January 12, 2009
Trading options questions?
Trade asked:
Im new to options and i started a virtual account and so far the past week or so ive had great results. Id buy an option by looking at the stock seeing if it will make a nice move up or down then buy a call or put.. and the option would move like 20 - 100% in one day!.. so in real life could i see that same day for a nice 20 - 100% profit?? im trading both in the money and out the money options..
see = sell*
Im new to options and i started a virtual account and so far the past week or so ive had great results. Id buy an option by looking at the stock seeing if it will make a nice move up or down then buy a call or put.. and the option would move like 20 - 100% in one day!.. so in real life could i see that same day for a nice 20 - 100% profit?? im trading both in the money and out the money options..
see = sell*
Filed under Investing by Administrator
November 2, 2008
Trading Puts and Calls?
kristin asked:
Okay, so can you buy an option (either a put or call) and have no actual stock in that option, then wait till someone with stock needs to purchase your option in a hurry ro save their butt. Obviously, you would have to anticipate the stock in which you bought the option to either rise or fall to put stcok holders in a panic in order for them to pay you for your option. I had a classmate in finance that was making an average of $2000/day but had to slow down b/c it was too stressful and time consuming. But anyway, can you be the ‘middle man’ and just hold on to these options untill someone is willing to pay you fro them. Then that person would have to exercise that option with the Original writer (the person that I would have bought it from). Is this scenero realistic??
Okay, so can you buy an option (either a put or call) and have no actual stock in that option, then wait till someone with stock needs to purchase your option in a hurry ro save their butt. Obviously, you would have to anticipate the stock in which you bought the option to either rise or fall to put stcok holders in a panic in order for them to pay you for your option. I had a classmate in finance that was making an average of $2000/day but had to slow down b/c it was too stressful and time consuming. But anyway, can you be the ‘middle man’ and just hold on to these options untill someone is willing to pay you fro them. Then that person would have to exercise that option with the Original writer (the person that I would have bought it from). Is this scenero realistic??
Filed under Investing by Administrator
November 1, 2008
What do day traders do? Do they seek lows and highs of a day do they hold stocks for several days sometimes?
skahhh asked:
and or do they short or buy puts and calls? What is the defined rate and trading strategy of a day trader? Do they look for news or how fast a stock is rising? What?
and or do they short or buy puts and calls? What is the defined rate and trading strategy of a day trader? Do they look for news or how fast a stock is rising? What?
Filed under Investing by Administrator
mimi asked:
I think I understand the basics of option trading like calls and puts. What I need help is why an option May put has a strike price of 55 when it’s underlying stock is at 52.03 in Feb? Isn’t the put for buying it down?
I think I understand the basics of option trading like calls and puts. What I need help is why an option May put has a strike price of 55 when it’s underlying stock is at 52.03 in Feb? Isn’t the put for buying it down?
Filed under Investing by Administrator
October 30, 2008
How to know if there is a large number of “put or call options” on a certain stock?
techzone12 asked:
If I am watching a stock, is there away to detect insider trading?Can I predict it by just looking at the volume (unusual volume)?.
Also how do I find out if there is a large number of “put options” on a ceratin stock?
If I am watching a stock, is there away to detect insider trading?Can I predict it by just looking at the volume (unusual volume)?.
Also how do I find out if there is a large number of “put options” on a ceratin stock?
Filed under Investing by Administrator
Ivan K. asked:
I just want to know if there are still plenty of people who try to get in even though there are only maybe 4-5 days to expiry.
I just want to know if there are still plenty of people who try to get in even though there are only maybe 4-5 days to expiry.
Would you exercise 1 Oct 3 call (AIG) and it’s 1 dollar on expiration date or sell to close the call? (assuming AIG is trading at 3.86)
Thanks.
Filed under Investing by Administrator
October 10, 2008
Put call parity
bionicturtledotcom posted video:
Put call parity derives from the idea we can have two portfolios (one with an option, the other with a put) that have identical payoffs regardless of what happens to the stock. This gives a way to link the value of a call option with a put option.
Filed under Education by Administrator
chucks72 asked:
I am all set to trade but I am having a hard time pulling the trigger on the first one. I have a few stocks in my account, but I really want to give options a try. Thanks.
I am all set to trade but I am having a hard time pulling the trigger on the first one. I have a few stocks in my account, but I really want to give options a try. Thanks.
Filed under Investing by Administrator
October 5, 2008
How do I report option gains or loses?
mgm00056 asked:
I traded options in 2006. I.e., I bought and sold calls and puts without owning the underlying stock. My net for the year was a loss of about $1200. Can I report this loss on my 2006 tax return? If so, where?? Thanks.
I traded options in 2006. I.e., I bought and sold calls and puts without owning the underlying stock. My net for the year was a loss of about $1200. Can I report this loss on my 2006 tax return? If so, where?? Thanks.
Filed under United States by Administrator







