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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Option chain with nil bid quantity and price

Let's assume I bought a call option ABC CE @.50 and now its value is @.10. There is no bid price or bid quantity. Am I able to sell the option at @.10 anyway?
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2 answers
80 views

If I short an option and the buyer exercises the contract, what will happen?

Let's say that I'm on TDAmeritrade. I short a call option to collect a premium. I also own 100 shares of the same stock in the same account. In a week, the option is in-the-money and the buyer ...
3 votes
2 answers
128 views

Significance of the word iron in option strategies

Why is the word iron used in some of the option strategies, like iron butterfly or iron condor ?
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4 answers
168 views

After you sell a put option that you initially bought from an option writer, are you still responsible for buying the shares if it's exercised?

I'm a little confused on how options trading works, namely what you are selling when you sell an option. Let's say you buy a put option for 100 shares at a strike price of $100 for a company XYZ that ...
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3 votes
1 answer
141 views

Who are the non-speculative buyers of futures options?

I am trying to understand who would be a non-speculative buyer of options contracts on futures. There are a plenty of descriptions of how options work online, but mostly they omit this crucial part of ...
0 votes
2 answers
73 views

Where to find a list of US stocks with monthly expiration options only? [closed]

Does anybody know where to find a list of US stocks with monthly expiration options only (no weeklies plz) ?
0 votes
1 answer
73 views

Are gains/losses on selling 12 months+ puts short- or long-term capital gains/losses?

If I sell a put and only close the transaction after 12+ months of holding that position, is it a long- or short-term capital gain/loss? Some more context: For part of my portfolio, I sell some long-...
0 votes
1 answer
66 views

Can you explain to me, in what months are the futures and options on gold and silver listed, based on the CME description?

I read the following contract specifications from CME and couldn't figure out/understand it. On Gold; Futures: Monthly contracts listed for 3 consecutive months, any Feb, Apr, Aug, Oct in the nearest ...
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2 answers
86 views

Managing Long Straddle

Am a beginner in option trading. Recently started learning option strategies. The long straddle looked particularly appealing. However to make a profit the underlying needs to move, lets say around 2%....
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2 answers
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Protective put became ITM before expiration. How to prevent option exercise?

Options beginner here. I have a protective put on a stock and it became ITM 2 days before expiration. I do not want the option to be exercised, since I’m bullish on the stock, and want to continue ...
0 votes
0 answers
73 views

How do "Crabs" make money exactly? [duplicate]

So again i'm used to Crypto Currencies, and since im stupid i learn most things from threads from /biz/ (fortunately i still take decisions based on myself), i've seen plenty on lingo like a bull ...
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-1 votes
1 answer
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I bought an option it has a volume of 3 it expires two weeks from the purchase date it jumped 650% and drops then rises even higher

I bought 5 options contracts. It goes from being worth $125 then shoots up to over $1,000 then decreases in value when I try to sell. I tried to sell three times while it had a 552% increase, but it ...
0 votes
3 answers
126 views

How to buy 100 shares when exercising call option

I recently got into options, and I'm a bit confused on how to exercise my contracts. I have an in the money contract. I understant that if I sell to close, I sell the contract at its current price, ...
10 votes
3 answers
3k views

Company just got acquired. What does this mean for my common stock?

I own 200 common shares of a private company I worked for up until about 3 years ago. Today, I read in the news that they were acquired for a LOT of money but I don't know yet what the current stock ...
2 votes
1 answer
74 views

Why there are duplicated option chains in futures?

As in the screenshot, there are two and three similar option for the same contract with same expiry date. What is the reason ?
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1 vote
1 answer
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How to read double apostrophe prices in futures options?

How to read double apostrophe prices in futures options?
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1 vote
1 answer
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Are future options per 100 unit?

In futures (for commodities, indices, fx...); Is 1 option for 100 future contracts ? For example: If I want to make a covered call option for Gold and for micro Dow jones future, How much should I buy ...
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0 votes
1 answer
60 views

Availability of proceeds from the exercise of a long put

If I bought a put option in a cash account, it expired ITM and was exercised automatically on Friday, could I use the proceeds on Monday or would I have to wait T+2 working days until Wednesday for ...
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0 votes
2 answers
74 views

Is It easy to buy back a put-option on its expiry date?

Say I sold a BABA put expiring 5/24 . The usual advise is to close at 50% profit. What If I leave my position open until the expiry date. The put option will be expiring with no value for the other ...
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1 vote
2 answers
216 views

Covered call selling and wash sale or potential IRS problems?

I have a stock position that went south really quick and I have been holding on for about 5 months now. My last average down was 4 months ago. My average price is $12 and the stock is currently ...
1 vote
1 answer
64 views

Is using proceeds from a short sell or put option to cover the cost of excercising a call option considered freeriding?

I heard that freeriding is not having the cash to pay for the underlying shares when a call option is exercised. If I purchase a call option that is ITM and (purchase a put OR short sell) above the ...
0 votes
1 answer
140 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 ...
0 votes
1 answer
70 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-...
0 votes
2 answers
165 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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2 answers
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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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0 votes
2 answers
87 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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2 answers
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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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1 vote
2 answers
107 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 &...
1 vote
1 answer
62 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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1 answer
243 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 ...
1 vote
0 answers
37 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 ...
0 votes
1 answer
121 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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1 answer
134 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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1 vote
3 answers
77 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 ...
0 votes
1 answer
55 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 ...
0 votes
2 answers
48 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 ...
0 votes
0 answers
42 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 ...
3 votes
1 answer
154 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 ...
1 vote
3 answers
468 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 ...
1 vote
3 answers
101 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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2 votes
1 answer
84 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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0 votes
1 answer
526 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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2 votes
2 answers
290 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 ...
1 vote
1 answer
84 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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0 answers
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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 ...
1 vote
2 answers
373 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 ...
0 votes
0 answers
353 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 ...
0 votes
2 answers
384 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 ...
25 votes
7 answers
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. ...
-1 votes
2 answers
202 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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