.
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3answers
682 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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2answers
73 views

Exercising Options question. Please check my math

I'm spending some time learning options and I have a scenario question. I'm attempting to have this make sense in my head but this just doesn't seem right or maybe I'm missing something. I see this ...
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1answer
40 views

How to know when to buy a call versus a put through options statistics

Is there a good method or set of methods that traders can use to know whether to buy either a short term call versus a short term put using only numbers provided in options trading?
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1answer
84 views

Why are my funds locked up in my trading account while using bear put strategy?

Today I used a bear put strategy and I was surprised to see that some funds in my trading account were locked up as margin used. It is well known that the potential loss in bear put strategy is ...
4
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8answers
7k views

Why would someone want to sell call options?

I'm having trouble understanding why someone would want to sell call options. For example, if the writer of a call option owned the shares and they expected the share price to fall, why wouldn't they ...
2
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3answers
109 views

Are there investable securities that grow nonlinearly/exponentially with the underlying asset?

Let's say I'm a commodities trader, and Jesus Christ himself has just told me that gold is about to become much, much more valuable. We'll leave the debate on whether that's insider trading to another ...
3
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3answers
104 views

How to calculate the relationship between a long put and a long call with the same strike price

I have noticed that, a lot of the time, long put and call options have different prices even if they are the same distance from the strike price (lower and higher respectively). Is there a name for ...
2
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1answer
69 views

Tax implications of rolling covered calls

I have friend who is using the covered call options. Some time these covered calls are near assignment and then my friend rolls these calls with higher strike price. What are the tax implications ?
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2answers
60 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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5answers
105 views

Realistic option graphs?

Typical option graphs are only valid at the time of expiration: This only expresses what happens at the moment of expiration (and ignores trading costs). But what about extrinsic value (theta and ...
7
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2answers
2k views

Why do options retain significant extrinsic value after market closing on day of expiration?

Introduction to options sources invariably say an option's extrinsic value becomes zero at expiration. However, in reality this is not the case. For example, it is almost 7pm on 8/21 and "8/21 292 SPY"...
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1answer
279 views

Choosing a strike price when you sell a short combo

Often different stocks that I want to short are not on my broker's "easy-to-borrow" list, so they are unavailable for shorting. A couple weeks ago I got serious about option trading and I found out ...
1
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1answer
832 views

How many naked option contracts can I write if I want to use maximum margin

Let us say I want to write a naked option on SPX in my interactive brokers margin account. If this is the only position I wish to hold in my account, and I want to use maximum margin, then what is the ...
2
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2answers
65 views

How does exchange match multi-leg option orders?

Suppose I submit an order to open an iron condor or some other multi-leg stock option spread with multiple buys and sells. For example, if SPY is trading at 275, I might want to: sell a call at 290 ...
1
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1answer
114 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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1answer
75 views

Do I understand options open interest correctly?

I wasn't able to find a good example of how open interest works. Suppose at the beginning of trading period there is no open interest, these are the only trades made during these days, and all ...
3
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1answer
133 views

I sold call options that expired ITM. Why were they not exercised?

I sold two covered call positions that expired Aug 9. Both expired ITM. The 1st one's strike price was $3.00. At expiration, the stock was $3.13 so 13 cents ITM (6 contracts). The 2nd one's strike ...
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2answers
108 views

Neutral to bearish options strategy above stock price

If a stock is trading at $30 and I believe it will go no higher than $33, is there a spread that I can create above $33? This is a neutral to bearish strategy. I've looked at a debt put spread: ...
1
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1answer
38 views

How to research option maturity dates and volume [closed]

Hello stack exchangers How do I get a list of stocks with their option maturity dates and volume? I am interested in stocks that have frequent maturity dates and high volumes. Once I have a list ...
1
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1answer
41 views

Are funds securing short puts in a cash account considered settled for free-riding?

For cash-secured put writing, I have enough cash in my account to cover the put if it is exercised. Is there a special category that this cash falls into with respect to free-riding? Say I wrote a $...
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2answers
433 views

Selling options below bid on Robinhood

If you sell an option for cheaper than what is someone willing to pay, does Robinhood sell it for the best price or for the price you chose to sell it? I'm trying to figure out if I can do stop loss ...
1
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5answers
2k views

Why buy a vertical spread if I could instead buy a naked call?

If I believe a stock will go up, say from a price of $100, and I wish to execute an options strategy that would make me money if the stock were to rise, why would I want to setup a vertical spread ...
3
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6answers
6k views

Exercising an option without paying for the underlying

As a follow up to my other question, I would like to know whether the following is possible: I have $20,000 in my brokerage account The price of the $300 call is $5.00 (1 contract = 100 shares) I buy ...
1
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1answer
54 views

Size limit on option buying and selling

While using Robinhood I have found that can buy/sell a maximum of 200 call options at a time. Is this a general rule for all trading clients at other brokers such as Ameritrade, Merrill Lynch, etc.?
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1answer
60 views

Wash Sales - Applied to Options

Does anyone know how to account for wash sale that attached based on purchasing options where the last transaction was the purchase of an option that expired worthless? The issue is that there is no ...
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3answers
1k views

How does a delta neutral portfolio make money

This is a really basic question,so I apologise. If I have a delta neutral portfolio consisting of an option and its underlying, such that any move in the option is cancelled by an opposite move in the ...
2
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2answers
183 views

Why are vertical option spreads level 3, requiring margin?

Why are vertical spreads (e.g., buying a call at one strike and selling a call at another strike, at the same expiration date) classified as "Level 3" options strategies, therefore requiring margin? ...
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2answers
57 views

Put IVs being more than Call IVs - Can this be considered a bearish signal?

If in an Option Chain, 1) Average Put IVs are 4-5% more than average Call IVs 2) IV of Put Options, in general, is more than IV of equidistant Call Options (For eg . - For a stock @ 100 spot price, ...
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1answer
93 views

When an option expires does that constitute a buy or sell

A similar question recently asked about stock sales and option buys triggering wash sale rules. If an option expires, is that considered a buy/sale ? What I mean is: let's assume I have a call ...
4
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8answers
22k views

Why does a call option's price increase with higher volatility?

As per the Black-Scholes model, the value of a call option is directly proportional to the volatility. Without getting into the derivation of the BS equation, is it possible to intuitively understand ...
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0answers
111 views

Nadex binary option - trading at excessive prices?

I recently came across Nadex and in particular their binary option markets. Such an option pays off $100 or $0 depending on whether a specific exchange rate exceeds a strike price at a specific date. ...