Questions tagged [put-options]

A put option is a contract giving the owner the right, but not the obligation, to sell–or sell short–a specified amount of an underlying security at a pre-determined price within a specified time frame. Related tags are [call-options, options, options-assignment, option-exercise and should be used when appropriate.

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53 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
26 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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56 views

When buying back a put option, what happens to the buyer?

If I sell a put option and buy it later back, what does that mean for the buyer? Can he now sell the shares to my seller? I don't quite get this relationship. Also, what if I have a very deep ITM put ...
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35 views

Put Option Help

As part of a newsletter subscription service, I purchased the following at their recommendation: 4 contracts of USB May 21, 2021 $52.50 Puts at price of $1.33 1 contract of HD May 21, 2021 $295 Puts ...
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37 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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35 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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3answers
92 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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1answer
33 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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2answers
157 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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7answers
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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
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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1answer
121 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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2answers
55 views

Not clear about margin requirements on Shorting Puts

I'm trying to understand how Margin Requirements work when trying to sell a Put Option without having sufficient cash to cover the Option in case it's assigned. For example, let's say I have $100 ...
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2answers
122 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
75 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
57 views

How to hedge/protect my stocks that do not have an option chain?

I've recently invested in a couple of OTC stocks (1st time exploring the OTC market) and unfortunately there's no option chain available. Question is, how can I protect those stocks in particular from ...
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1answer
75 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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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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For an individual brokerage account user, what is the cheapest way to take a short position in a stock?

As far as I know, if I want to sell short, say, $100 worth of stock I need to post $150 in cash collateral and pay some fees each day. Another way is to buy a put option. In that case, I need to pay ...
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93 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
228 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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Deep in the money put options

I'm trying to make sense of this option: Type: put Expiry: 2021-02-05 (= this week's Friday) Bid: 580.4 Ask: 584.9 Contract size: 100 Strike: 800 The underlying's last price is $225. Buying this put ...
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1answer
83 views

Selling a put option and getting assigned

I am using TD Ameritrade platform. Suppose I write a cash secured short put and the option expires in-the-money. The owner of the option then decides to exercise his right to sell. I am okay with ...
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1answer
673 views

GME put option price going down as stock price declines…WHY? [duplicate]

Why would the put option price go down when the stock goes down? 3/19 $20 strike down 30% when gme stock down $50. Can someone explain why the put isn’t gaining value?
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1answer
159 views

Please explain this put option

Earlier today, I purchased 2 put options on GME. The opening price was around $295. The price dropped $30 in 45 minutes to below $265. Why am I not making any money? I looked at all of the put option ...
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2answers
71 views

Are there any major advantages of selling put options with a longer expiry date?

If I wish to sell put options to collect the premium, are there advantages of setting a time to expiry of 56 days as opposed to 30 days? Does this lower the risk? Here I am considering American style ...
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1answer
46 views

Protect “Riesterrente”-retirement account from downside of liquidation

My mom has a german retirement portfolio called "Riester-Rente". Portfolio is mix of bonds and an international fund (DE0008491051). Long explanation: As part of legal compliance, they need ...
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90 views

Why sell a short put at a strike price above current price of the underlying?

I understand that selling a put below the current market value provides: A premium paid up front A chance to buy stock at a lower price Item 1 achieves its maximum gain if the price of the ...
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2answers
675 views

Put Option shown as negative value

I have a cash-secured $4 Put Sell @ $0.41 through Robinhood; decided to do a low expense introduction to options. When this contract was opened, I was credited the premium of $41 and had $400 set in ...
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1answer
79 views

Why roll a credit spread out and keep the same strike price?

I’m confused: Why would you ever buy the same strike price when rolling out a bull put spread if the price has moved against you? If the price ever falls below the price you sold the put for, you can ...
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1answer
49 views

2 questions about puts/calls/shorting

I have 2 questions about puts/calls + shorting in my learning about options. I'm confused about how "short selling" a stock is the same/different as "writing a covered call." In ...
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1answer
37 views

Option Premium Increasing Toward Expiration

I understand that premium pricing is dependent upon a few factors like intrinsic price and time value, the latter being affected by volatility. But as I look at my risk profile in thinkorswim on a ...
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1answer
23 views

spx vertical bull put price selection

I just started trading SPX vertical bull put spreads. Had a few winners but am not sure about picking the right credit prices. It seems like system always recommends mid prices for opening or closing ...
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1answer
78 views

Out of money option not worthless at the expiration

I just started selling the cash secured puts. I was under the impression that all options unless in the money expire worthless on the expiration day but apparently that's not the case. I had sold a ...
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1answer
32 views

Vanilla options on major US equity indexes – what is the best way to buy them via individual brokerage account?

Please help me with two questions: What is the best way to buy plain vanilla options on US large, mid, and small cap indexes, such as Russell. I’m looking for some actively tradeable options with ...
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1answer
107 views

Stock Sold at Loss, Will buying a Put Option Cause a Wash Sale?

I sold 250 shares of a stock at a loss of (-1,000). 2 weeks later bought a single put contract (100 shares) n the same stock. If I sell the put option for profit a few days later, is this a partial ...
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2answers
193 views

ITM Options that are already profitable including the premium

Note: I am new to options and not very experienced. There are generally no free meals in life, and in the stock market, if something is too good to be true, it is. I have researched this question ...
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1answer
32 views

Explaining different risk/reward ratios of bull put spreads with same strikes but different expirations

I've been looking at call spreads and put spreads and observed some vastly different risk/reward ratios even when the same spread width is used. Can someone please explain these differences? All ...
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1answer
83 views

Options trading and arbitrage [closed]

Near market closing time on a given day, you lose access to stock prices, but some European call and put prices for a stock are available as follows: All six options have the same expiration date. ...
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1answer
63 views

How does an option's premium depend on its strike price?

(NB: In this question's title, and elsewhere throughout this post, I have used the word "options" as a stand-in for both "call options" and "put options", for the sake of ...
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2answers
128 views

Is there a scenario with unlimited risk while buying puts (esp. when they expire)?

My apologies if this is too simple a question, but there's a (possible) misconception that I wanted to clear. I did search for resources on the web and I think I have understood about 90% of the ...
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2answers
113 views

Options Help - Partial allocation of shares?

I'm still learning options trading and got into it recently on Robinhood - but I have a few quick questions. I have 2 contracts for ACB $12.5 Put 9/4. When I go through the steps to exercise it, I ...
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53 views

Does dividend capture strategy work? What are the tricks to make it work? [duplicate]

Title says it all. I buy around say, for e.g. $10,000 of a stock paying dividends just before the Ex-div date, and buy puts to hedge the move down after dividends are released and then sell off the ...
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1answer
165 views

Lot size for NASDAQ Equity options

I'm going to trade in NASDAQ equity options, please share link where I can find lot size of each equity option contract?
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1answer
29 views

NASDAQ Equity Option settlement

Suppose in NASDAQ i sell APPL equity put option of week and that option became ITM then would this option will settle in cash or physical delivery of stock?
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2answers
2k views

Put option lost value when stock price dropped?

I had purchased 3 puts of MNOV yesterday with a strike price of 7.50 when the stock was worth around $11 and it raised as high as $13+ The stock price had dropped as low as $7.15 and is currently ...
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1answer
50 views

Help understanding Collar strategy

Could someone explain the drawbacks of this option collar strategy on PPL? It looks to me that there is minimum risk. I use Robinhood for my trades and pay no commissions/fees. Buy 100 shares for $...
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1answer
68 views

Adjusted Options (uncovered short puts) on Expiry

I sold 35 short puts (adjusted options) each for $1.30 premium a month ago. CHKA1 07/17/20 Put, Strike price $1.50, Underlying symbol: CHKAQ (formerly CHK) After CHKAQ went bankrupt and currently ...
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2answers
71 views

Put option prices for IWM and SPY decreased on Jun 26, 2020

I own IWM and SPY index puts whose prices did not rise June 26, 2020 when both the IWM and SPY fell by more than 2%. For example: IWM 10/16/20 $95 put 1.92 x 2.01 B/A 1.93 close, down 0.05 SPY 12/...
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Does option “automatic exercise” take commission into consideration?

Automatic exercise is a procedure implemented to protect an option holder where the Option Clearing Corporation (OCC) will automatically exercise an "in the money" option for the holder, ...

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