"To keep it simple we will just talk about longs for a monent. Buying a single call option is a long play"
Here is how I remember Call = Long, Put = Short:
I think of "Call" like I'm going to "Call" someone up on the telephone, so "Call UP".
I think of "Put" like I'm going to "Put" someone down, or make fun of them, etc, so "Put DOWN".
No lack of OPTIONS
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- PebbleTrader
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- aliassmith
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Ya when I first started with options about 18 years ago I had to remember it like that. Although later when we do spreads a call position can be short. BTW don't get to excited about the 18 years ago. I am no GURU. I failed with options miserably and my broker got me messed up. This was before online trading was really popular.
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- rushN4
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aliassmith wrote:aliassmith wrote:Alright then, I wouldn't be discussing options by myself.
Start with a few definitions.
BUYING a Call option gives you the RIGHT to request the underlying at an agreed upon STRIKE PRICE, if the option is In The Money (ITM). You pay a premium for that right.
To keep it simple we will just talk about longs for a monent. Buying a single call option is a long play. As you can see in the basic MO 101 pic i posted of zline setup a call option could be used instead of buying the underlying and using a stoploss. Have you ever had your stoploss hit and then price went your direction? The call option has a defined risk and no need for a stoploss.
what would be better on a simple pattern like this.....Buying a Call where time decay shrinkes the OPtionsprice every Day a little but you have unlimited Profit potential. Or Selling a Put where time Decay is Working for you but your Profit is limited to the Option Premium
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- PebbleTrader
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"as i understood it she trades wide Index Strangles with a delta of 5(%) so there is a 95% chance that these Option will be ATM on expiration and that means that she collect the full Premium 95% of the time."
That sounds about right.
I think it was a smart move for her to move away from individual stocks to the largest indexs.
That sounds about right.
I think it was a smart move for her to move away from individual stocks to the largest indexs.
Life is just a journey
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- aliassmith
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rushN4 wrote:aliassmith wrote:aliassmith wrote:Alright then, I wouldn't be discussing options by myself.
Start with a few definitions.
BUYING a Call option gives you the RIGHT to request the underlying at an agreed upon STRIKE PRICE, if the option is In The Money (ITM). You pay a premium for that right.
To keep it simple we will just talk about longs for a monent. Buying a single call option is a long play. As you can see in the basic MO 101 pic i posted of zline setup a call option could be used instead of buying the underlying and using a stoploss. Have you ever had your stoploss hit and then price went your direction? The call option has a defined risk and no need for a stoploss.
what would be better on a simple pattern like this.....Buying a Call where time decay shrinkes the OPtionsprice every Day a little but you have unlimited Profit potential. Or Selling a Put where time Decay is Working for you but your Profit is limited to the Option Premium
Well Selling a naked put could be done depending on your financial situation and your broker. Selling a naked put has limited profit and unlimited loss.
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aliassmith wrote:rushN4 wrote:aliassmith wrote:aliassmith wrote:Alright then, I wouldn't be discussing options by myself.
Start with a few definitions.
BUYING a Call option gives you the RIGHT to request the underlying at an agreed upon STRIKE PRICE, if the option is In The Money (ITM). You pay a premium for that right.
To keep it simple we will just talk about longs for a monent. Buying a single call option is a long play. As you can see in the basic MO 101 pic i posted of zline setup a call option could be used instead of buying the underlying and using a stoploss. Have you ever had your stoploss hit and then price went your direction? The call option has a defined risk and no need for a stoploss.
what would be better on a simple pattern like this.....Buying a Call where time decay shrinkes the OPtionsprice every Day a little but you have unlimited Profit potential. Or Selling a Put where time Decay is Working for you but your Profit is limited to the Option Premium
Well Selling a naked put could be done depending on your financial situation and your broker. Selling a naked put has limited profit and unlimited loss.
selling cash secure puts is a great way to collect a little extra money while you are waiting for a stock/commodity to get down to the price you would like to own it at.
The only difference between a nake put and a cash secure put is you have enough money in your account to actually buy the shares if price drops to that level and you get assigned.
I only sell puts on things i have the money to buy if assigned and at a level i wouldnt mind owning it incase you do get hit.
- aliassmith
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Dillinger wrote:aliassmith wrote:rushN4 wrote:aliassmith wrote:aliassmith wrote:Alright then, I wouldn't be discussing options by myself.
Start with a few definitions.
BUYING a Call option gives you the RIGHT to request the underlying at an agreed upon STRIKE PRICE, if the option is In The Money (ITM). You pay a premium for that right.
To keep it simple we will just talk about longs for a monent. Buying a single call option is a long play. As you can see in the basic MO 101 pic i posted of zline setup a call option could be used instead of buying the underlying and using a stoploss. Have you ever had your stoploss hit and then price went your direction? The call option has a defined risk and no need for a stoploss.
what would be better on a simple pattern like this.....Buying a Call where time decay shrinkes the OPtionsprice every Day a little but you have unlimited Profit potential. Or Selling a Put where time Decay is Working for you but your Profit is limited to the Option Premium
Well Selling a naked put could be done depending on your financial situation and your broker. Selling a naked put has limited profit and unlimited loss.
selling cash secure puts is a great way to collect a little extra money while you are waiting for a stock/commodity to get down to the price you would like to own it at
https://www.tradeking.com/education/opt ... ecured-put
It has its place for sure, but not recommended for new options trader.
I was considering this as a way to trade without a stoploss and have risk control. https://www.tradeking.com/education/opt ... /long-call
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