New answers tagged put-options
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A collar involves using options with different strike prices. Your strike prices are the same and therefore it is technically an arbitrage strategy called a conversion.
Yes, -$162 is the maximum loss. However, it is highly unlikely that you will collect all of the dividends (possibly none) if PPL rises because your in-the-money short calls will be ...
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The amount of trading in your option is irrelevant. What matters is if there is an ask quote other than zero for them. If there is, you will be able to exit. If not, offer to buy them for 5 cents. Someone might bite.
If your options expire out-of-the-money then they will expire worthless. If in-the-money then you will be assigned.
There's always a ...
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As others explained, the expected change in value is rather small - maybe there simply was nobody that cared to trade an option that is so far out of the money.
Also, consider that many online platforms allow only .05 multiples for limits, If the perceived value really went from .42 to .38 $, both numbers would round to .40 for a large number of investors.
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Because your puts are so far out-of-the-money, they have negligible deltas and therefore the expected option price change is going to be near negligible with a drop like Friday's. Because that price change is going to be so small, it can disappear into the bid/ask spread, appearing unchanged or even moving in the opposite direction.
The delta of your SPY $...
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When you will have shares in your account after you exercise will depend on how timely your broker processes and handles exercise.
At my broker, the moment I click 'Exercise', the transaction occurs immediately and either the short shares disappear from my account or the long shares are now there. This is reflected immediately on my Accounts Summary page. ...
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A call option is in-the-money (ITM) if the market price is above the strike price.
A put option is in-the-money if the market price is below the strike price.
In the US, if an option is one cent or more in-the-money (ITM) at expiration, the Option Clearing Corp (OCC) will automatically exercise options whether they are long or short. This is called Exercise ...
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For a call option, it means the price of the underlying (stock) is at least $0.01 above the strike.
The payoff is independent of the premium but at expiration the premium would be zero anyway, as there is no time value left.
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Per your link:
In accordance with the terms of the merger agreement, Yageo has acquired all of the outstanding shares of KEMET’s common stock for US $27.20 per share in an all-cash transaction with an equity value of approximately US $1.6 billion. As a result of the transaction, KEMET is now a wholly-owned subsidiary of Yageo, and KEMET’s common stock is no ...
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The broker will automatically borrow the shares from another one of its accounts (or from another broker) if it is borrowable and you have the margin to support the short share position because of the incentive of receiving the borrow rate.
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Buying a naked put is an outdated description from decades ago. You're buying a put either to open a long put position or to close an existing short position. A naked put is one that has been shorted and is not covered.
When you own a long option, you have the right to exercise it. You cannot be forced to purchase the underlying security. The only time ...
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These answers are good.
If someone is selling a “put spread”, they may sell a moderately priced put, then buy this very far out of the money put so that they don’t tie up too much cash in their margin account.
Selling premium can be lucrative over time for far out of the money puts.
But if you want to stay in the game, you should always protect against ...
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