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06-09-2023, 02:16 PM #1201
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06-09-2023, 03:40 PM #1202
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06-09-2023, 05:19 PM #1203
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06-27-2023, 11:49 AM #1204
so i want to preface this by saying im just doing this with small amounts of money to learn so i dont mind losing money as part of this. That said, here is my question that I'm hoping someone can explain to me.
i bought 7/21 10 C calls for robinhood and my price paid on 6/14 was .57. those have been bouncing around but now that the price of the stock is pinging the strike price the value of the options is at .44 so im underwater by like 63 bucks. I see that the value of options is not explicitly tied to the stock price but what specifically is impacting the price of the option to create the disparity?Last edited by jafomofo; 06-27-2023 at 12:36 PM.
"I'm not like most girls." -most girls
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06-27-2023, 12:43 PM #1205
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06-27-2023, 03:19 PM #1206
Do some reading on option greeks. It's critical that you understand this.
For your case Theta value determines how much your contract decays, or loses every day, regardless of whether the stock value changes or not. The other greeks, delta particularly play a role as well. Delta and theta are the two easiest to determine option values for a given price movement/time.
So currently your contract 7/21 10c has a theta of -.0093. So that means if the stock stayed the same price and volatility doesn't change, your contract loses $0.93 every day.
Greeks can change daily, so values and their affect are not static.2022 Option Trading Realized Gains: $125,348 USD
2023 Goal: $140,000
2023 Option Trading Realized Gains: $142,035 USD
2024 Goal: $80,000
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06-27-2023, 08:55 PM #1207
Gotcha. I had to actually start power etrade and add the columns to see those. That makes sense. So the .0093 becomes .93 for each contract and then 5 contracts held for 14 days accounts for about 60 bucks which is close enough. Does that decay get factored into the cost of the option daily then? Thank you.
Assuming these pass the strike price and I decide to just exercise and hold the stock it becomes a moot point anyhow correct? Net result to me would be that I bought the underlying stock at a 5-10% discount and could either hold or sell immediately? I'll watch some videos on exercising them in deference to closing."I'm not like most girls." -most girls
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06-27-2023, 09:56 PM #1208
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06-29-2023, 11:52 AM #1209
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06-29-2023, 02:03 PM #1210
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06-29-2023, 02:09 PM #1211
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06-30-2023, 11:01 PM #1212
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07-01-2023, 09:43 PM #1213
for people that trade short term options, do you use a strategy like call spreads of i guess straddle spreads if that is the correct term? Trying to figure out the system from a guy I saw online and it seems like he places 3 conditional strike prices above and below the opening price so that they only trigger a purchase when a price in either direction is met.
"I'm not like most girls." -most girls
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07-05-2023, 09:58 AM #1214
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07-05-2023, 12:12 PM #1215
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07-06-2023, 03:47 PM #1216
I sort of understood what he was doing, just wasn't sure how automated it was. Confirmed he's just setting alerts and completing manual orders based on momentum milestones. Trying to figure out how to automate some things myself atm but not using it for any actual trading atm.
Last edited by jafomofo; 07-06-2023 at 04:00 PM.
"I'm not like most girls." -most girls
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07-06-2023, 06:06 PM #1217
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07-13-2023, 08:14 PM #1218
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07-13-2023, 08:48 PM #1219
Sometimes when you’re rolling a particularly expensive call that you sold you may not even have the available cash to buy it back first. So a broker may let you execute it in one go.
Another detail is that sometimes you can close one option but you can find quite easily that you can’t open a new one if no one‘s going to deal with you, this happens, even when there is volume and open interest, so rolling an option in one transaction at least prevents you from being stuck midway.
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07-21-2023, 08:27 PM #1220
Someone give me a low down on calls/options and best way to trade them? also some links on understanding TA on low/mid cap stocks that I want to buy and hold and others buy and flip. Have around 10,000 to start playing with in the market again, but my TA is severely lacking. Using TOS
I was always looking at the finger pointing at
the moon. Now I'm just looking at the moon.
And theres no me looking. Theres just looking.
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07-22-2023, 06:06 PM #1221
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07-23-2023, 10:50 PM #1222
thinking about buying a few hundred shares of lumen specifically to do covered calls with as a learning experience. i collect the premium regardless and then the worst case scenario is that the stock hits the stike and i get assigned which means im selling my stock at the strike which is fine because meh. whats the downside here?
if i buy at 1.70, sell a call at 2 and collect 50 bucks in premium. if it breaks 2 and gets exercised then i get .30 per share plus the premium - fees. If it doesn't get exercised then i get to do it over again.. is there some scenario in which i lose out here?"I'm not like most girls." -most girls
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07-24-2023, 11:52 AM #1223
really depends on where you're getting your numbers for your calcs. trading at 1.86 and you want to sell two $2.00 Sep15 call contracts?
if it reaches your strike you can let the shares go while keeping the premium. If you decide you want to keep the shares, you Buy to Close and repurchase the contracts you sold.
The downside is the shares can drop below your purchase price and premium. Say it drops to $1.50, then what? Premiums on $2.00 will be worthless so you'll have a hard time selling premium. Then you'll be stuck with shares at a loss and can't collect premium. This is why it's important that you choose wisely. If you are going to use a covered call strategy to generate cash flow, you need to buy shares that you are a)comfortable holding for the long term and b)is in an upward or sideways trend. You also need to choose stocks that have decent volume otherwise you will be selling calls near the bid and buying at the ask - which, if you are selling for pennies and buying for pennies will erode all of your gains.Last edited by usersignup2; 07-24-2023 at 12:31 PM.
2022 Option Trading Realized Gains: $125,348 USD
2023 Goal: $140,000
2023 Option Trading Realized Gains: $142,035 USD
2024 Goal: $80,000
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07-24-2023, 12:51 PM #1224
Just threw $1000 back into Robinhood to play around with options.....not going great so far, but I assumed it would be a learning experience. I've got a buddy helping me but I think he's got a gambling problem, lol. He makes money but some of his pics are just dumb but the potential payout COULD be huge.
Learning daily, but still not sure I'm not going to just lose $1000. lol
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07-24-2023, 02:22 PM #1225
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07-24-2023, 02:44 PM #1226
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07-24-2023, 02:54 PM #1227
Yes. My goal is cash flow so generally I will be selling calls or have active sold calls every week.
To do it effectively you need to be confident in your analysis and understand if your stock is in an uptrend, sideways or downtrend and then choose strikes accordingly. As well, you need a strategy if they re about to expire in the money.
Also I would not agree that averaging down on your losers is an effective investing strategyLast edited by usersignup2; 07-24-2023 at 02:59 PM.
2022 Option Trading Realized Gains: $125,348 USD
2023 Goal: $140,000
2023 Option Trading Realized Gains: $142,035 USD
2024 Goal: $80,000
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07-24-2023, 03:10 PM #1228
I’ve got a portion of my portfolio for big outsized moves based on anticipated moves such as mergers, buyouts, legal news, or plain ole biotech clinical trial results. When you hit the payout can be big. Often enough your long calls will expire worthless so it’s worthwhile to try and get out before they are entirely worthless.
My strategy is buying less than $50/contract with 3-6 months out of you can manage and it helps prevent decay. Obviously this requires going fairly OTM but if the news is worthy of a 100% gain or more it can be solid regardless.Fitness connoisseur
0.4 mg of party's over wake the FK up!
"the personification of greatness"
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07-24-2023, 03:44 PM #1229
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07-24-2023, 07:18 PM #1230
I would just continue to roll out until they expire worthless or get called away.
If you are averaging down a position you plan to exit I think it's much better to put that money into a winner that is in an uptrend since it has a higher likelihood of making up the difference.2022 Option Trading Realized Gains: $125,348 USD
2023 Goal: $140,000
2023 Option Trading Realized Gains: $142,035 USD
2024 Goal: $80,000
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