Pérdida de Riesgo Máxima / Pérdida Máxima de Recompensa: Ilimitada en un mercado en baja, aunque en la práctica se limita realmente a la huelga - cero, ya que una acción no puede ser negativa. Ganancia Máxima: Limitado a la prima recibida por vender la opción de venta. Características Cuándo utilizar: Cuando usted es optimista en la dirección del mercado y bajista en la volatilidad del mercado. Al igual que la opción de llamada corta. Vender puestos desnudos puede ser una estrategia muy arriesgada ya que sus pérdidas pueden ser importantes en un mercado en baja. Aunque la venta pone lleva el potencial de grandes pérdidas en el lado negativo son una gran manera de posicionarse para comprar acciones cuando se convierte en barato. La venta de una opción de venta es otra manera de decir que compraría esta acción para el precio de ejercicio si fuera a negociar allí por fecha de vencimiento. Un corto poner bloqueos en el precio de compra de una acción en el precio de ejercicio. Además, mantendrá cualquier prima recibida como resultado del comercio. Por ejemplo, digamos que AAPL se cotiza en 98,25. Quieres comprar esta compra de acciones creo que podría salir un poco en el próximo par de semanas. Te dices a ti mismo si AAPL se vende a 90 en dos semanas voy a comprar. En el momento de escribir esto la opción de venta de noviembre de noviembre (21 de noviembre) se cotiza a 2,37. Usted vende la opción de venta y recibe 237 para el comercio y ahora han bloqueado en un precio de compra de 90 si AAPL operaciones que baja en los 10 o más días hasta la expiración. Además, puedes mantener el 237 sin importar qué. El riesgo aquí es que los tanques de acciones antes de la fecha de vencimiento dejando con el potencial de ser ejercido y tomar la entrega de las acciones a los 90 cuando, por ejemplo, se negocia a los 80 cuando se le asigna la acción. Si la caída ocurre temprano, y es significativa, es decir, en o por debajo de la huelga, que desea volver a evluir su comercio y potencialmente salir de la opción de posición antes de que las pérdidas aumentan. Si la caída en el valor de la acción se produce cerca de la fecha de vencimiento y todavía no es a través del precio de ejercicio, un buen plan de salida es poner una orden corta de paro en la población misma. De esa manera usted será cubierto en el ejercicio si ocurre mientras deja abierta la posición de opción para capturar el valor de tiempo restante. Comentarios (56) Peter 23 de marzo de 2015 a las 6:26 am Sk 22 de marzo 2015 a las 6:11 am Diga que usted compró Apolo Contrato de opciones en la huelga 2500 Premium 150 Dibujar un corto Poner Pagar a precios inferiores Peter 22 de febrero 2015 en 10: 46pm No hay problema, feliz de ayudar Hazme saber si hay algo más. Pk 22 de febrero 2015 a las 9:44 pm Gracias. Creo que lo entiendo ahora. Por lo tanto, no hay tasas de intereses reales que el comerciante está pagando por ese margen que se emite del corredor para vender pujas sin garantía en efectivo. Pero habrá retención colocada en una parte de los fondos de su cuenta, mientras que la venta se pone en juego, por lo tanto no es libre para otros oficios. No se le cobra una tasa de interés sobre la cantidad de margen no garantizado en efectivo mientras que la venta pone parece un buen negocio para mí. Aprecio que usted sea paciente con algunos de nosotros los comerciantes más nuevos mientras que intentamos entender el juego. Peter 22 de febrero de 2015 a las 9:15 pm Veo - creo que hay una cierta confusión en términos aquí. Lo que usted una porción de dinero para el comercio de valores. Sin embargo, para los comerciantes al por menor el valor marginado (prestado) por lo general sólo se aplican a las acciones, es decir, usted no podría negociar opciones sobre el valor del margen - sólo se puede utilizar efectivo. Podría estar equivocado, pero viendo como las opciones y futuros son instrumentos ya apalancados sería demasiado riesgo para los corredores para permitir que éstos se negocian en dinero prestado. El margen al que me refiero es el - o la cantidad de dinero asignado para apoyar el cargo. Es decir. Para un contrato de opción corta, sólo una promesa de entregar si se ejerce. Por lo tanto, el corredor necesita asignar parte de su cuenta para reflejar el riesgo involucrado en esta posición. Esta cantidad también se denomina margen. Echa un vistazo a la almohadilla de confirmación de pedido de esta orden de opción de venta corta que puse en BBY acciones Haga clic para ampliar Estoy vendiendo una opción de venta de 33,50, por lo que esperar a ir a largo de la acción a un precio de compra de 33,50 por 100 acciones si se ejercen. La exposición total sería por lo tanto 3.350, sin embargo, el corredor asigna solamente 402 de mi cuenta para apoyar esta posición 12 del tamaño obligado. Este margen ganado, pero se deducirá de la cantidad total de dinero en su cuenta disponible para otras posiciones. Hacerme saber Si no Pk 20 de febrero 2015 a las 12:56 am Supongo que podría haber entendido mal el concepto de cuenta de margen Totalmente pensé que la cuenta de margen funciona de esta manera: dicen que tengo 50k en efectivo y sobre la base de que el dinero que dan Una cantidad de margen de 20k (no pago interés. Pero si he vendido más cantidad de puts y tuve que usar 50k más los 20k para cubrir mis puestos vendidos, estaría pagando intereses sobre el 20k al corredor así que viene mi pregunta Si la venta de un margen de venta vertical disminuye el margen requerido de mi cuenta y por lo tanto tener que pagar menos intereses, pero no maximizar mi consumo no sólo por la venta de puestos sino también la compra pone en la vertical poner propagación VS. Mi margen (50k 20k) y el pago de un cierto interés para el corredor de los 20k si hice la venta de la vertical poner propagación, me gustaría comprar un OTM profunda poner que es barato sólo con el fin de disminuir el margen necesario. Yo sé que t tiene que pedir prestado más haciendo la propagación vertical poner más vale la pena maximizar la ingesta completa de vender puestos desnudos sin disminuir la ingesta con la parte de compra de la vertical poner propagación Muchas gracias Peter 19 de febrero 2015 en 10:32 pm Sí, te escucho en el margen inferior para liberar el capital - pero no estoy seguro en el lado del interés de las cosas. Tenía la impresión de que el dinero asignado para el margen no se equivoca - puede que tenga que aclarar con mi agente. Además, va para una propagación de poner en lugar de poner desnudo depende de su punto de vista de la población. Si usted re punting en un movimiento hacia arriba y al mismo tiempo la venta de opciones de alto vol, a continuación, una cierta protección a la baja es una buena idea. Sin embargo, también puede estar dispuesto a ir de largo el stock en el nivel de huelga - si alcanza ese precio en la fecha de vencimiento - y al mismo tiempo recoger algo de prima en hacerlo. Pk 19 de febrero 2015 a las 8:28 pm Intenté publicar varias horas atrás, pero mi pregunta aún no ha aparecido, así que por favor, disculpe si esto termina siendo un post de repetición. ¿Es mejor vender los spreads verticales en lugar de vender puestos desnudos? Lo que quiero decir es decir tener acciones ABC a los 100, vendiendo 95 strike pone x 10 por 1 / per y comprar 85 strike poner x10 por aproximadamente 0,25 / per en lugar de sólo vender desnudo Poner 95 x10 para 1 / por lo que estoy pidiendo porque esto reducirá el margen necesario. Lo que disminuiría la cantidad de interés que tendría que pagar en el margen adicional utilizado, aproximadamente 6. Además, liberaría el margen que podría utilizar para otro comercio. ¿El extra de 0.25 / contrato que no perdería haciendo una puesta desnuda vs una posición vertical, más que vale la pena preocuparse por pagar el interés de margen. Me gustaría escuchar sus pensamientos Pk 19 de febrero 2015 a la 1:22 pm Gracias por su respuesta. Pregunta rápida, ¿cuál es su opinión sobre una propagación de put vertical en lugar de sólo vender puts Si ABC está actualmente en 98, la venta 95 10 pone ABC para 1 y comprar 85 o 80 strike 10 pone para 0.25- 0.20 fecha de vencimiento aproximadamente 1 mes. Sé que esto reduce su consumo neto, pero no reduce el margen necesario Así liberar el margen para su uso en otros oficios y también reducir los intereses en el margen O ¿cree usted que el dinero ahorrado en los intereses en el margen no suele ser igual a la Cantidad necesaria para comprar el put Dado el interés de margen alrededor de 4-5 Peter El 17 de febrero de 2015 a las 4:02 am El problema es que como la acción cruza el nivel de huelga no hay garantía de que todavía estará bajo la huelga en la expiración - y por lo tanto En necesidad de ejercitarse. Lo que quería decir es que la opción de venta corta todavía tiene un valor de tiempo que queda en ella, es decir, una oportunidad de que expire fuera del dinero y mantener la prima. Si se corta el stock (poniendo en una orden de venta de stop) antes de que expire la opción, se podría dejar la celebración de esa posición si el mercado se reúne sin tomar la entrega de las acciones para compensarlo. Claro, usted puede ir a comprar de nuevo el stock, pero por ese momento seguramente va a hacer una pérdida. A menos que yo -) Pk 16 de febrero de 2015 a las 8:16 pm Me encontré con este artículo hoy, no sé si todavía recibe mensajes de ella. Soy un poco nuevo en las opciones y tratando de aprender. En su última respuesta a Francois, usted dijo que el riesgo es que si las acciones se reúnen, quedan sólo con la posición corta. Pero ¿qué pasa si lo hicimos la parte final en la sugerencia de Francois y puso una orden de stop para vender si la acción se recupera por encima de 89 Francois 28 de abril de 2014 a las 7:02 am Agradable, me gusta sus pensamientos sobre esto, gracias por publicar Creo que un problema Es que usted no es corto el puesto seguro, pero si el mercado se reúne antes de la expiración sólo tendrá una posición de stock corto. Francois 26 de abril 2014 a las 10:25 am Proteger posiciones cuando el mercado se mueve contra usted. ¿Por qué no simplemente agregar una posición de stock (poner orden de parada al mismo tiempo que entras desnudo poner o llamar) a sus posiciones desnudas cuando se ITM IE: XYZ trading a 100 - VENDER 90PUT para 2 (break-even es ahora 88, máximo beneficio 89 - Si el stock cae por debajo de 89, entonces se ingresa EN CORTO en XYZ 89 para que luego consiga 1 de su prima vendida Y esté totalmente protegido Como la acción continúa disminuyendo - De allí usted puede poner orden de la parada para vender la acción si el precio se recupera sobre 89, etc. Si en la XYZ de la caducidad declinó a 80: - usted tiene la prima 2 en el 90PUT vendido - le asignan la acción en 90 (pago 90 menos 2 crédito recibido pero vale 80 por lo que la pérdida de 8) - cubrir su posición corta (vendido por 89, comprar de nuevo a 80 de beneficio de 9) - beneficio total de 1 Igual va para vender llamadas desnudas Pida un poco ITM para entrar en stock LONG y usted consigue guardar algo de su prima vendida Y totalmente protegida mientras que la acción sube más lejos. Añade un poco al costo de mantenimiento (comisión, propagación), pero es definitivamente mucho más barato que comprar un paquete deflactado opción. ¿Estoy perdiendo algo aquí Peter, 05 de marzo 2012 a las 5:51 am Bueno, supongo que es la estrategia -) corto el puesto, esperar a que disminuya hasta llegar a su meta de beneficio. Newbz 01 de marzo 2012 a las 7:10 pm Peter, sí, sería una pérdida si compré un corto vendí a un precio más alto - que tiene sentido. Bueno, hay alguna estrategia que implica escribir un contrato corto para 1, con la esperanza de que se reduce a 50cents luego comprar de nuevo por lo que terminan con una ganancia neta de 50cents en lugar de la prima 1 Lo ideal sería que la opción para expirar, pero Tal vez en el caso de una llamada desnuda / puesto que está preocupado por el comprador que pasa con el contrato. Peter 01 de marzo 2012 a las 6:38 pm Hola Newbz, si usted vende un corto poner en 1 y luego comprar el mismo puesto para 2, entonces usted hace una pérdida de 1. Al igual que lo haría si lo compró por primera vez para 2 y lo vendió Fuera para 1. Pero sí, el participante que sostiene la posición corta es el que está ab ligated para entregar si asignado. Puede que no sea necesariamente la misma persona que estaba en el otro lado de su transacción. La cámara de compensación de opciones agrega todas las posiciones de opciones basadas en el comercio a través de un proceso llamado novación (consulte la sección titulada). Newbz 01 de marzo 2012 a las 4:56 pm Peter, resulta que no había compradores para esa opción que estaba vendiendo - problema resuelto. Tengo otra pregunta, y le pedí una similar a esto en la entrada de Llamada larga en este sitio. Si escribo un Short Put para 1 y digamos que el valor de ese contrato aumenta a 2 y ahora quiero obtener un beneficio. ¿Es la persona que compra el contrato de corto plazo de mí ahora obligado a cumplir el contrato en lugar de mí Peter New York 01 de marzo 2012 a las 4:48 h Hola Newbz, ¿cuál es el simulador que está utilizando I t cualquier compradores o donde se supone que las ofertas viene de. Pero si la opción tiene algún valor intrínseco siempre habrá un comprador como los creadores de mercado se base de puja obtener una cobertura en el subyacente. Sin embargo, si la opción es out-of-the-money y muy cerca de la expiración, entonces es posible que no habrá compradores y sólo tendrá que permitir que la opción de caducar sin valor. Newbz 01 de marzo 2012 a las 10:59 Estoy tratando de vender 10 contratos de un precio de huelga 50cent. La oferta es 0 y la pregunta es 20cents. Obviamente venderlo a 0 es inútil, así que intenté 10cents y esperé un poco. La orden permaneció abierta. Se movió a 5cents y esperó. Todavía un orden abierto. No pongo mi precio a 1cent tampoco. Esto es sólo el comercio de papel por lo que no es a precio de oferta, que es de 0, así que ¿por qué lo venden. Peter 16 de noviembre 2011 a las 7:46 pm Mmm..yeah, no muy seguro. Podría adivinar y decir que el 178 es la pérdida entre el precio de venta y el precio de mercado actual, sin embargo, usted dice 0,27 es el precio actual A menos que la posición se valúa contra un precio que no sea 0,27 - decir promedio de la oferta / O último, que puede ser algún otro precio. Entonces yo habría dicho que el 280 fue la pérdida, incluyendo las comisiones. Pero eso sugeriría que usted paga aproximadamente 10 por contrato en corretaje. ¿Cuáles son sus tarifas? Para cuando expire la opción, si todavía está fuera del dinero, entonces el precio de la opción se han negociado de 0.27 a cero por lo que las pérdidas no realizadas se han acreditado de nuevo en su cuenta y usted Quedará con el crédito de 110 de la venta inicial (menos los honorarios de corretaje). Mark 16 de noviembre 2011 a las 6:11 pm Lo siento, supongo que debería haber mencionado que compré 10 contratos de opción Mark 16 de noviembre 2011 a las 6:06 pm Gracias por la rápida respuesta de Peter. Estoy usando Etrade como el corredor. Veo el margen de 4400 o así donde hay contabilidad de lo que usted está hablando. Espero que no tenga que conseguir excerised y mi preocupación es por qué el espectáculo de un loos. Cuando miré la posición en mi cuenta principal que muestra una pérdida de valor de mercado de 280 sin embargo en mi plataforma de comerciante muestra una pérdida de 178. El precio de ejercicio para la opción que compré es 119 que expira en unos pocos días. Suponiendo que nunca llegamos a esa baja al final de la semana, digamos quizás 121, que aún mostraría una pérdida. ¿Qué pasa con la pérdida? ¿Todavía obtengo la prima? Peter November 16th, 2011 at 5:23 pm Cuando usted vendió inicialmente la oferta, 11 se habrían acreditado a su cuenta. Pero su posición será revaluada de acuerdo con los precios actuales del mercado, por lo que con la opción ahora en 0.27 tendría una pérdida de 16 en la posición. Sin embargo, debido a que está corto una opción desnuda su corredor también deducirá un poco de dinero de su cuenta como un margen en caso de que se ejerce y tiene que tomar la entrega de la posición subyacente. En este caso, como es un índice, no habrá un ejercicio, por lo que el margen se utiliza como un amortiguador contra una gran pérdida. ¿Hay una manera que usted puede ver el desglose de la transacción para confirmar ¿Qué corredor que utiliza Marzo 16 de noviembre 2011 a las 4:06 pm He vendido un desnudo poner hoy. (Vender para abrir un put OTM para SPY) Fue el 119 nov puesto y lo vendí por .11. Sólo quería la prima por ello. El mercado bajó hoy y ese mismo put es ahora .27. Ahora está mostrando una pérdida en mis posiciones de alrededor de 180. ¿Es esto normal. Estoy asumiendo que puedo dejar que expire, pero ¿qué pasa con la pérdida, dows expira con la opción. ¿Es cargado a mí porque no veo una prima recibida dondequiera en mi sitio. Peter 7 de septiembre 2011 a las 7:48 pm Sí, no sé por qué. Pensé al principio que podría ser debido a un dividendo, pero la compañía nunca ha pagado un dividendo y un 2,17 por dividendo de acciones parece un poco poco realista. Contestaré cuando / si descubro. Sam 6 de septiembre 2011 a las 1:42 am Como puedo ver, el mercado no es tan simple ir práctica. Si usted toma LDK solar, las opciones de venta son severamente caro. El precio actual de las acciones es de 5,3 y las de diciembre con precio de ejercicio 5 son 0,7 / 2,3 y la put no es ni siquiera ITM. El problema es que es difícil obtener el stock corto, por lo que no puede realmente cubrir completamente. De todos modos, hace una semana fue posible formar una posición de -100 acciones, 2 llamadas y -1 poner con ganancias garantizadas de 18 en cuatro meses, el único problema es que no se puede ir corto fácilmente :) Y supongo que No puede estar seguro de que obtendrá beneficios ya que el corto puede ser recordado en cualquier momento. No es un mercado perfecto Peter 05 de septiembre 2011 a las 5:34 pm Hola Sam, no tienes razón. Esto presentaría una oportunidad de arbitraje. Las llamadas y pujas deben ser tasadas de acuerdo con el teorema de paridad de put call. Esto indica que Call - Put Stock - Strike. Más información sobre la paridad de llamadas put aquí. Sam 1 de septiembre 2011 a las 6:24 am Gracias, Peter. Una cosa más que está en mi mente: Si ATM llamadas y opciones de venta se negocian a una gran diferencia, podría haber una oportunidad de arbitraje Vamos a decir: el stock está en 10 10 call trades en 1, mientras que 10 puestos de comercio a 5 Como entiendo , Deben operar cerca uno del otro. ¿Cuál es mi error En este ejemplo, si corto el stock, larga 2 llamadas y corto el puesto, que totalmente cubrirse y permanecer mucho tiempo con los beneficios de un aumento en el precio. Aquí hay una tabla improvisada basada en los números. ¿Estoy perdiendo algo 0 5 10 15 20 precio de las acciones 10 5 0 -5 -10 corto el stock -2 -2 0 10 20 largo 2 llamadas -5 0 5 5 5 corto 1 put 3 3 5 10 15 RESULTADO Basado en estas empresas (Si usted es capaz de encontrar este error), obtendrá un beneficio cubierto cuaranteed con lo que sube si los precios suben. Por favor, dígame dónde está mi error :) Gracias de antemano :) Peter 1 de septiembre 2011 a las 2:13 am Porque usted ha vendido el poner su riesgo es que el mercado se cae y el comprador de la opción de ejercicios eso. Si el comprador pone la opción de su opción entonces usted está obligado a comprar la acción de él / ella al precio de ejercicio. Por lo tanto, en su caso, si ejerce usted tendría que tomar la entrega de la acción a 10 y pagar 1.000 por contrato (10 x 100). Sin embargo, mantendrá la prima recibida cuando vendió inicialmente la opción de venta. Sam 01 de septiembre 2011 a las 2:04 am Hola, estoy un poco confundido ahora: vamos a decir que corto un put con un precio de ejercicio de 10. Isn t la pérdida máxima que puedo tomar es -10 por acción menos la prima (- 1000 por contrato) De la misma manera que el put tiene un pago de ganancias limitado ¿Hay otros puntos que necesito para mirar ¿Cómo reaccionan las opciones a las divisiones, la quiebra y así sucesivamente Soy bastante nuevo en el comercio de opciones, y vendió un puesto con El plan para mantenerlo hasta la expiración, ¿cuáles son los riesgos involucrados? Si necesita calcular la prima de una opción, entonces tendrá que entender primero la mecánica Del precio de la opción. Entonces necesitará una calculadora - puede descargar mi hoja de cálculo de opciones. Que calcula el valor razonable de una opción. Sin embargo, usted estará comprando y vendiendo contra de todos modos. 2. Sí. Si la orden todavía está en el mercado que espera para ser llenado, el comerciante puede apenas quitar la orden antes de que se llene si él / ella cambia su mente. 3. Sí. Hay una captura de pantalla en esta página que muestra lo que llamamos una cadena de opciones. 4. Sí. Pero depende de la plataforma que botón que si hace clic en abre un billete de pedido para hacer lo contrario de su posición actual. Nat 09 de agosto 2011 a las 12:37 am Sólo me odio a mí mismo por molestar de nuevo, pero parece ser el profesor de opciones perfectas. Tengo 4 preguntas de la siguiente manera 1. ¿Cómo se calcula la prima de la opción 2. Si el vendedor de la opción se da cuenta de que no quiere vender su opción aunque ha puesto un pedido de venta, pero nadie lo ha comprado todavía , Puede cancelar su venta 3. Cuando el comprador entra en la plataforma de negociación (entra en el mercado para hacer sus compras), ¿ve una lista de contratos de opción ofrecidos a diferentes precios? Entonces elige comprar el que quiere que cumplan con su Especificando, poniendo una orden 4. Al compensar la posición, usted pone simplemente una orden de la venta o de la compra No hay botón de la compensación específico, derecho Muchas gracias y espero que no tengo que incomodarlo más después de esto. Peter 08 de agosto 2011 a las 7:59 pm Correcto. Aunque técnicamente, usted don de su cuenta por su corredor en caso de incurrir en una gran pérdida. La diferencia es que usted todavía debe ganar intereses en el margen. Nat 08 de agosto 2011 a las 7:28 pm Creo que ahora entiendo casi todo, gracias a su explicación. Una última pregunta es, si el vendedor de la opción de venta (o opción de compra) compensa su posición, cuando lo hace que el margen que ha colocado con el corredor se le devuelve después de que cierra su posición Gracias. Peter 08 de agosto 2011 a las 1:48 am Tipo de - aunque los compradores y vendedores en el momento de la transacción no son necesariamente los de cambiar las obligaciones de entrega. Si un comprador de la opción decide ejercitar, entonces el más claro elegirá (al azar creo) a un participante que tenga una opción corta de la opción a ejercitar. Este proceso se llama novación. Nat 08 de agosto 2011 a las 12:28 am ¿Quiere decir que el vendedor (vamos a llamarlo vendedor b) en el mercado Entonces, el vendedor b (la persona que compró la opción de) estará obligado a comprar al comprador original a quien Vendió su opción de venta en primer lugar en lugar de él Es así como el vendedor a cierra su posición y sale de las obligaciones que tiene sobre él Gracias y perdón por tomar mucho de su tiempo. Has sido muy útil para mí. Peter 07 de agosto 2011 a las 7:55 pm Una posición corta se compensa de la misma manera que una posición larga es - al hacer el comercio contrario. En este caso al comprar el mismo contrato de opción de un vendedor en el mercado. Nat 07 de agosto 2011 a las 7:35 pm Ahora estoy confundido acerca de cómo el vendedor de un puesto cierra su posición. Comprará el mismo contrato con el mismo precio de ejercicio y la misma fecha de vencimiento para compensar el que vendió. Ahora, ¿de quién lo compra y cómo hace esto cerrar su posición como el vendedor del contrato puesto y lo deja sin ninguna obligación Gracias una vez ganar por su ayuda. Peter 14 de julio 2011 a las 10:56 pm Hola Larry, el término, porque su riesgo como el mercado se vende sigue todo el camino hasta que el mercado llega a cero. Larry 14 de julio 2011 a las 9:40 pm Yo don de. Peter 25 de octubre 2010 a las 7:20 pm Algunos consejos sólidos allí Joel. Gracias Cuando usted dice la zona de la tendencia 50/200. Son estos promedios móviles simples Joel 25 de octubre 2010 a las 5:41 pm Estoy de acuerdo en que la venta de la put es una buena manera de comprar la acción por un poco menos que el precio de venta actual - en otras palabras, para aprovechar una inmersión durante el Período de opción. Estoy usando esto para comprar fuertes dividendos pagando acciones con un descuento si están por encima de la línea de tendencia 50/200 día, y quiero ser dueño de ese stock de todos modos - como Mjasko notó acerca de Goodyear. Así que la estrategia para lidiar con el dinero de otra manera ociosa e innecesaria que está sentado, además de una cartera de otra manera completamente diversificada: 1 - encontrar un stock fiable que quiere poseer que también paga un buen dividendo - Motley Fool Reporte de ingresos tiene muchas sugerencias, al igual que otras fuentes /artículos. 2 - entender el stock t propio. Si de alguna manera esta es su estrategia de inversión primaria, probablemente es mejor hacerlo a través de un ETF de compra / escritura o un fondo de inversión cerrado y no por su cuenta. Mike Griffin 23 de septiembre 2010 a las 5:08 pm Aquí tienes para vender el puesto en el primer lugar. Si parece que el precio de las acciones bajará por debajo del precio de ejercicio en cualquier momento antes de la expiración, (debido a las malas noticias esperadas, informe de malas ganancias, etc.), debe cerrar su posición corta tan pronto como sea posible. Lo tengo PS-ser largo un puesto es lo contrario de ser corto, (es decir, comprar el puesto en lugar de venderlo). Peter 11 de agosto 2010 a las 6:04 pm Es sólo inútil si el subyacente se cotiza por encima del precio de ejercicio en la fecha de vencimiento. Si el subyacente se cotiza por debajo del precio de ejercicio a la expiración de la opción entonces la opción vale la pena el precio de ejercicio menos el precio subyacente, que es su pérdida si se corta la opción. Emmanuel Armah 11 de agosto 2010 a las 10:29 am No entiendo por qué usamos la pérdida ilimitada, porque usted sabe que sus pérdidas desde el primer día que la pérdida máxima es cuando la opción caduca la opción se vuelve inútil. Mjasko 16 de abril 2009 a las 12:52 pm Todos estos comentarios tratan de pérdidas o ganancias a corto plazo. Para mí la pregunta es si el stock o la empresa en cuestión es una buena compra a algún precio. Si usted cree que Goodyear es una buena compra en cualquier caso a los 15 y el stock es de 20 años que está realmente preocupado si Goodyear va a 5 en el corto plazo. Todas mis acciones han perdido valor en el último año. ¿No me gusta No, pero no estoy en el mercado a corto plazo. ¿Espero que el mercado vaya a cero. Si lo hace, entonces tengo mucho más de qué preocuparse que la pérdida de unos pocos dólares. Goodyear a cero es absurdo. Así que por qué toda la charla de la pérdida ilimitada. Si usted está tan preocupado por la pérdida de permanecer fuera del mercado. Si usted es a largo plazo alcista entonces la venta pone tiene sentido Admin 15 de febrero 2009 a las 2:23 am Usted no está anticipando la acción para caer. Usted lo está anticipando para reunirse. Si la acción está por encima de la huelga en la expiración que mantener la prima. SGL 15 de febrero 2009 a las 1:33 am ¿Cómo es un corto puesto considerado alcista si se está anticipando la acción a la caída Admin 18 de diciembre 2008 a las 6:22 pm Sí, señaló. Lo mencioné también abajo: Rick 18 de diciembre de 2008 a la 1:13 pm, no realmente. Hasta qué punto puede caer AAPL. No puedo ir más allá de 0 (cero) Admin Diciembre 8, 2008 at 3:15 am No estoy seguro de lo que quieres decir. ¿Está usted diciendo que su corredor no le permitirá vender una opción de venta Marlowe 27 de noviembre 2008 a las 10:29 am Me gustaría llevar a cabo el comercio AAPL de verdad, sin embargo me han dicho que no puedo llevar puesto desnudo. Pero, puedo comprar una llamada que me cubra. ¿Cuáles son las sugerencias para este feliz de poseer el stock. Creo que la pérdida máxima en un corto poner es (stock - strike) prima y viendo como el precio de las acciones es desconocido y por lo tanto puede ser cualquier cosa que es razonable decir ilimitado. John 31 de octubre 2008 a las 9:03 am sí estoy de acuerdo la pérdida máxima es (Strike-Premium) - 0. Puede haber grandes pérdidas si la huelga es grande, pero ciertamente hay un inconveniente limitado. Admin 23 de septiembre 2008 a las 10:27 pm Un corto poner significa que usted está obligado a comprar el subyacente en el precio de ejercicio si el comprador decide hacer ejercicio. Así que la recompensa es el precio de las acciones menos el precio de ejercicio menos la prima recibida. Una vez que la acción subyacente cotiza por debajo del precio del precio de ejercicio la opción se convierte en dinero. La opción seguirá perdiendo dinero como la acción continúa un movimiento de precios a la baja. Supongo que no es realmente ilimitado como un precio de las acciones no puede ir por debajo de 0. chris 23 de septiembre 2008 a las 2:01 pm Isn t la pérdida máxima de un corto poner el precio de la huelga, no ilimitado Esto no incluye la prima hecha en la venta De la put. Así que la pérdida neta sería el precio de la huelga menos prima Añadir un comentario Copyright 2005 Opción Trading Tips. Todos los derechos reservados. Si bien E TRADE puede no tener las operaciones más baratas, el corredor ofrece un sitio web fácil de usar, una experiencia móvil de alta calidad y una excelente investigación que satisfará tanto a inversionistas ocasionales como activos. Las aplicaciones para móviles siguen liderando la industria La página Revisada completa de Revisión y el Centro de retiro sirven como un gran ejemplo de una experiencia de cliente de alta calidad La organización de contenido de Investor Education Center es fantástica. La plataforma E TRADE Pro requiere 30 operaciones por trimestre o 250.000 en activos para acceso 9.99 operaciones más caras que la mayoría E TRADE Pro carece de profundidad en las capacidades de gráficos y alertas. E TRADE Revista 16 de febrero de 2016: Esta revisión se ha actualizado para reflejar las últimas investigaciones y los resultados de la Revisión de 2016. Una vez conocido por sus anuncios para bebés hablando, E TRADE ha estado trabajando duro para evolucionar como marca y hablar con sus clientes actuales y objetivo. Los clientes E TRADE son conocidos como Tipo E: inversionistas seguros, independientes, pero dispuestos a pedir ayuda cuando la necesitan. Con esta imagen de cliente en mente, E TRADE se ejecuta extremadamente bien en general. E TRADE puede no ser el menos costoso en el bloque, pero la compañía continúa innovando con nuevas herramientas y experiencias para los clientes. Si bien es competitivo con otros competidores de servicios completos, como TD Ameritrade, Fidelity y Charles Schwab, E TRADE no es una opción ideal para los inversores que buscan comisiones descontadas. En el espacio de corredores, sin embargo, lo más a menudo lo que usted paga es lo que obtiene, y E TRADE s bien redondeado ofrece offsets sus tasas más altas. Las operaciones bursátiles regulares son 9,99, con operaciones de opciones que cuestan 9,99, más 0,75 por contrato. Todos los oficios son comisiones a tanto alzado, lo que significa que no hay trucos a tener en cuenta, y los comerciantes hiperactivos pueden obtener su tasa tan baja como 6,99 si hacen 1.500 transacciones más por trimestre. E TRADE se destaca de sus competidores con sus comisiones de fondos mutuos, que se ejecutan en 19,99 por comercio. Charles Schwab, Fidelity y TD Ameritrade cobran 76,00, 49,95 y 49,99, respectivamente. En cuanto a la selección total se refiere, el corredor ofrece un poco menos de 8.000 para elegir. Por último, he encontrado que E TRADE tiene una oferta de buena reputación de ETFs sin comisiones, una oferta que se ha convertido en la industria más popular en los últimos años. Si bien el corredor no coincide con Charles Schwab s más de 200 comisiones libres de ETF ofreciendo, todavía hay 118, que es el segundo más alto en la industria. E TRADE TD Ameritrade Fidelity Charles Schwab Comisión de Bolsa de Scottrade 9,99 9,99 7,95 8,95 7,00 Opciones Comisión de Base 9,99 9,99 7,95 8,95 7,00 Opciones por Comisión del Contrato 0,75 0,75 0,75 0,75 0,70 Comisión de Comercio de Fondos Mutuos 19,99 49,99 49,95 76,00 17,00 Comisiones de Corredor Honorarios 25,00 44.99 32.95 25.00 32.00 ETFs libres de comisiones 118 101 85 214 0 El sitio web de E TRADE es fácil de utilizar gracias a una nueva experiencia de navegación lanzada a finales de 2014 ya herramientas innovadoras como E TRADE 360, la función de arrastrar y soltar totalmente personalizable del corredor página principal. La nueva navegación está claramente impulsada por la comprensión de lo que los clientes utilizan más. Coloque el cursor sobre las cuentas y las opciones del submenú son Mis cuentas, Mover dinero, Mi perfil, Registros de cuentas de impuestos y Bancos. Para ayudar a los nuevos clientes a comenzar, E TRADE reveló un nuevo Centro de Bienvenida en 2015 y rediseñó su página de resumen de cuentas, Vista completa. La nueva Vista completa es una gran mejora con respecto a su predecesor, proporcionando a los clientes nuevos y actuales una visión general muy clara de sus cuentas individuales. Las tenencias de la cartera, las listas de vigilancia y las noticias están accesibles bajo un nuevo módulo de instantánea con pestañas. También he apreciado la ventana de alertas de la cuenta actualizada. Dado el tiempo, puedo ver la Vista completa deshaciendo el tablero de 360 como la página de inicio de sesión predeterminada por defecto. La experiencia no se detiene sólo en el sitio web de E TRADE. En octubre de 2014, el corredor lanzó una nueva aplicación para el navegador Google Chrome, que permite citas rápidas en tiempo real, monitoreo de cartera y negociación en cualquier lugar. Nuestras pruebas encontraron que la aplicación era una extensión perfecta de la experiencia del sitio web y una experiencia muy suave en general. Dicho esto, me encontré ignorando la aplicación del navegador en favor de acceder a la página web en lugar de hábitos son difíciles de romper. Una nota final: En 2015, E TRADE decidió retirar su barra de citas de pie de página en el sitio, algo que crecí para amar a lo largo de los años. La falta de uso entre los clientes se citó como la principal razón para la eliminación, sin embargo, la barra no estaba habilitada por defecto, y los clientes tenían que activarlo manualmente. Ahora, en lugar de poder ver las cotizaciones rápidas y permanecer en cualquier página, los clientes tienen que introducir el símbolo en la esquina superior derecha, que los transfiere a una página de cita formal. En este año s 2016 Broker Review, encontramos E TRADE s servicio al cliente mejorado en comparación con el año pasado sin embargo, fue ligeramente por encima del promedio de la industria. El servicio al cliente de la empresa s es muy bueno, pero no es ganar premio. El punto culminante para E TRADE en nuestra revisión 2016 era su ayuda de teléfono, que terminó 4to en general. El soporte de correo electrónico terminó en noveno lugar, y el chat en vivo 8vo. En nuestro 2014 Broker Review, el soporte por correo electrónico de E TRADE fue calificado 1. E TRADE terminó quinto en general cuando se tomaron en cuenta todas las pruebas de servicio al cliente, lo suficientemente bueno para un premio Best in Class, lo cual no es fácil. En 2014, E TRADE actualizó su sitio web para hacer visible su número de teléfono de soporte al cliente en cada página. En 2015, el corredor realizó mejoras en su nuevo cliente a bordo y en la plataforma E TRADE Pro. Los esfuerzos constantes han marcado y esperamos que E TRADE continúe subiendo las filas en 2016. Para ello, tendrán que mejorar los tiempos de respuesta tanto para el teléfono como para el correo electrónico, un área en la que los principales brokers sobresalen. Vea: Los mejores corredores para el servicio de atención al cliente. Realizar investigaciones sobre E TRADE es sencillo y fácil de usar. Después de obtener una cotización de Apple (AAPL), los clientes ven una breve descripción de las estadísticas clave junto con un mini gráfico de la acción actual, la configuración de alertas, los botones de compra y venta, los titulares, el análisis de precios de Trefis Research. , Y una caja que destaca algunos informes de investigación de analistas recientes. Los proveedores de reportes de investigación de terceros de E TRADE incluyen a Thomson Reuters, Standard sin embargo, comparado con sus competidores más cercanos, E TRADE no alcanza con Charles Schwab, Fidelity y TD Ameritrade, todos dan acceso a al menos seis. Para los inversores que valoran las recomendaciones de los analistas, E TRADE ofrece calificaciones de consenso de múltiples terceros y en 2015 agregó desgloses de analistas individuales. Desarrollado por TipRanks, los analistas individuales se clasifican, perfilan y su objetivo de precio medio consolidado se representa con estimaciones altas y bajas incluidas. Mientras que los objetivos de precio medio trazados eran limpios y útiles en general, encontré que los desgloses de Analistas Individuales debajo de ellos eran una distracción. Por ejemplo, Apple tenía 37 recomendaciones de analistas. De estos analistas, 23 (65) tenía por lo menos un ranking de cuatro estrellas TipRanks (cinco estrellas es el más alto) que me dejó preguntando, ¿Quién debe confiar en la opinión de más? Sin duda, sin embargo, las calificaciones necesitan un ajuste. Informes y análisis de análisis a un lado, me gustó especialmente la funcionalidad de gráficos, ya que podría hacer estallar el cuadro de gráfico en su propia ventana y luego ampliarlo para aprovechar al máximo mi monitor de 24 pulgadas. El ajuste de los ajustes y la adición de estudios junto con los datos de eventos de la empresa, tales como divisiones, dividendos, ganancias y operaciones con información privilegiada, fueron de gran ayuda. La característica destacada aquí fue la capacidad de mostrar la actividad de comercio después de las horas de trabajo, lo cual es excelente para usar durante la temporada de ganancias. Para los clientes que buscan simplemente seguir sus acciones y tenencias favoritas, E TRADE MarketCaster es la herramienta de corretaje en tiempo real de los corredores, que aparece como una nueva ventana al ser lanzada. MarketCaster es simple, fácil de usar, fácilmente personalizable, y me pareció una buena herramienta para dejar abierto durante todo el día para mantener un ojo en las posiciones o una lista de vigilancia personalizada. Para los clientes con muchas características, hay E TRADE Pro (basado en el escritorio). El acceso a E TRADE Pro requiere el estatus de Pro Elite, lo que significa hacer al menos 30 acciones o operaciones de opciones por trimestre o tener un saldo de cartera de 250.000. E TRADE Pro se puede acceder a 99 por mes, de lo contrario. En comparación, TD Ameritrade y Charles Schwab dan acceso completo a sus plataformas insignia sin restricciones, mientras que Fidelity y Scottrade también tienen requisitos. En la superficie, E TRADE Pro tiene todas las campanas y silbidos que un comerciante activo podría desear, con la funcionalidad de rejilla de presión para la personalización rápida y fácil. Pro soporta más de 20 herramientas, incluyendo la transmisión en vivo de CNBC TV, un escáner de estrategia en tiempo real, varias herramientas de opciones, gráficos avanzados, ventas en tiempo real y cotizaciones de nivel II, entre otras. Para ayudar a los nuevos usuarios a conocerse, en 2015 E TRADE lanzó una nueva experiencia completa de orientación al usuario, que incluye un tour, videos de ayuda y diseños sugeridos. Mientras que E TRADE Pro es impresionante, una profunda inmersión en sus características revela cómo la plataforma se queda atrás de sus competidores. En comparación con los líderes de la industria, E TRADE Pro carece de profundidad en dos áreas clave: la cartografía y las alertas funcionalidad. Con la cartografía, E TRADE Pro falta de herramientas y estudios técnicos es difícil de pasar por alto. Mientras contaba 10 nuevos estudios añadidos en 2015, E TRADE Pro todavía ofrece 47 en total, muy lejos de los 157, 166 y 337 ofrecidos por TradeStation, Fidelity y TD Ameritrade, respectivamente. Para las alertas, sólo se admiten las alertas básicas y no se pueden mostrar en los gráficos. Ver: Mejores corredores para herramientas de plataformas. En el lado positivo, estuve muy feliz de ver E TRADE Pro actualizar sus herramientas de opciones en 2015, actualizar los gráficos de opciones, ampliar el análisis de probabilidad de la opción y simplificar la entrada de órdenes. También lanzado en privado beta en 2015 fue una herramienta de Margin Analyzer nuevo. Encontré la funcionalidad proporcionada para ser fantástica, dando a los clientes exactamente lo que necesitan para monitorear, administrar y planificar los cambios de margen en sus portafolios. La herramienta salió de beta privada a finales de enero de 2016, y ha comenzado a extenderse a todos los clientes. Otra nota sobre el estatus de Pro Elite: Junto con el acceso gratuito a E TRADE Pro, Pro Elite también obtiene acceso al servicio de atención al cliente de Elite. Teniendo en cuenta la calidad del servicio al cliente regular ya es fuerte, encontré el estatus de Elite para ser de poco uso, menos en el día de negociación rara cuando el mercado está en desorden y los volúmenes de llamadas son excesivos. Como el primer corredor a empujar realmente el móvil, E TRADE continúa su dominio, acabando primero en general otra vez en nuestra graduación. En 2015, E TRADE lanzó su aplicación Apple Watch y siguió siendo la única agencia de corretaje que permite a los clientes comparar el rendimiento de su cartera con los promedios generales del mercado (un buen toque). E TRADE tenía un puñado de otras características que ofrecen otros pocos corredores: CNBC TV, cotizaciones de nivel II, selección de acciones personalizadas y calificaciones de terceros, entre otras. La única área en la que E TRADE realmente se queda atrás es la cartografía, donde sólo se apoyan dos indicadores. Mientras que sólo tener un puñado de indicadores técnicos / estudios disponibles para agregar a un gráfico es bastante estándar, esperaba más de E TRADE, teniendo en cuenta su liderazgo en la industria. Dejando de lado, con 48 variables evaluadas para el comercio móvil, E TRADE ganó 95 puntos totales posibles. El corredor es el número 1 en mi libro porque sus aplicaciones son fáciles de usar, confiable y rico en funciones. Junto con el comercio, E TRADE también ofrece servicios bancarios básicos, incluyendo cuentas corrientes sin cargos de cajero automático y tarjetas de débito. El corredor también proporciona 30 sucursales locales. Ver: Mejores corredores de servicios bancarios. E TRADE como marca ha tenido su parte justa de altibajos a lo largo de los años. El corredor se levantó para ser un líder en la industria en los 2000s tempranos, después el precio de acción tomó una paliza a lo largo de 2007 y 2008 como la cartera de la hipoteca del corredor s hizo tóxica. A pesar de estas luchas durante la peor crisis financiera en la historia de los Estados Unidos desde la gran depresión, la experiencia comercial de E TRADE se ha mantenido fuerte. El corredor se impuso y se convirtió en el líder indiscutible en el comercio móvil, que entonces era territorio inexplorado. Más recientemente, el movimiento lejos de los comerciales iconic del bebé tiene E TRADE que se centra en sus clientes de la base, tipo E. El corredor sigue siendo 1 en su oferta móvil, continúa innovando con nuevas ofertas como su renovado centro de jubilación y, en conjunto, ofrece una oferta maravillosamente bien redondeada para sus clientes. Si eres un comerciante activo, un nuevo inversor, o simplemente alguien que busca gestionar una cartera de jubilación, E TRADE es un agente fiable y de servicio completo que impresiona a todos los tipos de inversores y da a sus competidores una carrera por su dinero. Blain ha estado involucrado en los mercados durante más de 13 años, dirigiendo la investigación y las revisiones del corredor de la equidad de StockBrokers. Su blog personal, StockTrader, ofrece recopilaciones diarias del mercado a más de 17.000 suscriptores. Imágenes Todos los datos de precios se obtuvieron de un sitio web publicado en 2/16/2016 y se cree que es correcta, pero no está garantizada. El personal de StockBrokers está trabajando constantemente con sus representantes de broker en línea para obtener los últimos datos de precios. Si cree que los datos enumerados anteriormente son inexactos, comuníquese con nosotros mediante el enlace al final de esta página. Para los tipos de cambio de acciones, los precios anunciados son para un tamaño de pedido estándar de 500 acciones de acciones a un precio de 30 por acción. Para órdenes de opciones, puede aplicarse una tarifa reguladora de opciones por contrato. Riesgo de Largo Plazo / Recompensa Pérdida Máxima: Limitado a la prima pagada por adelantado por la opción. Ganancia Máxima: Ilimitada a medida que el mercado avanza. Características Cuándo utilizar: Cuando usted es optimista en la dirección del mercado y también alcista en la volatilidad del mercado. Una opción de la llamada larga es la manera más simple de beneficiar si usted cree que el mercado hará un movimiento al alza y es la opción más común entre los inversionistas de la primera vez. Siendo una opción larga de la llamada significa que usted beneficiará si los rallies comunes / futuros, sin embargo, su riesgo es limitado en la desventaja si el mercado hace una corrección. En el gráfico anterior puede ver que si el stock / futuro está por debajo del precio de ejercicio al vencimiento, su única pérdida será la prima pagada por la opción. Incluso si la acción entra en liquidación, nunca perderá más que la prima de opción que pagó inicialmente en la fecha de contratación. No sólo sus pérdidas serán limitadas en el lado negativo, usted todavía beneficiará infinito si las etapas del mercado una reunión fuerte. Una larga llamada tiene potencial de beneficio ilimitado en el lado positivo. Comentarios (201) Timatao 18 de mayo de 2015 a las 7:52 am Más información. El bloque grande negociado en .65 (creo que el precio de las acciones fue alrededor de 51 en el momento). La opción expiró apenas en el dinero. Creo que el cierre real fue 52.55. El mercado de accesorios fue el punto interesante cuando 999k se negociaron en 52,61. Así que el creador de mercado que vendió las llamadas debió las acciones al vencimiento. Normalmente el mercado secundario comercializa acciones 3-4k por lo que el bloque grande era inusual. El vendedor de las llamadas habría sido un creador de mercado seguro (estar en el preguntar cuándo ocurrió el comercio) y con un comercio tan grande habría sido cubierto con acciones en el momento Del comercio. Pero, independientemente de eso, la llamada estaba fuera del dinero en la fecha de vencimiento por lo que wouldn s delta se acercó a cero el creador del mercado sería la venta de acciones para mantener el delta neutral, así que quizás el último bloque era lo que había dejado para descargar Dificil de decir, Pero parece una suposición razonable. En el lado de la compra sin embargo. Veo que los beneficios salieron el 23 de abril. Las opciones parecían buenas por un tiempo después del lanzamiento - la acción pasó de 47.72 el 22 de abril a 51.51 (8) después del anuncio el 23 y luego 54.03 el 24. Difícil decir cuánto habrían hecho en la prima aunque como valor intrínseco de don s solo hace que la opción vale por lo menos 0.53 sin embargo. Otra razón para comprar las llamadas tan agresivamente alrededor de ese tiempo (además de la subida de precios esperada) podría ser recibir los dividendos. La ex-fecha anterior para DNKN fue el 5 de marzo (div de 0,265) con una fecha de pago del 18 de marzo. Tal vez compraron las llamadas antes de la ex-fecha para calificar para el dividendo, ejercieron las opciones para recibir la acción antes de la ex-fecha, esperaron a que la acción saltar y vender las acciones y aún recibió el dividendo en la fecha de pago Timatao 16 de mayo 2015 a las 3:51 pm Quería obtener su visión sobre la expiración de mayo en DNKN 53.5 opciones de llamada. Un jugador grande compró 16k contratos y pagó el precio de la pregunta un par de meses atrás. Creo que las acciones están infravaloradas, así que compré algunos de los mismos contratos y vendí unos 55 contra. La expiración fue interesante ya que todavía había 13k interés abierto en el último día. La acción negoció hasta 52.5 en el muy cercano y después en las horas después un bloque 999k negociado en 52.61. Did the seller of the calls not have the ability to cover and somebody covered his position at 52.61 This was such a large block I was wondering why somebody would do that if they wanted the stock and what is your opinion of what this could mean for price action going forward Dennis April 24th, 2015 at 2:56am The reason why you should not exercise ITM calls early (except in some cases prior to dividend) is you give up the interest value included in the price (I know, not very much nowadays with rates close to zero). Also, if you want to maintain your bullish/long position, by exercising you create more risk because you basically swap your 100 - delta call with stock. and because the stock will have a higher price than the call, you potentially lose more. If you do want to exercise your calls early, please check any residual time value/premium left. if there is any, it s better to sell. Peter November 3rd, 2014 at 5:28pm I re holding the stock through the ex-date to be eligible to receive the dividend. But if your call option is making a profit and currently ITM then I see nothing wrong with squaring it off by selling the same amount of contracts back to the market to realize the profit. If you were instead to exercise the option first, you would be utilizing more capital to take delivery of the stock position before selling the stock back to make the profit. SG November 1st, 2014 at 6:35pm Why is it said that premature exercise is not usually good If I am ITM, and current premium is 100 ( or a higher multiple of 100 ), would I not make money by selling the call Is that what one means by squaring off the position Peter October 29th, 2014 at 5:50pm Why sell it If you re only going to receive one cent for it you may as well hold onto it - you have another 3 months for the position to fatten in value. Plus, your brokerage costs for selling at one cent may actually be more than the value received by selling. If I were you I s too small value for selling considering the time there is left in the option. AVP have their earnings out before market open tomorrow too - let s see what happens after that. Warren October 29th, 2014 at 11:04am I have AVP 20 Jan 2015 calls which are worthless. How do I take the loss in 2014 (nearly 20,000) as there is no market for them even for .01 I use ETrade and they told me to just try selling each day at market. Considering the stock is now only 11, no one will be buying Peter October 24th, 2014 at 4:18pm It s a difficult question to answer as it depends on just how bullish you are and what the delta of the option is (i. e. how much the price of the option will change relative to changes in the underlying price). If the option is very close to expiration then an ATM option will be more attractive than an OTM option. However, if there is decent time to go then an OTM option will most likely provide the highest return on investment (premium paid) provided the underlying makes a decent move upwards. The best way to understand though is by simulating moves in the underlying and checking the theoretical imapact it has on the prices of the options. You can use my option pricing spreadsheet for this. Give it a go and let me know how you go and if you have any questions. rony October 22nd, 2014 at 6:06am Let t mind the risk. Which call option should I buy One that is exactly ATM One that is slightly OTM Peter September 29th, 2014 at 7:24pm Yes, I think selling ATM/OTM is preferable to selling another ITM call there would be little difference in selling a slightly higher/ITM call to simply exiting your existing ITM position. A long deep ITM call is like being long the stock. So you have to have a view on the direction on the stock if you are no longer bullish and think the stock might turn, then best exit your option position. If you are neutral to bullish, then the most appropriate strategy is to sell ATM/OTM calls on the back of your existing position for premium and profit limit. timitao September 29th, 2014 at 9:55am My thinking is with a decent long position and no intentions on taking delivery of shares due to capital constraints (basically a weak long position), selling some upside calls would help reduce risk while collecting additional premium. And while the goal would be to just flatten the position, if I wanted to take the position to the last day the volatility and wide Bid/Ask could be dangerous. I just wanted to make sure these would offset on settle as If the upside calls end up being in the money, trying to by back the higher priced calls while selling the deep in the money calls on the last day could be problematic. If the upside calls dont end up being in the money, I would just collect the premium. I would be interested in your view, as I think selling out of the money calls (that could end up in the money) on up days, against the deep in the money long position could be gradual way to reduce exposure to a sharp downfall. Peter September 24th, 2014 at 8:15pm Yep, you can do this. A long deep in the money call option will have a delta close to (if not equal) to 1. That means that the option behaves just like the underlying stock in terms of value change. So selling another call option with a higher strike price will be like a covered call on a long stock position. Just a question - why sell another in the money call If you want to lock in profits on your existing call option then you can just sell the same option back and close it out. If you sell an out of the money or in the money call you will still receive some premium and lock in a higher exit price if the market rallies. Timitao September 24th, 2014 at 11:40am If I own a long in deep in the money option can I sell a similary expiration dated call option at a higher price (still in the money) and let them both go to expiry ie in an example like Priceline where I wouldn t have the capital to cover 1000 shares, would selling the other call offset on expiry Peter August 1st, 2014 at 10:00pm The blue graph shows the payoff at the expiration date of the option while the pink line shows the theoretical P L of the position 60 days prior to the expiration date. As the time to expiration approaches the pink line moves closer to the blue line. Eresh August 1st, 2014 at 6:27pm Hi Peter, I don L 60 days curve. Could you explain please Peter June 22nd, 2014 at 9:50pm Hi K. N, it m not too sure either - let me investigate and come back on that one. K. N. June 19th, 2014 at 12:48am I have a quick question on the long duration of a call (or put) option. Assuming I buy a call for APPL, with strike price, say 200, expiration 7/2016, for 50c a contract. Then in July of year 2016, APPL price is 500 (hypothetically) and the option chain table only shows strike range from 400 to 600 with 10 dollars increment it doesn t even show a strike price of 200.. Are you still able to sell your call (or put) if it s not shown on the option chain table. How can you tell what is the asking/bidding price for your contract for that strike price I t know where to turn to to ask. ) Peter April 23rd, 2014 at 7:06am Sounds like your second order was taken out by a market maker - that is, their electronic trading system must have had an automatic sell level at around the price of your second buy order, so as soon as your price reached the market it was immediately and automatically taken out. Peter April 23rd, 2014 at 7:05am It depends on the bid/ask spread. If the options are liquid and the bid/ask spreads are tight, then yeah, I t going to mean much in the long run. steve April 21st, 2014 at 9:05pm hello peter, my question is similar to joey s..i have excercized two calls on a stock which is trading at 4.20..i bought june calls 3.00 w an ask price of 1.40..i bought 5 contracts each..i do not understand it asking for my limit price..originally i placed it at the 4.20 stock price but it stated that it had to be in .1 increments so i then used the ask price n it completed..on the second order i used a number .05 cheaper than the ask price n it cleared later i practiced w that limit number n it accepted right down to .10 i did notice that the price of the transaction was very small but declaring the limit price has me confused n want to understand it before i make anymore options trades.. thanks, steve Joey April 21st, 2014 at 11:28am I have question concerning two long call positions I m attempting to open. I normally Buy to Open, slightly in-the-money, at the Bid price. I am noticing that it takes time for my orders to leave the Open status and become active. Does this mean that my limit price set at Bid is too low What would you reccommend in this scenario Increase my limit closer to or at the ask price I missed the opportunity of gaining a few points because of my order not activating, I also run the risk of the order getting processed too late (before a reversal). Joey April 12th, 2014 at 12:21pm Thanks a bunch Peter you explained it perfectly. I seem to have a fairly succesful strategy in the making. I t see there being too many differences between the virtual and actual, but any advice you have will be welcomed. ) Take care, Joey Peter April 11th, 2014 at 5:20am Thanks for posting - although not sure I agree with genius though -) The amount you re seeing, which I assume is 4,400, is the total proceeds you will receive as a result of selling the options i. e. 5 x 8.80 x 100 (100 multiplier). The difference between this and your purchase proceeds will be your profit of 900. Also, this transaction is a closing trade - where you are reversing an existing position. This is different to the option. An exercise in your case (long puts) would be to deliver stock (sell shares) to the seller of the put option at the exercise price. Déjame saber si necesitas algo más. Joey April 10th, 2014 at 12:42pm Thanks for sharing your genius. I have a question on a PUT position that I am attempting to exercise. I Bought to Open 5 OEX PUTS and I am now in the money. When Selling to Close my preview screen shows that the transaction will cost me over 4,000. Thats more than my original opening transaction and way more then the 900 profit I m trying to realize. Could you explain what exactly is taking place Here is a copy/paste of that line item: Action Qty Symbol Desc Contract Size Price Duration All or None SellToClose 5 OEX AprWk4 820 Put S P100INDEX 100 Limit 8.80 DayOrder Off Peter March 4th, 2014 at 4:43am If your position in the option is profitable you can simple unwind the position by selling back in the market you don t have to exercise the option and sell the stock to profit. If it intrinsic value . Let me know if anything is not clear. Greg March 1st, 2014 at 11:05am Amazing site. Thank You A newbie question - If I buy a long call and the stock price goes up above the strike price is it true that I maximize my profit by simply letting the option expire assuming I have enough margin to buy the underlying stock Alternatively, I could sell the option moments before expiration. Would I then make a similar profit, minus a premium for not having to buy the stock If so, how big is that primium (controlling for volatility) Even if the price were guaranteed to remain the same between my sale of the option and its expiration, I must be paying for the luxury of not tieing up my capital in the stock, but how much Peter February 11th, 2014 at 3:35am You should look at Interactive Brokers. You can sell options naked provided your have enough capital to cover if exercised. Fred February 9th, 2014 at 11:24am Hi Peter, I positions Thanks again Peter July 16th, 2013 at 6:12am Yep, most likely. However, most brokers also provide leverage with your account - so even though your cash balance is not enough you ll be loaned the excess to cover your position. It does depend on the broker though so best to check with your broker or ask this before openning your account. Phil July 14th, 2013 at 2:36pm If I buy a call at strike price below current stock price (deep in the money), since I am very bullish. What if at the expiry day the price of stock is much higher that the strike price but not enough cash balance to exercise and then sell for profit. Will the broker automatically execute and deposit the profit in my account (since I do not have a margin account enough to support the purchase). Peter June 23rd, 2013 at 7:25pm That s right - your max loss with a long (purchased) option is limited to the premium paid. This is the same for both calls and puts. nick June 22nd, 2013 at 8:27am If you long (purchase) a call or put and let them expire is that how you limit your loss and just lose the premium I. E.- You buy a call or put option and before the expiration you are at a loss greater than your premium. I have the choice to let the option expire and I will only lose the priemium and not greater than premium Furthermore, if I am correct. Does this only apply to long call and puts as oppose to shorts Peter May 16th, 2013 at 7:51am Your position will be updated to reflect the change i. e. your number of contracts will be multiplied by 5 but the strike price will be divided by 5. So your effective position after the split has the same exposure as before the split. Chad May 15th, 2013 at 7:36pm What if I buy a call option for ABC 425 june 13 but the stock splits 5 for 1 Peter August 13th, 2012 at 7:51pm Sure, you can find the sheet here . AKIN August 13th, 2012 at 8:31am Please, can you provide excel sheet of the detail graph and how you arrived at the figures of the computation Jason May 1st, 2012 at 12:40pm Is it better to buy a long call at a lower strike price to benefit off the exercise or selling the call option or better to buy a long call with a higher price with a lower call option I know the risk is much less at a higher price but if you chose the lower strike and the stock doesn t move much you could exercise and hold the stock to sell on the market. Peter April 23rd, 2012 at 5:54pm Nice work on the puts Yes, sounds like you have closed the position by selling back the puts that you owned. Your brokerage statement should show a zero position for this contract now. Your calls are quite out of the money - so time decay will definitely start hurting your position with only a few weeks to go. AAPL -) Mike April 23rd, 2012 at 5:09pm I bought option contracts a few weeks ago on APPL, 695 May t own the stock. I sold (Sold to Close) the same Put contract this morning for a profit since the premium went from 9.60 to 18.00. Did I essentially close this position I think you answered it earlier in another person t have a risk if it actually gets in the money ( 545) since I closed the contract position by selling it, right I still own the 695 May 12 call, hoping that it takes off after earnings and I can make a profit. Obviously, time is not on my side, so I should prob look to get out at a certain price and time. I was thinking if it trades sideways up/down with not much change in two weeks, I might be better off just taking a loss and not risk losing the whole premium Thanks for the great site Mike Peter April 22nd, 2012 at 7:39pm Yes, the implied volatility is a lot higher than where it was a month ago - over 50 higher for the puts. The calls are also higher so the market is indicating that this week will be a volatile one. I re both showing signs of strength. Lorenzo April 20th, 2012 at 12:23pm Noticing something a little unusual. I have come to like to s reporting earnings or not) when the put prices are so inflated as compared to the prior comparable weeks Thanks Peter April 9th, 2012 at 6:02pm The reason that there are often two strikes listed in the same expiration month is because of Weekly Options. Weekly Options are options that are listed on the Monday and expire on the Friday of the same week. You can tell by date, which is part of the ticker you pasted AAPL120413 - the first part of the ticker is the stock code followed by the expiration date, which is 13th April 2012 (120413 - YYMMDD). Peter April 9th, 2012 at 5:52pm Nice trade DoSSlar Congrats Curtis April 9th, 2012 at 10:11am Hi Peter, Great advice on this site. I have a question about the following identifications. Both of these are for a buy to open call 650 strike price. The first one was selling for 3.29 and the second for 7.55. Why the price difference for contracts that are for the same strike price AAPL120413C00650000 AAPL120421C00650000 DoSSlar April 4th, 2012 at 9:43pm Peter, I cannot thank-you for the basic confidence you have provided me with simplistic approach to a common person on the option, let me share the good news on my first 3 long bullish single option calls, i made on AAPL all three of them after closing gave me a net profit of average 250 , i could have held it a little longer and closed it on the March/April calls, looking at the recent increase in the volatility I decided to let it go i. e . I still feel my other options would be ok. Peter March 26th, 2012 at 9:04pm Great trade, congrats Yeah, it s really hard to advise as the decision to exit or continue is really up to you. Sure, there will be some time decay especially if the option is out-of-the-money and close to the expiration date. So, if you are happy with the profit so far then it might be a good idea to exit and then either buy another call further out or look for another opportunity. Peter March 26th, 2012 at 7:35pm If the option is physical settled, which American stock options generally are then when the call option expires and it is in-the-money, the position will be automatically exercised and converted into a stock position. That means that you will see a long stock position with a price equal to the strike price of the option. Peter March 26th, 2012 at 6:56pm Apologies for the late response - I was traveling with work. Seems like a great trade there When to get out is entirely a risk/reward decision best left up to the trader, which will be determined by your view of the market. If you think the stock still has legs then sure, hang onto them. But remember also that the more in-the-money a call option is the closer its delta is to 1 and therefore it will move in price in the same proportion as a stock. So, holding an in-the-money option is just like holding the stock outright. I d be pretty happy with a profit like that though SS March 21st, 2012 at 9:46pm I am new to options but am finding it to be very interesting. Mi pregunta. On 3/15 GMCR was trading at 51 and I bought Apr 55 calls at 1.80. Today the stock went steeply up and so did the call option - at one point went up as high as 5.22 and now ended the day at 3.55. I believe GMCR has more upside until Apr 21 and could well be close to 60 with the big move today. Should I simply continue to hold onto the calls or would it have been better for me to have simply sold today in the high 4s. I am mainly concerned that the time decay may erode the value of the option faster than the appreciation in stock price and am unsure how to factor this in a simple manner. Thanks again for your wonderful opinions. edna March 14th, 2012 at 4:09pm I or just let the contract expire. Could you please explain what happens with an in the money call option when you let it expire. Thanks Chris March 14th, 2012 at 3:12pm Hi Peter, I bought my first call option in January. I sold my Apple shares at 510 and purchased the equivalent May 15 550 calls at 13. These are now worth 54 but I still have two months left and I don t want to take possession of the shares. How do I know when to sell I assume if I wait to just a few days before May 15, I will lose some premium. My thinking is to let it run till about 3 weeks before expiry, then sell to close. What do you think Peter March 11th, 2012 at 7:24pm If you own the call option you don or assigned. If you bought the call option for 0.10 then your risk is limited to the amount paid, which is 10 (0.10 x 100). HK March 6th, 2012 at 12:55pm OK, so this may sound stupid but I want to know the risk of owning a call option. Assuming I buy a call option at .10, and 2 months later that call option is trading at .25 and I want to sell my call option. Then, would I be obligated to sell the underlying stock if the purchaser of the .25 decides to exercise Peter March 5th, 2012 at 5:56am The market maker doesn s their business to make money providing two way markets. They have a theoretical edge in buying the option and hedging it with the stock. If you don t have enough money in your account to cover an exercise your broker will probably borrow the stock for you and then sell it back immediately at the current market price. Marc March 2nd, 2012 at 3:33am Does the market maker have to buy the options back before or on the strike date Say I buy an 11 call option in the money for 3.60 on a march 17 option when its march 2nd. The stock is trading at 14.90 when I buy it. The stock now rallies and goes to 15.50. is my option now worth 4.50 and who t cover that amount What if I have 10 contracts. Will I have to buy 11000 worth of shares if I cant find a buyer for the option to keep from just watching the options expire and losing my 3600. (10 contract at 3.60 ea.) How does that part work. All these training videos talk about what a call t merit using all the calls and puts he has sold on the strike date Peter March 1st, 2012 at 4:40pm Hi Zach, yes, you re example is correct Peter March 1st, 2012 at 4:39pm I appreciate the feedback D0SSlar Zach March 1st, 2012 at 4:01pm I know you probably answer this many times and reading things I seem to have an understanding but option trading seems really profitable and that usually means to good to be true for me. Lets say I want to buy 5 contracts of XYZ at 1.10 option price. I would pay a premium of 550. Now lets say that the option price increases to 2 the next day. I could then sell my options and make a profit of 450 over the premium 2 x 5 contracts 1000- 550 for premium correct D0SSlar March 1st, 2012 at 1:09am Peter, MY sincere thankyou for the excellent explanation for newbie in option trading. The most important learning i got from you that is the difference between (Strike price) for the stock. A barometer gauge the pulse of the underlying stock option price. Bottomline once the trader buys the option contract, the from a technical perspective. Newbz February 29th, 2012 at 8:10pm Thanks for the help, Peter. Options trading looks like a good fit for someone like me who has a small amount of risk capital but still wants to invest. I want to get as much info about options as possible. Peter February 29th, 2012 at 6:39pm Correct, the new buyer of the option will exercise his/her contract against another participant who is short the option. Yes, the long/short terminology applies to both call and put options. Newbz February 29th, 2012 at 5:54pm If I understand you correctly is this what you re basically saying: 1) I buy an Options Contract for 100 2) The value of the contract goes up to 110 3) I sell the contract and make a 10 profit. 4) The new owner of the contract exercises the position and I m not the one covering it. Does this scenario apply to both Call and Put options I ) Peter February 29th, 2012 at 4:06pm Hi Newbz, if you buy and then sell the same option then you no longer have a and hence cannot have your option exercised. You can only be exercised when you have a short position in an option i. e. you ve sold the option without first holding the contract. Newbz February 29th, 2012 at 3:23pm This is going to sound like a dumb question, but I can t get a clear answer on it: If I buy an option then sell the option, does that mean I have to cover the option if the new owner exercises it or does the one who originally wrote the contract cover it Peter February 28th, 2012 at 6:48pm Congrats on your first trade Brian How did it go. did you make some money Peter February 28th, 2012 at 6:46pm The options that are deeper in the money will have higher premiums than the options closer to the current trading price, so I would be inclined to sell those first. Unless you have expectations that the stock will trade higher, then you might want to consider holding and selling later. Brian February 28th, 2012 at 1:59pm Sorry for the confused question earlier, I figured it out. A bit of jitters as this was my first Options trade. Thanks Sam February 28th, 2012 at 11:19am Peter, If I have two call options under my employee stock option plan each with same expiration date but different strike prices, which one of these do I sell first (assuming I want to sell before expiration). All of these are in the money. Do I sell the one deeper in the money with lower premiums or the one closer to the trading price with higher premiums Note that this is company stock option grants and there is no up front capital. My guess would be the one closer to the current trading price of the stock as those have higher premiums. Just wanted to confirm. Thanks, Sam. Brian February 28th, 2012 at 8:51am Your site and comments are some of the most useful I have found online, so thanks for that. I have a question regarding a call option position I would like to close. It appears that I could sell with the stock under the strike price, but make 3 per share on the premium. Would it not be better to sell for the premium versus hoping that it surpasses the strike by enough to match that gain Peter February 26th, 2012 at 4:26pm 1) Don t worry about the volume - if the price is right, there will always be a buyer. If you must get out of the position, at worst you can enter an order to sell at below intrinsic value where you will for sure find buyers. 2) The market price of the call is dependent on two main values: intrinsic value and extrinsic value. Es decir. the price of the stock now and the expected volatility of the stock until the expiration date. RJay February 25th, 2012 at 10:16am Question: I bought 2 calls 2.80. The call is for a 31 strike price in July (its at 32 right now), I see there are only 13 contracts under volume (2 of them are mine). 1) With such low volume, is it guaranteed I ll be able to sell my calls 2) With such low volume, whats driving the price of the call I am speculating the stock will rise at least to 35- 37 by July. Peter February 22nd, 2012 at 5:48pm First answer: If you sell the option (i. e. close the option position) then your profit will be the difference between the price (premium) you sold the option minus the price you paid for the option. Let s say that when the stock was trading at 530 like you describe that the option is trading at 55. If you sell back the option then your profit will be 55 - 37.65. You are confusing the option and closing out the position prior to expiration. If you were to exercise the option (i. e. convert the option to stock), then yes your profit will be 530 (market price of stock now) - 515 (price that you took delivery of the stock for) - 37.65 (premium initially paid for the option). Second answer: Same as above - if you sell the option back instead of exercising it for stock you make/lose only on the transaction of the option - not the stock. I would say that if you are very bullish on a stock then you are better placed to buy deep out-of-the-money call options as the gains are greater if the stock does reach the levels anticipated. Avísame si algo no está claro. Curtis February 22nd, 2012 at 11:54am Hi Pete, First thanks for offering some great advice on here. I have recently become interested in buying call options but I am still a little unsure about several things. First example: ABC trading at 510. I can buy a 515 strike price call option for 37.65/share for july 21, 2012. Say by july 1st stock is trading at 530. Now when I sell my option before the expiration date I will make money on the 515 and 530 difference ( 15 per share). But I assume the strike price will be less due to time decay, so I would lose money on this. Correct me if I m wrong. Second example: ABC trading at 510. I can buy a 500 call option for 47.05/share for july 21, 2012. Say by july 1st stock is trading at 530. Now when I sell my option before the expiration date I will make money on the 500 and 530 difference ( 30 per share). Plus any increase in the call option price. It seems to me that if you are very bullish that a stock will climb you would be better to buy a stock where the strike price is below the current trading price. Any thought would be appreciated. Thanks Peter February 5th, 2012 at 11:45pm I think it depends on your broker and if you can buy the stock on margin. But you can surely sell to close prior to exit the position and still profit from the increase in the options price. Peter February 5th, 2012 at 11:43pm Yep, you -) Mike February 5th, 2012 at 11:43pm If I don t have sufficient funds for buying the stock on expiration date(say, to buy 100 GOOG) for call option. does the only option I have is to sell to close or i can exercise the call and gain profit without actually buying it on the expiration date Mike February 5th, 2012 at 11:39pm I have a call option which expires on 18th Feb. Can i sell to close this option on 18th (since i am hoping the stock to go up on 18th itself) or i have to sell(to close) before 17th end of day. Peter February 5th, 2012 at 4:36pm You don t do anything you will automatically be assigned the stock by your broker during the clearing process. So, the next day you will have a long position in the stock in your statement. Mark February 4th, 2012 at 12:36am Hi Peter. Fantastic site I commend your great advice. Question: buying 50 contracts .08 for a Feb 18 expiration long call on a stock trading 8.25. The strike price is 9.00. I am very bullish on this stock, but brand new to option trading. Do I have to sell the option, (or exercise) before the expiration date even if the stock is trading above the strike price on the exp day Hope this isn t too dumb of a question Peter February 2nd, 2012 at 5:34pm IA February 2nd, 2012 at 4:47am 3 years worth of authentic and valuable Q A. Fantastic work Peter. We can always do with more active market participants in the Options space. Very impressed. Peter January 31st, 2012 at 4:33pm Yes, you can sell the option back in the market. The profit depends on the multiplier, however, if it is call option on a US stock then the multiplier will be 100. So your profit will be 1,000 per contract ((30 - 20) 100). Rosy January 31st, 2012 at 12:57pm I have bought a call option for feb 13 for a price of 20 on 10th feb. After few days i. e, on 17th the value of that option has increased from 20 to 30. Can I sell my call option at price 30 How much profit I will earn if we exclude the brokrage. Peter January 20th, 2012 at 10:07pm Hi Joules, it depends what your objectives are and your view of the stock. If you think the stock has a lot of potential and can rally, say, 20 in the next 60 days then you would be more inclined to look at a strike 10 to 20 out of the money as the price increase on the out of the money calls will be more percentage wise than the in the money options. Joules January 19th, 2012 at 11:44pm When determining what strike price you want to buy on a call, in your opinion is it best to buy a strike say 50-60 days out that is already in the money. o. should you buy a strike out of the money and hope for the stock to move up to the strike before expiration Is there a way analyze the best strike for the money Peter January 19th, 2012 at 3:48pm Hi Tim, yes, you can close out your long position by simply selling back the same amount of option contracts to the market. Then your position will be flat and therefore there won t be anything to exercise or be exercised against. Tim January 19th, 2012 at 2:37pm Good afternoon. I recently purchased out of the money purchased put options with an expiration in 30 days. Say the value of the stock is not trading below the strike price (but it s close) within a few days of expiration. Assume the bid-ask premium is higher than when I purchased. Can I close the position without exercising and profit from the spread between initial premium and current premium If so, would I be liable as a written put if the stock falls below the strike price Peter January 8th, 2012 at 10:23pm Hi Chintan, please have a look at the page on option types . Chintan Doshi January 6th, 2012 at 5:07am Please explain me once again the Full Infomation Of Call And PUT Option Peter December 29th, 2011 at 10:14pm It looks like you re trying to enter a covered call strategy, which is buying the stock and at the same time selling a 11 strike call option So, you re currently long the stock and want to buy a call option on top of this Tyler December 29th, 2011 at 8:42pm I am on td ameritrade trying to do a call option and I am not sure I have it right. I am long on MTW and feel it will rise above the 11.0 strike price. It is currently trading at around 9 Trying to buy MTW Jan 21 2012 11.0 call On the website it has two orders in place after I put in the order: 1.). Buy 100 MTW 2.). sell to open 1 MTW Jan 21 2012 11.0 call Am I positioned the way I would like to be The premium is .1. Thanks,, Denis December 27th, 2011 at 11:35pm I have a position in long calls that is worthless right now. There are no bids for it and I cannot sell it even though I have a pending order for 0.01. Market depth is clearly showing no bids. Is this a good proof that the option is worthless so I can claim loss for tax purposes in the current year The options only expire next year. Peter December 27th, 2011 at 6:40pm With such a large stock increase the option will likely be deep in the money and have a large delta (approaching 1). This means that the options value will change almost exactly in line with the stock. So, whether to sell now or not depends on your view of the market. At this point the position in the option will just be like having the position in the stock. If it were me, I would probably sell and capture the gains so far and move onto the next opportunity. Up to you though -) jayne b December 27th, 2011 at 4:42pm Hi Peter, I s the deal: For Jan 12 expiration: Bought 500 shares of XYZ for 11 a share. The option price is now 25 a share. Clearly I s only one possible scenario.) Thanks so much for your advice. Peter December 21st, 2011 at 10:34pm Then best to just allow them to expire as you ll incur additional transaction costs if you sell. Peter December 21st, 2011 at 10:33pm You will have to buy the stock at the strike price, which is 20, so you d be up for an additional 2,000. Rebecca December 21st, 2011 at 10:09pm I currently hold January 2012 call options that are worth pretty much nothing (I bought them for much more and unfortunately lost money on them). My question is whether it is better to sell the options now or to let them expire Is there a difference There ll go up in value between now and January. Srikanth December 21st, 2011 at 8:03pm Could you Please clarify me one thing. I am going for Long call on XYZ stock JAN 2013 contract 20.0 ( BID:11.15 ASK:12:50) For that I have to pay 12.50 100 1250 (This is the amount i am paying now) to enter into option contract During expiry time. i. e JAN 2013. If i want to buy the shares . As I already paid 1250,Then How much I have to pay for buying the 100 shares Is it 20 100 2000 or 2000-1250 750 Peter December 11th, 2011 at 5:38pm Hi Stuart, thanks for the comments about the site, much appreciated Your decision will depend on your confidence with the stock and what your investment objectives are. If you like trading options and enjoy the leverage on your investment then you might want to sell the options, take the profit and move onto another trade. However, you might really like the stock and consider holding it as part of a longer term plan for your portfolio. If this is the case, then you could exercise and take delivery. But, remember that you will need to invest a lot more money if you exercise the options and take delivery - 49,500 (45 x 100 x 11). If you don t exercise you will have 50k to use with other option trading opportunities - or to spread out and buy more stock with. Stuart December 11th, 2011 at 10:23am Hello Peter, Let me first say you are the first person on this topic who like a great teacher can take complex subject matter and break it down so the plebes can grasp it. Then with a sound base camp you help provide, climb the complex mountain of options trading on our own. My question is: I bought 45 contracts long calls with 11 strike price six weeks ago out of the money and with lady luck by my side the co. declared to renew its dividend. So, I m in the money and am very bullish on this stock. Is it prudent to roll over the contract, ( and at what strike price, I feel 13 is in the cross hairs ) or allow the contract to expire, take on the shares, and ride it, hopefully up Peter November 9th, 2011 at 7:05pm 1) As you said, your broker may provide the margin for you to buy the stock or you can borrow more money. You cannot transfer your position though. The better choice would be to simply close out your option position by selling the option back on the expiration date. 2) The premium is the amount that you paid when you first put on the trade. You don t get this money back as this is paid to the seller of the option. If you exercise the option you will buy the stock with the price paid being the strike price. David November 7th, 2011 at 6:51pm 1) If I want to exercise a call option and I don but I needed to get the 50 of the initial funds. 2) If I exercise the option, what happens to the premium I paid Is the premium part of the strike price or is it extra. Meaning, do I pay the premium the strike price or do I just pay the strike price, which includes the premium I paid Peter November 2nd, 2011 at 4:58pm What was the stock price before and what was the change in the option price The decision really depends on your view of the stock - if you think there is more upside potential, then you re happy with the profit achieved already then take it. aa November 1st, 2011 at 9:49am A call option contract (American option) from september 10 to october 10 with premium 5 per contract. the stock price goes up to 78.what should u do (for each american and european option) explain Peter October 14th, 2011 at 6:39am Yep - you can close out the long position by selling the option and take the profits of the higher sold price. The downside to trading options this way if you are bullish on a stock is the time factor: that the stock must increase - and increase enough - before the expiration date for the option to be profitable. Otherwise you will lose your entire premium investment that you paid when you bought the option initially. When you buy stocks outright you have time on your side that the price will rise in the future to profit. Roshan October 14th, 2011 at 5:00am Thank you Peter I wasn higher price and pocket the difference in premiums as a profit Please correct me if I am wrong. Also I wonder why do so many people waste time and money by buying stocks and holding onto them for months and years to realize profit, when they can make huge profit with options sometimes even 100 in a weeks time. Peter October 14th, 2011 at 4:03am Hi Roshan, you can profit by the increase in the option price by simply selling the back the option in the option market (closing out your option position). If you exercise the option you will be assigned the stock, which means you will have to have enough capital to take delivery of the stock. And then you will have to sell the stock at the current price to take profits. Es decir. the better alternative is to just close out your long call position and make the 50 increase in premium. Roshan October 14th, 2011 at 1:46am Hi Peter, 1 quick question. stock A market price 90 call option: A100 trading at a premium 5 now 10 days to expiry Stock A reaches 98(still not hit the strike price) but trading at a premium 7.5 can I exercise my option and profit from the 50 increase in the premium Peter October 10th, 2011 at 7:23pm Yes, you can sell (close out) the long call option before the expiration date. You will receive money by doing this, which will offset the cost you paid when buying the option. So, you paid 5 to buy the option and then received 4 when you sold it back - resulting in a loss of 1. Annu October 10th, 2011 at 2:46pm If I buy a call option at 5 and it is trading at 4 but before expiry date. If I sell the option at 4 so I would get premium back or not. Jonathan September 29th, 2011 at 7:51pm That t sure about, thank you very much for clearing it up. Peter September 29th, 2011 at 12:21am I think the part that you are confused about is the selling of an option for which you already have a position in. If you buy 1 option contract then you have a long position. If you sell the same contract then you have zero position i. e. nobody can exercise against you. If you sell an option first, without previously having a position, then you will have a short position - or be short an option. It is only when you are short an option can you be exercised against. In your example, you ve had a long position but sold to close the position - therefore you cannot be exercised against as you no longer have a position. Does that make sense Or have I confused you -) Jonathan September 28th, 2011 at 9:37pm I was wondering if you could help me with the following question. I know that options that expire in the money are automatically exercised at expiration. So if you hold a call option in the money, you have a choice: exercise before expiry, sell the option, or let it expire and it automatically gets exercised. I s say the option is worth 5. If I let it expire, I automatically purchase RIMM at 30 - at which point I can sell it at 36 for a profit of 6/share. If I choose to sell the option, I profit 5-1.50 for 3.50/share. But if someone else buys my 30 call for 5 when the stock is trading at 36, there is a very good chance it will be exercised - which means I would have to buy the stock at 36 and sell it to that person for 30, for a loss of 6/share. So although I profited 3.50/share on the option sale, I come out behind when the option gets exercised against me. So why would I take that risk Or am I missing something here Peter September 9th, 2011 at 7:57am Thanks Michael, I am affiliated with Option Sizzle and will let them know about the error, thanks for pointing it out Peter. Michael T September 9th, 2011 at 3:48am Just an FYI - When I went to the the home page of the site you (Peter) suggested for option ideas (optionsizzle ) I got a message from my antivirus software that it blocked an exploit. Meaning the site was trying to do something it shouldn t be. If you are affiliated with the site, you should let them know. If it s a legit site, then they should investigate the error. BTW - I a. Peter August 31st, 2011 at 7:03pm No, you don s a good question. If you are still holding the call option after the stock has been taken over then you can sell out of the option to close the position and your profit will be the difference between the sold price and the purchase price. With the prices you mentioned the call would be worth at least 7,800 per contract ( (150 - 72) 100). If you paid .25 and sold it for 78, then your profit would be 1,555,000 ( (78 - .25) 100 200). Alternatively, you could choose to exercise the option, which means you would have to buy 20,000 shares at the strike price. If the strike price was 72 then you would need 1,440,000 in capital to cover the exercise. Then you would sell the shares at the market price to make your profit. Your existing option position would be sold at zero and the price paid initially has already been received by the option seller. Hope this makes sense - let me know if anything is unclear. Rah August 31st, 2011 at 12:13pm I I bought call options 200 contracts for 25 per contract or .25 per share 20,000 shares betting that the stock will be bought out. Strike price is 125 for sept calls. Current price is 72. If the company is bought out next week and the stock goes to 150 do I make the value of the call plus 30 for every share I am holding which would be 600K plus Peter August 29th, 2011 at 9:44pm You ll be buying the stock at 13 - the strike price. Tom August 29th, 2011 at 8:09pm I had one more (probably silly) question. If I buy a call option of stock XYZ (trading at 10) with a strike price of 13 (say expiring in 120 days), and this stock hits 14 before it expires, and I decide to execute, am I able to buy the stock at 10 (the price at which I bought the call contract) or at 13 (the strike price) Thanks for your help Peter August 25th, 2011 at 7:33pm Option premiums generally decrease the further they are out of the money. Hence, the cheaper they are to buy. So, your percentage returns are magnified upon a large move. However, the rate of change (i. e. option delta) is lower for out of the money options. If the market does move, out of the money options will not change as fast as in/at the money options. The decision as to what call option to buy comes down to just how bullish you are on the stock. If your view is only slightly bullish then you would be best off buying an at the money option, however, if you expected the stock to stage a massive rally then you would be better off picking an option in line with the expected price of the stock post rally. Call options the are in the money (strike price below the stock price) have higher deltas and therefore their prices move more in line with the stock that it is based on. This means that you can take advantage of an upward move in the stock at the same rate as if you owned the stock without making the full purchase. In your example, buying a 4 strike call option on a stock that is trading at 7 would be worth at least 3 in premium, let s price changes are likely to move in line with the stock. If you were to buy the stock outright this same position would cost you 700. Tom August 25th, 2011 at 2:39pm Can you please explain to me 2 things. 1)If i am bullish on xyz trading at say 7. I can buy contracts at strike prices of 8, 9, 10, 11 etc. Obviously the lower strike prices carry less risk and should be closer to realization. But how does one choose which to pick - especially since I can trade an option w/o exercsing it, and hence it really doesn t have to hit the strike price. Is there more upside to a further out strike price Even more confusing for me is, why are there contracts for calls below the market price Why can I purchase a strike price of 4 when a stock is at 7 (i mean this is no put contract)Does that mean I could exercise the option anytime (it already hit the strike price since its below the actual value) if for a example a stock got upgraded. Is this this supposed to be some hedge in case the stock looses value Milton August 24th, 2011 at 10:37pm Peter. Buena cosa. Nat. get some flash cards Peter August 7th, 2011 at 7:51pm Yes - provided that the buyer has a position. Nat August 7th, 2011 at 7:32pm Thank you very much for your explanation. This means that if I sell my call option to someone to close the position and reap my profit or cut my loss, the person who bought it from me will be guaranteed to buy his share from my original seller, right (if my original seller has not closed out his position) Peter August 7th, 2011 at 6:42pm It re welcome to ask questions. Think of an option position the same way that you would a stock. Say you buy 100 shares of stock and then you go and sell 100 shares of stock. After the sale of stock, you no longer have any shares left - your long position of 100 shares has been by the sale of 100 shares. I think the confusion you have is that you are imagining a market where there are only a few players - you, a buyer and a seller, where each is trading around the same allotment of contracts. But in practice the markets are full of buyers and sellers and the process (called novation) of allocating the contracts and positions of each participant is handled by the clearing houses. Nat August 7th, 2011 at 9:16am I am pretty much clear on the second question. However, for the first one, then what would happen to the buyer of my call option Who will be obliged to pay him the 10 at the end of the expiry date Thank you again and sorry bugging you. I am kind of new to all of this and the only part I don t get it is offsetting the position. If you would be so kind to provide a numerical example of how offsetting a position works, I would really appreciate it. Peter August 7th, 2011 at 8:45am With your first question I was thinking you were describing something like this Bought 1 10 strike call option then Sold 1 10 strike call option Now, because you Bought 1 10 strike call option and then Sold 2 10 strike call options In this case, because you are now selling more contracts then you are holding you would net be short 1 10 strike call option. And yes, for your second question, if you had of sold the call option instead and the stock ended up at 11 then you would have made the 1 profit instead of the loss. Nat August 7th, 2011 at 8:00am Thank you so much for your quick response. I just have a couple more questions if you could kindly clarify it for me. According to my first question, I don t understand why I will no longer have an option position if I sell my call option because I have turned into the seller of the call option. Won t I have the obligation to sell the share to the person whom I sold the call option as the seller Secondly, in the second case where I would have made a loss of 1, would it have been better if I had sold my call option contract because it would have been worth a little more since the price of the share is higher to offset the position instead of exercising it Peter August 7th, 2011 at 7:42am For your first question, if you offset the bought option by selling the same option in the same quantity then you no longer have an option position. You would only have to worry about the option being exercised if you were an option - i. e. selling an option without first buying an option. And yes for your second question - you will make a 1 loss if the stock is only at 11 at the expiration date. Nat August 6th, 2011 at 8:27am If I bought a call option contract at 2 for a strike price of 10 but the price of the underlying stock is rising to 20 and the premium increases to 4. I want to offset the position by selling it to obtain a 2 profit before the expiry date. Then after that, as the seller of the call option, will I be obliged to sell the share for 10 before the expiry date of that contract to the person I sell the call option to Do I have to place a margin in the broker s account as a seller of the call option Another question is if I buy the call option contract at 2 for a strike price of 10. But the price of the underlying stock rises to 11 at the expiry date and I exercise it. I will actually have bought it for 12 (strike price premium and not including commission paid to broker for buying the contract and exercising the option plus taxes) which means that although the price of the stock has risen, I have made a loss of at least 1 Thank you for your time. Peter June 4th, 2011 at 6:43am 1 re interested in. Are you looking at US companies If so, check the CME site. 3 - No, listed options are standardized by the exchange so once they expire you cannot change it. You can, however, roll your position from one month to the next if you want to maintain the option. 4 - If the option has expired out-of-the-money then nothing happens at expiry - you just lose the premium paid. Konstantin June 3rd, 2011 at 9:47pm I have a couple question very simple. 1-Can I Buy/Sell options stocks of micro-company (price around .3 /share) 2-Is only specific company trade option or all of them 3-Can you extend your expiration date 4-If the expiration date is not finished yet, but in reality I make a loss of 100 . my option will be sold automatically Bdw, great website, simple and very clear Peter May 31st, 2011 at 8:04am Hi RK, the P L graph represents the time value of the option. It plots the theoretical profit and loss now with an option that expires in 60 days. RK May 31st, 2011 at 2:45am What is P L in graph Could you please explain the graph in detail Peter May 11th, 2011 at 6:42pm The option will never be de-listed before expiry - as it is likely other traders will have open positions in these contracts. If the stock price has dropped significantly the call option will simply be considered worthless by the market. When this happens, you will probably notice that there will be no market bid for these contracts but there may be offers to sell the option at very low prices. LMer May 11th, 2011 at 6:19pm I am curious. If I buy an out-of the-money long call for .80 that expires in Nov. or Dec. and it drops to N/A is it still a valid contract that will when the stock value rises Can it be delisted and just dissapear Manan May 6th, 2011 at 3:02pm Peter April 28th, 2011 at 11:41pm Hi Manan, you won t have to do anything - the assignment of the stock due to the exercising of the short call option is handled automatically by your broker/clearer. You will just keep the premium and have zero position in the stock. Manan April 28th, 2011 at 3:25pm Peter, I have a question: I own the ABC at 25.00 and I sold the in-the-money one call option for May 21, 2011 for 1.4 and earned a premium of 140. Assume it will be traidng at 28.00 by May 21, what will I have to do, apart from selling my stock at 25 Is there anything that I need to do Reply will be appreciated. Thanks Peter April 17th, 2011 at 6:06pm Almost - intrinsic and extrinsic value are terms that relate to the market price of the option when compared its strike and underlying price. The graph above doesn t look at the market price of the option - the blue line simply represents your profit and loss of buying the option. Ashutosh April 17th, 2011 at 10:40am Thanks Peter, Thanks for the prompt reply. Actually I was confused but a bit later when I went through the whole site I got it before your post here. Actually you have posted everything in nice and short manner. I really appreciate your work on this. In above scenario. long call, when it s ITM then the (strike price)line below x axis would be. Intrinsic Time value(premium paid). m i right Please correct me if I am wrong. Thanks in advance Peter April 17th, 2011 at 6:10am Hi Ashutosh, the -1 line beneath indicates the loss of the option while the stock price remains below the strike price. For a long call option this value is the price you pay for the option - as this is the maximum you can lose with this position. The -1 in the graph is just an example but would otherwise equal the price you have paid for the option. Ashutosh April 16th, 2011 at 1:49pm Peter, Nice, Elaborate info On Options. One query, I couldn t understand the graph. As here in Long Call, On Y-Axis. -2 to 5 On X-Axis. 20 to 30 I don understand why The Call has started from -1. Por favor aclare. Peter April 13th, 2011 at 8:28pm Hi Maria, you could try Option Sizzle they have a subscription service where they provide short term option trade ideas. maria April 13th, 2011 at 3:46pm Peter-Is there any site you use that would list good value option bets i. e--where the options don t cost that much per contract and the call/ underlying stock has a good probability of increasing in value Peter April 10th, 2011 at 8:35pm The payoff for a long call option is max(0, Stock - Strike). The cash flow when you short an option is simply the premium received when the trade is established. Wade April 10th, 2011 at 8:21pm How do you get the cash flow of exercising the long call is St-X and the cash flow of exercising the short call is -(St - X) Could u explain a bit more Cheers Peter February 12th, 2011 at 9:05pm It is only referred to as writing an option if your position is short. In your case, you already have a long position so to sell an option is just closing out that position. Alex February 12th, 2011 at 2:57pm Hi Peter, I have a question. So lets say I bought a call option for 1 with a strike price of 10. In a month the price of the stock went up to 12. which means that my call option right now cost 2. So, right now I want to sell that option back. Does it mean that I am actually writing a call option And if before the expatriation price of the stock will go further up I will lose money, and will have to buy back stock at the strike price Or it simply means that I am closing my position and will not have to fulfill any other obligations Peter February 10th, 2011 at 1:50pm No worries, good luck Joann February 10th, 2011 at 11:16am Great Advice Simple and clear Yes, I think it is a covered call. And from you, I know that I am a option holder of a short call. Muchas gracias. I am watching everyday now to catch the right as the market seems to cool down a bit. That is what I need. Sorry It is just a timing issue. Peter February 9th, 2011 at 9:05pm So, you own the stock as well as the short call option, right i. e. a covered call If so, then you ve probably already capped out in terms of your upside gains The short option will keep losing money as the stock rises but these losses will be offset by the gains on the stock. If you are still bullish on the stock, then buy back the call option and continue to hold the stock. Joann February 8th, 2011 at 5:16pm I ve been stuck for a little while and just found you I have been trading option in a very simple way with my existing ABC stocks and was doing fine since the stock does not go up and down a lot. But in the last two weeks, it went up more than 20 , so I began to get nervous b/c I might loss those stocks which I do not intend to sell. (big captial gain) I an option (not sure if it is called short call) to SELL ABC at 150 by 1/2012 for 10 contract and got 8.00 premium/sh collected in late 2010. Now ABC is worth 165 and the same option symbol is at 21.00 premium/sh. Normally I knew I can t big and can still make a profit. But this time, the gap is quite large and negative. 21-8 13/shr I am debating on doing one of the following: 1. should I spent 13000.0 to buy back my stocks and turn around to 8 premium/shr. to keep my small gain and still keep my ABC stocks or 3. should I just let my option being taken and then face the captical gain tax (I estimate the gain to be 60000 (60 1000). Someone told me that since my expiration date is 10 month away, normally folks (option buyer) won t exercise my option as yet. How close to 1/2012 should I start to worry I have yet to digest/understand about all the bells and whistles about option, so my question might be not be stated very professional. Hope you could understand my question and looking forward for your wise advices. Peter February 6th, 2011 at 9:36pm Good stuff mate How did your trades end up Joshua February 6th, 2011 at 6:19pm This has been a great help Peter. I cant say thank you enough. I just made my first call buys last week. Keep up the good work. Peter February 3rd, 2011 at 9:44pm You trade options on an exchange, which means (unless you re an exchange member) that you have to go through a broker. kumar February 3rd, 2011 at 8:46pm How do you really enter in the options contract. if i want to trade in options, what should be my approach. do i have to deal with options only through a broker Peter January 15th, 2011 at 6:50am Sure, the X-Axis represents the stock price and the Y-Axis is the Profit and Loss (P L). The blue line shows the actual profit/loss of the option at the expiration date of the option. And the pink line shows the theoretical profit/loss of the option with 60 days left to expiration. So, with this example, if the stock price is below 26 at the expiration date of the option you will lose money, which is represented by the blue line. The profit you will make above 26 is shown as the line increases to the right. Wen January 14th, 2011 at 9:53am Thank you so much for the site. Buen trabajo. I need your help understanding the graphs. I tried to grasp but I couldn L 60 days. What are 20 21 22. 30. -2,-1. 5. I read your response to another question on graphs on this page, but could not get the point. It will be very helpful if you take an example to explain this. Thanks in advance, Wen Peter January 11th, 2011 at 3:42pm No, nothing happens as you don t actually hold the stock - only a contract which provides the right to buy the stock. SS January 11th, 2011 at 11:43am What happens if you buy a long call and the stock pays a dividend. does the holder of the long call have to pay a dividend to the write of the call option Peter December 30th, 2010 at 9:26pm Hi Jerry, hard to say what the odds are, but yes, they are selected at random. The chances of early exercise are higher right before a stock goes ex-dividend. Jerry December 30th, 2010 at 12:14pm Hi Peter please don t mind me asking this silly question. say if i write an option and sometime later the other party decides to exercise it but there might be many other people writing exactly the same option as i did in the market. What are the chances that the option i wrote being exercised Are options being exercised selected randomly Thank loads Peter December 14th, 2010 at 3:41am Yes, you can sell the options that you purchased back at a profit. If the position is closed then no, you don t have any risk of being exercised. If your position remained short, then yes, your options could be exercised. You can also do it in reverse i. e. sell an option and then buy it back at a lower price for a profit. bharath December 14th, 2010 at 1:13am hello, can you tell me if i can sell call and put options after buying them in the first place thereby gaining profits in increased premium values, now that i have sold these options do i run the risk of the buyer exercising it or have i passed on the risk to someone Neelam November 21st, 2010 at 11:14am Thanks, this site is so clear, that I understood those concepts just by going through it. So now I don t feel to ask those silly doubts. Thanks once again for your work on this site. Peter November 15th, 2010 at 5:27pm Yes, you can certainly roll it over - you would do this buy buying the Jan11/Apr11 Calendar Spread - selling the Jan call option and buying the April call option. With this calendar spread, if the market drops off during January you will profit by keeping the premium received for selling the January call options while still being in the game for a bullish move with your long April call options. If the stock doesn t make the expected gain by April, then yes, you will lose your premium paid for the April options. If you were very bullish on the stock, however, you might be better placed just buying the stock outright - then you don t have time working against you. It all depends on your appetite for risk and your view of the stock. And also what the prices are for the options, which comes down to the volatility. When volatility is low, which means option premiums are low, this is usually a better time to buy options. kaushik November 15th, 2010 at 12:52pm I have a better Q this time :p I have a call option (out of the money) that expires in JAN 11, i am not sure if the stock will make it. But i am confident it do well by the APR 11. So is there a way that I can rollover this Call to APR11 Expiry. If so how should i do it. I mean should i cancel JAN11 Call and buy APR 11 call. And also What are the disadvantages. can you please help me in this Peter November 12th, 2010 at 2:45pm Sure, what is it exactly you don t understand Neelam November 12th, 2010 at 10:32am Hi, I have many people about the meaning of long call and long put, similarly short call and short put i am not clear about it, can you help Peter November 7th, 2010 at 5:05am When you trade options via an exchange you aren t buying the option from the company that the option is based on. you are buying the option from another trader or market making firm. When it comes to , take a look at the reasons to trade options link. Avísame si algo no está claro. Ben November 5th, 2010 at 8:43pm Thanks for this site, it is very helpful. I t understand how this benefits anyone (a financial institution, company, etc.) to allow you to do this in the first place. If the point of stocks is to buy them, and in doing so to invest your money so that the company can use that money, ideally to do a good job in business, become a more profitable company, which then creates a greater demand for their shares (and therefore the stock goes up in price), what is the point of an option For example, if a stock is at 95 and I buy an option that allows me to buy 100 shares at 100, and then the price goes up to 103 then I can exercise the option, or I can t I just have bought the stock directly when it went up anyway and just completely avoided the option, in other words how has anyone (meaning any financial institution, company, etc.) benefited by even giving me this option contract in the first place Sorry for this basic question, but it seems like I am learning more and more about the details of how options work without even understanding the underlying point of why they exist, and that s frustrating to me. Thanks Peter October 28th, 2010 at 3:34am Hi Kaushik, if there is a market in the option contract (i. e. a bid/ask) then you can sell it back whenever you like - it doesn t matter what price the stock is trading. kaushik October 27th, 2010 at 10:43am So this is my Q current xyz price is 20 for 1 lets say i bought a xyz JAN 11-Call with strike price 25 in dec xyz is 23, so my calls are 2 each, up by 100 Can I sell them even xyz they hits the strike because im already 100 up in profit. OR does the underlying stock HAS to hit strike price in order to sell them. thanks again Peter October 22nd, 2010 at 4:41pm Ha, no probs, keep -) kaushik October 21st, 2010 at 5:52pm peter u r the best. i spoke my brokerage, u guessed it damn right. i have to use to close out. more dumb Qs coming soon :P Peter October 20th, 2010 at 7:33pm Hi Kaushik, ha, no worries, that s what the site is for. it can be confusing. The terms . I use Interactive Brokers and they simply have automatically as 1 - 1 0. If you are long an option contract and you wish to close it and take profits then you would just sell the same option contract. Perhaps the terminology in your broker t really matter - you cannot be long and short the same contract at the same time. Not sure of your last question. if you have bought a call option only then you won t be long any shares - unless you already own them kaushik October 20th, 2010 at 5:06pm peter thanks for the reply, now air it bit clear. now i have another Q I see the different commands like buy to close, sell to close. if i purchase call (buy to open) and i want to sell them, i dont want to buy back the shares, i want to sell and get the profit (cash in my account). Do i have to use the option and if i want to buy the shares back, do i have to use the ..sorry for all the super low basic qs. options are confusing for me man. Peter October 19th, 2010 at 5:02pm 1) It depends on the Multiplier (or contract size). In the US option multipliers are 100, so in your example you would pay 980 broker commission. However, in Australia for example equity options have multipliers of 1,000, which means you would pay 9,800 for the same option. 2) Yes, you can simply sell back the option and immediately realize the gain. If you exercised you would have to take delivery of the stock, which means outlaying the total purchase price (contracts x multiplier x strike price). Then sell back the shares to realize the gain. In your example the option will be worth 14 so it would make more sense to sell back the option - unless you wanted to hold the stock for a longer term position. Joey October 19th, 2010 at 3:05pm I have a question that pertains to the following info below. 1)When purchasing a Long Call Option with a strike price of 8.00 for a stock that is trading at 17.00, I see the bid/ask price is around 9.80. Does this mean that I have to pay 980 ( 9.80 X 1 contract of 100 shares) Contract Fee of broker(scottrade .50 a share) Commission fee to Broker website Or, do you just pay the 9.80 for one contract Contract fee (lets say .50 a share) Commission fee to broker website 2) Addtionally, if I purchase a three month expiry long call based on the above info (Strike 8.00, Underlying Stock now trading at 22.00, and only 1 contract purchased), and let t that different than executing the option and realizing a profit of 14.00 (22-8) minus any commission and contract fees paid Peter October 19th, 2010 at 1:17am The price of an option is made up of two components: intrinsic and extrinsic value. The time value you refer to is the extrinsic part. intrinsic is the amount where if you exercised now would be realised immediately. So, if the stock has traded up to 35 and you are long a 30 call then the option is worth re now in the money on the trade of 4. If you are not interested in owning the stock then you would just sell the option and take the profit. Unless you thought there was still room for the stock to move upwards, then you might want to hold onto the option. kaushik October 18th, 2010 at 8:01pm Gr8 explanations, But i have a doubt, it really fundamental but want to calify SENARIO: lets say ABC is 25, i buy a call option for ABC 30 for June 2011 epry 1.0. the stock didnot do well till june, but suddenly went to 35 in july 2 week. but as the call option is expriring soon, it should have lost good amount of value due to time decay. (Q1)will option be worth less than wht i bought for because of time decay, even though the stock is way ahead of strike. Q2)) so at this point instead of trading out should i excerise the option (buying the stocks)because im In The Money. please explain me how to be prudent in this situ. Peter September 30th, 2010 at 6:45am Hi Phil, the P L now with an option that expires in 60 days. Phil September 30th, 2010 at 4:22am I L stand for and why the difference between expiration and 60days What about the time-value of the option combinations appreciate your help, regards Peter September 23rd, 2010 at 6:04am Hi Joe, yes you can sell the call back in the option market. In this case the the option. Joe September 21st, 2010 at 3:05am Ok I s say I buy a call. This means I have the right to buy at a given price. Now lets say the value of stock reaches higher than the strike price. Is there a way to realize the profit without actually buying the underlying stock Do I sell the call to someone else Is this the same as writing a call Peter September 20th, 2010 at 1:43pm Hi John, you t mean that you cannot make money with them. they are still highly leveraged instruments but as you say you have to get the direction AND time right for options to be profitable. John September 20th, 2010 at 10:38am I have a couple questions on long calls perhaps someone can offer guidance on this. Assume ABC is trading today at 10/share and I expect that the price will increase over the next year or two. If I wish to profit from this I can either 1) buy actual shares of ABC or 2)buy a call option. If I buy call option, say for example a January 2012 10 call, what I t actually crest 10 until February of 2012, then my call option expires and I lose the premium that I paid. I guess my question/observation is that there is still a fair amount of risk in long calls because they are time sensitive, whereas if I actually own the shares I can afford to wait until the stock price increases, which may or may not happen within a given time frame. So essentially a long call is a bet on both price and time, whereas an actual ownership position is more a bet on price alone Is my understanding correct on this Thanks in advance for any help. Peter September 19th, 2010 at 8:06pm Equity options traded in the US have a multiplier of 100, which means for every option contract you buy you have the right to purchase 100 shares of the underlying stock. This also means that the price is multiplied by 100 - so 100 x 0.05 5. So this option will cost you 5. When exercised, you have the right to buy the stock at the strike price, which in this case is 1. If the stock is trading at 1.50 by Jan 2011 then you will make 45 on this trade ( 1.50 - 1.00 - 0.05) x 100. Marshall September 19th, 2010 at 1:32am I am looking at YRCW Jan. 2011 1 dollar calls. currently trading at .05 how many shares would I be buying for the .05 cents My second question is when the contracts expire in Jan 2011 and I exercise my option and purchase the the stock would I than purchase the stock at .05 per share even if the market is trading at 3.00 bucks per share when the contracts expire How much money do you have to have in your account to buy options Peter August 29th, 2010 at 5:02pm That s right. when you already have a long position in an option and you sell, you close out the position and the profit is realized instantaneously. Adam August 29th, 2010 at 4:27pm I think I see, so basically the first example is staying strictly in the options market and just trading contracts. Controlling 100 shares of stock (if i just bought 1 contract) without actually purchasing the actual stock and i can sell anytime before expiration and realize the profit (just as if i actually purchased the stock) except by trading contracts, it eliminates the need to purchase the stock. However, when you sell the in-the-money option contract back, is the profit ( 500) instantaneous (excluding settlement and what not) Or is it like selling (short) a call Where I could lose my entire premium (unlimited risk and limited profit potential), or is that entirely a separate methodology of trading I guess im confused on the concept . Example 2 is crystal, thanks so much. Peter August 29th, 2010 at 8:41am There are two ways to realize the profit 1) Sell the option contract back in the option market. P. ej. let s say that the 10 strike option that you bought cost 1.50 and by the time the stock traded up to 15 the option is then trading at 6.50. Then, you would sell the option back at 6.50 and realize 500 ((6.50 - 1.50) x 100). 2) When you exercise the option you are assigned the stock at the exercise price of 10 while the stock is actually trading at 15. So, yes, you then spend 1,000 on the stock that is now worth 1,500. Now you re long the stock at 10, you would sell the stock on the open stock market to realize the 500. Make sense Let me know if anything is not clear. Adam August 29th, 2010 at 12:08am I m trying to learn options, but im not quite understanding how you would actually realize the gains from a long call option that was exercised while in-the-money. For example, if I purchased a call option on XYZ stock with a strike price of 10, and the stock price shot up to 15, how exactly would I physically realize the profit in my account Since a call option is a right to BUY the stock at the specified strike price. If I were to buy the stock at 10 (10 x 100 1,000) it would cost me 1,000, but the actual stock is trading at 15 (15 x 100 1,500) so that s 500 difference, but HOW exactly would physically I get that 500. If I exercise the option I own 100 shares of XYZ stock at 10, if it s currently trading at 15 would have to sell it at the current price ( 15) to actually realize my gains I just don ve looked, nobody ever says that you have to SELL the stock back after you exercise an in-the-money call option. So i guess my question is: After you exercise an in-the-money call option, what happens next How do you get the profit Please help me, i can t seem to figure this out, thank you. PS: i realize i ve excluded BEP for commission and fees for simplicity. Peter June 16th, 2009 at 6:53pm Are you long all 3 I. e. long the call, the put and the future If so, your position is synthetically the same as a long call with a breakeven point at 4693. If you re very bullish on the Nifty, you may as well hold onto the position as you are long delta and the current position will benefit from the market rising. However, you might also want to look at selling 2 call options around the 4700 strike level. You will cap your upside potential somewhat, but lower your breakeven and also your downside losses if the market falls. preetha June 16th, 2009 at 4:17am I am an Indian trader. I have call 43(Nifty 4800), put 90 ( Mini Nifty 4400) and a Nifty 4560. The closing price of the Mini Nifty today is 4520. What can I do to secure my position next day piyush saini April 28th, 2009 at 10:00am but how it will be profitable in every condition and when one can make profit sale and purchase both than why should one do it. Alexander Shlepakov January 17th, 2009 at 5:32pm Remember that you can always hedge your long call position by selling a further out of the money call at the same time. Alexander Shlepakov. aka Bull Call Spead Admin December 8th, 2008 at 3:12am A HH December 4th, 2008 at 5:13pm Hello, can you tell me what is a long stock and how is it different from long call Add a Comment
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