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What Happens when I Exercise a Put (when I own 100 shares)? | Adam Answers Episode 1 | InTheMoney

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5 сен 2024

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Комментарии : 157

@zwalters20 4 года назад

Man, I stumbled onto your page and have watched tons of option educational videos from other RU-vid channels... Yours BY FAR is leaps and bounds so much better. I wish I would of found your page a long time ago. Thank you so much for everything you do. The videos, explanations, and breakdowns are amazing!

@beforemytimecars4573 3 года назад

But his math might need a little work, lol.

@CatsCantSwim 3 года назад

☝️ He said LEAPS. Ask Adam if he likes LEAPS!

@og1kanobi40 3 года назад

You said "LEAPS" ------Adam: (passes out)

@antwarior 3 года назад

Agreed

@ctoh27 4 года назад

Im pretty sure that the premium is missed out in the calculations, if you exercise the put at 40 when the stock is at 39.30, but you bought the puts at > 0.7 you're gonna be making a loss my friend.

@abenton 4 года назад

A minor mistake at 7:38, the option premium on expiration day would be $5, even though your total profit is $4/share.

@rudeboymon3177 4 года назад

Options seemed so complicated until i read options for dummies. It breaks down the basics, simple and complicated strategies, as well as dos and donts. It really helped me understand that i will never trade options 😆. Its a fast way to lose your money. Im a buy and monitor type of investor. Gold bonds and real estate are how you insure your stock portfolio without having to pay 10% or more premium every few years to protect your investments. No hate to good traders. Its too much work and stress for me

@Ndasuunye 2 года назад

it's not for everyone. NO shame in that. WOrks what's best for you. There's more than one way to make money. Keep finding your area of expertise.

@WeatherStationZ41 4 года назад

"Stock could theoretically go on, up and up and up and in this amazing beautiful bull market who knows? Maybe it will."

@InTheMoneyAdam 4 года назад

R.I.P.

@MoltenMouseMetal 4 года назад

ELON MUSK, NOOOOO!

@RampantWolf 4 года назад

Like Tesla

@AnthroGuitarist 4 года назад

Fievel Mousekewitz now tesla’s at $1500+ lmao

@vicwillis4295 3 года назад

oh man you can buy them as short term insurance for your underlying while considering a long term hold you can buy them as a means to profit if you're bearish and short you can buy them as insurance for your underlying if you're bearish to cut losses to put puts simply there's a lot of options for options. it's sinking in though.

@northparkservicesllc6396 4 года назад

My First Call option - Question on exercise a call option - Purchased in the money call, $7.50 strike @ $1.55 break even at $9.05 Expires 5/15 Today bid price is at $6.50 ask at $7.10 Stock is at $14.24 If continues to go up or even stay flat next 5 days. What do I do?? Sell off now? Wait it out to expiration? Exercise also? Can we do both? If, stays in the money at expiration - Can I profit from option trade and also purchase 100 shares at strike price and turn around and sell them at a profit of $14 or hold onto them. My first option Trade and totally do not know what to do...

@UnKnown-ge7fo 4 года назад

what about when you dont own the shares and the put option is in the money?

@mpower2386 4 года назад

You will sell 100 shares per contract at the strike price thus creating a short position on the underlying since you dont own it. the profit is technically still not realized as you are still exposed to the underlying, you have to decide if you want to keep the short or cover at the current market price... anyways, as he explained, you should not exercice as you are losing extrinsec value for no good reason, the math pretty much add up to the same for the option whether your put is married to the underlying or by itself.

@arshiaa8474 3 года назад

I like how you are introducing options. It is a bit confusing how you explained at 12:10. Using terms like credit will create confusion with selling options. Anyways thank you

@streetmogul338 4 года назад

Hey I bought a meritor 17.50 covered call when stock price was over $19 by mistake I don’t own 100 shares

@davidsohn9808 4 года назад

Just to clarify. So, if you are profitable before expiration, It is better to sell the contracts to someone else rather than exercising it?

@InTheMoneyAdam 4 года назад

Exactly! There are rare exceptions where it may be more profitable to exercise, like if an upcoming dividend is anticipated to be greater than the current extrinsic value of your option, but in a VAST majority of circumstances it is most cost effective just to sell.

@calomomdo2794 4 года назад

InTheMoney in that case, if you sell the long option before expiration, you make profit off of the higher premium that you sell it at. But what if the person you sell it to decides to exercise the option at expiration? Do you have to sell them 100 shares? I’m confused by selling an option and writing an option

@palmfirevisuals8269 4 года назад

@@calomomdo2794 It is confusing since several key terms can have different meanings out of context. I still stumble around 'Long' & 'Short' because I'm used to thinking about Cap Gains taxes and long/short-term. For options buying/selling, there are 4 possible actions: BTO, STO and STC, BTC. When someone says they're going to 'sell' their option, it usually means they are going to 'Sell to Close' a long option that was 'Bought to Open'. But it can mean they are going to 'Sell to Open' ie 'Write' a contract (this type must be 'Bought to Close'). When you buy or sell to close, the matter is closed, no more obligations or 'options' for you. When you buy or sell to open, now you're 'open' for being on the hook. In your case, it sounds like you would be selling to close a position, in which case, you're closed out! The person on the other end of the trade bought to open the contract you were selling and it's their problem now.

@bradcrank274 3 года назад

So on all put you have to exercise the option ,you cant just sell it like a call

@herrickinman9303 3 года назад

Q: What happens when I exercise a put (on a stock or ETF) with strike price S? A: 100*S dollars are credited to your account, and 100 shares are debited from your account. This is what happens whether or not you own the shares at the time of the exercise. If you don't own the shares at the time of the exercise, then you will have to buy them at the current share price. Note: You don't have to wait until expiration to exercise. If the put is in deep the money before expiration, it will have little extrinsic value and no buyers. In such case, it might be a good idea to exercise, rather than wait until expiration and risk a rally.

@twiggantt5350 3 года назад

Say I'm new to options and I bought a $1 put for .05($5.00) and the share price is @ $5+ (I'm aware I have messed up) should I just let it expire?

@ishmael6218 4 года назад

So what happens when you exercise a put? You don’t

@mauriliogouveia555 3 года назад

Cheers for this, I been tryin to find out about "do in the money options always get exercised" for a while now, and I think this has helped. You ever tried - Fiyarper Conspicuous Future - (search on google ) ? It is a great one off guide for learning binary options trading signals minus the headache. Ive heard some interesting things about it and my partner got cool success with it.

@lowkeyIbes 4 года назад

Wouldn't that be the best way to get out of an option that is doing terribly? Exercise the option that way you can still make a profit?

@uriel4892 3 года назад

Exactly, I'm watching videos to "learn" but I'm starting to think I'm understanding trading better than these guys making videos

@arnesmulalic383 2 года назад

Do I need to have 100 shares before I buy a put? Or are the shares “inside” of the put?

@butterfaceee 4 года назад

9:20 got me, too funny man thanks for the tips

@UriahKiser 4 года назад

Can you buy a put option to exit the sell put option before expiration Example being you sell a put option January 19/2020 for January 19/2021 then in august of 2020 You want to exit out of the sell contract can you buy back the January 19/2020 put contract Will that exit you from responsibility of the original sell put?

@tomnguyen8045 3 года назад

But don’t you have to include the cost of buying the put contract into your math ?

@robbybee70 3 года назад

is there a video about selling the option back into the market ?

@BEDROOMoBULLY 3 года назад

I understand why you are saying don't exercise, because there is the potential of the extrinsic value... but you're not saying at what point you should make that decision... If the stock price is continuing to decline right up to the bell at expiration, would it not be wise to let that happen and exercise? or are you implying hit the "sell to close" button at 3:59:59?????

@jamariquai01 4 года назад

So, if at the end of expiration. If your option, is (in the money). You can exercise the option, and keep the 100shares, and make a profit. Or you can either take the profit or the 100shares.

@gfautt 4 года назад

excellent video Thank you so much for doing this !!! very grateful !! keep up the great work. Also, I really like how you break it down and explain it in " English" lol

@robbybee70 3 года назад

I always feel like I understand bettter, before the graph comes into play

@JamesCordeiro 2 года назад

Draw the graph, don't just look at it. It may register better for you when you manually do it/draw it at the same time. When you're drawing the graph, if a certain point of drawing is confusing - that is the part that confuses everything for you. Fix that confusion bubble, and you'll likely get past the "before the graph" issue. :) I'm watching because I've never excercized, but about to with blackberry on a put position I used as added insurance.

@kaliszukt 3 года назад

So you obviously want to sell this option close to expiration. Let's say you cannot find a buyer, for whatever reason, and the option expires. What will Robinhood do after expiration? Will it automatically exercise, or just use the 100 shares? Do you need enough buying power for 100 shares at the current stock price to realize your profit?

@Bkadvice13 3 года назад

Do you have another video like this using Calls as the example?

@dowjoe1208 2 года назад

My put for 1.50 strike was exercised automatically. The shares are trading at 1.43 now. I have 150 cash in my account with negative 100 shares. What the hell am I suppose to do lol. TAI

@DaVidciMedia 3 года назад

I ma new to your channel and i have been trying to follow along. But i see things you have enabled i dont know hwo to. Such as seeing teh Wap and the 90. Could you make a video explaining how to set those up or how to identify them.

@tylertorosian9041 4 года назад

So I have a few questions....1: Can you exercise is you don’t own 100 shares? Should I buy 100 shares of a stock before I trade an option so I have that ability? Or is it more worth just selling at the premium price at expiration?

@InTheMoneyAdam 4 года назад

You can exercise as long as you have the capital to buy 100 shares. But you're right, it's more cost-effective to just sell the contract. When you exercise, you actually end up giving up a portion of the premium (extrinsic value). While there are rare exceptions where you may want to exercise, a general rule is to just sell.

@Kubaaano 3 года назад

I don't get your explanation of option 2. Why do you count the 430$ as a loss? You bought 100 new shares at a lower price. That's a win, no? Either way, probably more profitable to sell the put. But if liquidity is low, maybe you have no choice. So why not excercise?

@BG-gi4tp 9 месяцев назад

I was taught not to exercise but, sell or you'll loose more money if the option is OTM.

@Guurur Год назад

What if I own sero stocks, only own a put, stock goes down below the strike price and it's an expiration day? How do u exercise that?

@FoxKno 3 года назад

So it's a Thursday and u bought a $15 put that expires tomorrow, it is in the money and I cannot sell ,do to day trading restrictions, until tomorrow. It is showing my put worth $35 around the stock price of $14.93. Why would someone buy my $15 put that cost them $35 tomorrow, or does my broker "robinhood" buy it from me and eats the loss?

@meier127 3 года назад

So I bought a put option @ strike of 43, at expiration the asset price was 39.25, the brokerage exercised the option and now I have a hundred shares of the stock. I can’t tell if i made money on this or lost money(it was exercised late Friday night/Saturday morning). When I look some places it shows -368 other places it shows +368(in green). You say don’t exercise, I didn’t but the brokerage did. Why?

@cal.5081 2 года назад

Another excellent video! I have a question about people that exercise puts. Do they typically buy them back to cover immediately? Sometimes I'll use calls as a stock replacement strategy, exercise them and hold as long term investment. But I would never hold onto a short for that long because of the CTB fee and infinite loss potential.

@zennails7250 3 года назад

Hello, what if I just have a put option only? Can I exercise the put option and sell the shares at the current price ?

@DailySend 2 года назад

That's what im trying to figure out as well. I bought a put with only 2 days till expiration and the stock dumped. So should I buy shares at the current price, then sell at the strike price of the put? Or just sell the put?

@mr.e5441 2 года назад

@@DailySend just sell the put, you are going to achieve the same thing but with more steps.

@stephenbile3932 7 месяцев назад

So here's the scenario: I have 200 shares of Tesla with the cost basis of $56,801. Around ($280.41 a share) I am long 2 puts with a strike price of $300. My cost basis on the 2 puts are 18,321 (91.61) With the earnings report that just came out a few minutes ago. Stock price is already down to $200. Your saying that it's not in my best interest to exercise at if the price goes down low enough?

@InTheMoneyAdam 7 месяцев назад

Search my channel for “why you shouldn’t exercise”

@stephenbile3932 7 месяцев назад

@@InTheMoneyAdam I watched the video and I'm even more confused. I'm taking a beating on this stock and I bought these two puts to try to get off the stock with minimal losses. Isn't that what a protective put is for? If I exercise at 300 I'm assuming I'm going to be getting paid $300 a share for that stock so that would give me a little profit. Now I'm assuming what you mean by the intrinsic value is the cost basis that I paid for the option so I'm assuming I'm going to lose that. All the gain somewhat offset the loss? If you have a better idea in the way to handle this please explain. This is the first time I've done a put like this. Usually I'll sell calls on a stock that I own and have been doing pretty good with it. This is all new to me. Just looking to get some guidance

@InTheMoneyAdam 7 месяцев назад

You should just sell tomorrow, not exercise. When you exercise, you give up extrinsic value.

@erlinavicente7411 3 года назад

I tried but this one confused the hell outta me. Was this Put contract you sold? Sell to open? 🤔 could you do another video on this one?

@elsiequiros2752 9 месяцев назад

Hello, I'm brand new to options. If I buy 2000 shares of apple at 189 (a long put) to $165 to expire in 30 days. If the price goes down to $161 before the 30 days, can I sell it? what do I do? Thank you!

@smartestmoronx19 4 года назад

So what would happen at expiration if I dont have 100 shares to sell?

@xeza6937 4 года назад

smartestmoronx19 on Robinhood, the app sells the put option back to the market... you’ll only gain if you have intrinsic value

@damionkibler3493 4 года назад

Dont buy a put if you dont have the shares to exercise it.

@richimaldonado6137 Год назад

So I have to buy the stock in order to get profit from our options ?

@ReluxRE 2 года назад

BOT 1 PUT AMZN at Strike price 3580, expired ITM. I lost internet connection and never wanted to exercise the shares. Does this cost me $358,000 so I can sell it later when the market reopens?

@saiyjin98 4 года назад

If I get the same profit either way, why does it matter if I exercise or not? It seems to me option 1 closes you out of the position and option 2 leaves you open for the same profit. So the decision of whether to exercise or not depends on whether you want to close your position.

@TEAMWLLY 4 года назад

Smooth intro, video quality is improving. Q: What happens when I trade a box spread?

@InTheMoneyAdam 4 года назад

I will make an episode on this. Good question, too, I never get asked this ;)

@kirkstable 4 года назад

InTheMoney have you made an episode on box spreads yet? I’m a beginner/hobby trader and I really want to confuse myself with strategies that are over my head..thanks in advance

@loganmay2105 4 года назад

You turn 5k into -52k

@tylerw1418 4 года назад

Logan May 😂

@liviaaxd8785 3 года назад

hey! i am still kinda new to options trading but have been doing my research and finding success with it for the most part. I do have this question tho: If i want to exercise a option for a stock (that i would potentially want to own anyway), do I need the buying power in my portfolio to 'get' those 100 shares or does the contract get 'converted' to 100 shares of that stock and my buying power remains unaffected? and does this change for calls or puts? thank you!

@ryanjones7681 2 года назад

You need the $ The price you paid earlier is just the price for the contract. Not the stocks

@Xrayaman 4 года назад

Oh is this gonna be a series soon? If so I really love the idea of this.

@InTheMoneyAdam 4 года назад

That's exactly what I'm thinking of doing :)

@noob2630 2 года назад

I I buy a put option for 15$ and the stock is at 10$ but drops to 2$. Can I then buy 100 shares and exercise the put option and profit? Minus the premium of course.

@marcusd4936 3 года назад

So on Robinhood you can see the break even point like this diagram, but sometimes you can buy past the break even point. Does this create a new break even point that more in the money, or am I already past that break even point?

@yungsir2442 2 года назад

you should exercise an itm put option @ expiration if you are trading on margin or have the capital to cover those shares. Hold shares for the long run and use capital as its replacement vehicle

@yungsir2442 2 года назад

for nub who owns 100 shares ;)

@snipex111 3 года назад

So what happens if u buy stock a for 34dollars . the stock tanks to 16. Now i wane buy put option of strike 15 at a premium of 3.20 per option. What happens then. . can i hedge some losses ?

@toannguyen214dallas 3 года назад

So when u excersise a sell put u get 70.00 profit. But do 100 share goes in to your account @35 or 40? Or .......it goes to the buyer too?

@AlbyTheMovieCreator 3 года назад

Wait, I don't get it. It doesn't make sense. I'm talking about the option 1 in your examples at min 12:00. If the Stock Price is 35 and I have 100 shares that I bought at 39.30 and a put at 40, I exercise the put (get 4000 credit) but then I'm supposed to get back 100 shares at 3500, why am I buying it back at 3930? Can I do that? Can I exclude to buy the shares at 3500 but I buy back my already owned 100 shares at the price I paid them for the first time? Wtf it's so trippy, it doesn't make sense at all. I don't really understand

@Kubaaano 3 года назад

His explanation is a little hard to follow. It's correct that when you excercise his example of option 2, you aquired 100 stock at 39.30$, which you then sold at 40$ because you excercised the option. This profits you 70$. Then you can choose to buy back stock at a cheaper price, which is a win. However, you still only gained 70$ profit from the maneuvre (but also protected yourself from the downside from 39.30 to 35, which would've lost you 430$ had you NOT owned the put option). However, considering the premium you paid for the put, it's probably better to sell that put to the market as that will net you greater return, since the option probably has some time value baked in before expiration.

@DCUPtoejuice 4 года назад

automatically executes at expiration if ITM? No risk that you forget to do something with it?

@palmfirevisuals8269 4 года назад

Great vid, Adam! 1 question: in both scenarios, the total P/L will be affected by the premium you paid for the put as well, likely putting both of these scenarios modestly in the red, is that correct? I dont think the put premiums were accounted for in this demo (understandable for simplicity's sake).

@rockyrock2874 2 года назад

Is this when you buy a put and then you exercise it?

@seanbrummett3288 3 года назад

What about a credit spread, exercise or not.

@jchildress7341 2 года назад

So in my case I'm upside down in the deal meaning my average is Let's say 3.5 and current stock price is 2.5 so in this case does that make sense?

@bluntzyd1516 3 года назад

Do you have a video explaining how to exercise selling a call that's on the money?TY

@chaserm26 4 года назад

This helped a lot. Thanks for the explanation!!

@InTheMoneyAdam 4 года назад

No problem!

@kodyfincher7190 4 года назад

Hey Adam I've been loving your videos they have helped me out a lot. Do you plan on making videos about technical analysis?

@InTheMoneyAdam 4 года назад

Thanks man! Yessir, I am working on putting together a series that covers the fundamentals of technical analysis. I know there are a lot of examples of it, but comprehensive information on the subject is lacking on RU-vid. It's a hefty topic, so you can probably expect the first episodes of this series to start dropping later this month or in the beginning of January. Of course, if you have any specific questions about it, I'd be happy to answer them.

@kodyfincher7190 4 года назад

That's great to hear! I've made a lot of successful trades already using what you already thought in your small account challenge. What are the best indicators for swing trading? And what charts do you look at?

@InTheMoneyAdam 4 года назад

I use 50, 100, 200 simple moving averages, 9 exponential moving average, MACD, RSI, VWAP, and I often use ATR to help pick a place to put my stop loss. I’ll throw other stuff on, like stochastics, bollinger bands, and Fibonacci retracements, depending on the context of the trade. Usually the basics work pretty well for me, though. What time frames I look at depends on the expected timeframe of my trade. Is this a day trade? I’ll look at the 5min, 15 min, 30min, and sometimes 1 hr, but rarely higher. Am I expecting this trade to last days? Then I’m probably looking at 1hr, 4hr, 1day, and possibly 1 week chart. Will this trade be on for months? Then 1day, 1week, 1month. For any larger time frames, I’ll look at smaller ones to see what the shorter-term trend is to potentially get a lower fill price.

@makamania808ripz 2 года назад

If I buy a put option at 40strike and share price goes to 35. I don't own any shares. Can I excersize or will I be charged to excersize? Sorry I am new to put options. I'm not sure if I'm supposed to have money to cover or the shares available

@makamania808ripz 2 года назад

I think you answered my question lol. Not to excersize and just sell contract back lol thanks

@constructivesolutions8952 4 года назад

Buying a put will cost a premium up front. Selling a put will credit a premium up front. Is it better to sell the put first when you have 100 shares already?

@herrickinman9303 3 года назад

If you sell a put, then you assume the obligation to BUY, not sell, 100 shares of the underlying stock at the strike price of the put.

@Mysteryp7 4 года назад

hi, I see a option on webull that if i click this. "do not exercise at expiration" in this case if after expiration date and stocks keep goes down. letting me exercise after expiration date for more moneY? thanks.

@Nuschler22 2 года назад

Great video, thanks.

@BeachlifeRealestateNC 4 года назад

Question--- for a stock like( cedar fair -Fun)-- if I bought 1 contract of 30 dollars --- (putt) cedar fair must be at or below 30 dollars) i spent 1200 dollars and the current price of the stock is 12 dollars, so technically im already in the money? the strike price must be below 30 dollars by April 10th--- so that would give the right to sell 100 shares of Fun for 30 dollars?? so if I paid 1 thousand dollars for it and I am able to sell it for 30 dollars that would be 100x 30 = 3000? so essentially my 1000 dollar investment would have tripled? when the option closes and the stock is say 12.5 is that correct could you explain it more....

@tylerw1418 4 года назад

Add the initial investment and the cost of 100 shares minus the premium. Then compare the difference of profit selling at current price. Did you make money?

@poppyhimbo 3 года назад

so, does the strike price just have to hit the price just for a second and you get it? Do you have to act on it while it's at the strike price or lose it? I've watched a few videos about these options but noone explains these things......thanks

@MelodyJacksonPhD 3 года назад

I think you can exercise the option at ANY time, no matter the strike price. The issue is whether it will be profitable given the premium you paid for the option.... AND how to maximize profits OR minimize LOSS.... AND, do you want to sell the options contract you have OR do you want to actually exercise the option as in buying or selling the underlying stock, which them means you have to have the CASH (for the 100 shares) to do so...

@ckysusanliu 4 года назад

what if you dont have the stock but you have a put option ?

@ricauburn9553 3 года назад

If your put option expires itm and you have no shares (or if you exercise the put option and you have no shares), you basically short sell the stock. Your account will show a -100 share position in the underlying stock, as if it were sold at the put option's strike price.

@ckysusanliu 3 года назад

@@ricauburn9553 Thank you so much for responding, really appreciate your help and your videos.

@Brianlovesrice 3 года назад

What happens if I write a cash-covered put at a very low price (i.e. strike $20) and decide to exercise the put I wrote? I end up buying 100 shares at the strike right with my collateral?

@rodm2895 2 года назад

you cant exercise your own put. you sold the contract so you dont have the right to exercise it because you are the seller not the buyer

@slukthong 3 года назад

I didnt understand at first and i still dont now 😅😅😅but i just remember you said "Dont excercise it,just sell ".That is make sense.😅😅😅

@slukthong 3 года назад

I have a question Adam.plese .i bought a call option of MU for $2.45 and the exeration date is one day left and now i loose $240 already.What should i do?.If i excercise it on the experation date , do i have to pay more money for premium?

@tommy-jj6bs 4 года назад

Hey quick question should I sell a covered call option in the money? With the stock having a bullish trend. I watched your video on covered call but I didn’t see a in the money example? Thank you

@InTheMoneyAdam 4 года назад

You’d sell ITM if you were temporarily bearish on the stock. If you sold an ITM call and the stock kept rising, you’d have to sell your shares at the ITM strike when you get assigned. This wouldn’t be good, as you’d be missing out on the gains from the stock moving up. And, if you sold below the average cost of your shares, you’d be at a loss. Instead, you’d hope that the stock price would drop, making your call OTM. At that point you could buy-to-close for a profit or potentially let the call expire OTM, collecting the full premium.

@tommy-jj6bs 4 года назад

InTheMoney thank you so much this was very helpful.

@christophermartin972 3 года назад

I own 100 shares of AMC, can I sell a put just using the stock as collateral. Every single thing I read say it has to be a cash secured put. Any info would help, thanks.

@KordLeKin 3 года назад

Did you find an answer to this? I would also like to know. For instance it would have been great to have an option that let us sell at 70 while it was down here at 35, then we could have doubled up on our shares.

@scottizbeatz 3 года назад

If I bought 100 shares of a stock and its at 14% gain (at .96 when i bought it and now its at 1.14) not a put and not a call but an etf. What would you advise me to do if i am sure the stock will rise with no time limit.

@mr.e5441 2 года назад

buy more shares duh

@toannguyen214dallas 3 года назад

Wait do u keep ur shares or don’t? When u excersise

@jcarter03 3 года назад

If someone wants your help how can they reach you.

@yasssgawwwd5643 4 года назад

Who was the baby you were holding in another video??

@King_Adam_M 4 года назад

Thank u for this information, ur great

@rochjohnson8 4 года назад

what happens if I sell an option that I don't actually own any shares in?

@palmfirevisuals8269 4 года назад

You could be on the hook for a LOT of money- be careful being naked! For 1 call option, you can be forced to sell 100 shares at the strike price if it's ITM. If you don't have 100 shares to sell, you will have to buy 100 for the current higher price, then sell them to satisfy the option contract for a loss. If it's a put that's ITM, you can be forced to buy 100 shares at the higher strike price even though the actual price is now lower for an unrealized loss. If it's a volatile stock with a far-out expiration date, you could easily and quickly be out thousands of dollars for one option contract.

@Bradley-tx6ed 4 года назад

option 1 if bear trend continues but option 2 if bullish

@thedoug4307 3 года назад

I know I'm late to this... I recently exercised an option for a $5 call on NNDM where my break even was $7.25 but the price was $6.80 or so. My sentiment was/is bullish on this stock so I exercised thinking cost basis if I sold my option I wouldn't get full price back because of IV crunch and theta decay (I would've recouped about 1.40 of the 1.93 I paid for it) and at the current price that would've been a higher cost basis than just exercising and paying, essentially $7.25/share would've been about $7.35/share if I sold my option and bought shares. Now, it was on the Tuesday or Wednesday that I exercised and by Friday I was just barely negative on the trade. Was this a good move? Or a risky play? Obviously it worked out so far as NNDM was up huge today.

@thelotusagency5793 4 года назад

I'm a little confused. I decided to sell my put option before expiration because I thought it'd maximize my profit potential. I bought an option for $900 when it was trading at $390, strike price $385. It went down to $365 so I could've made $2500 with a $25 bid price. The stock was trending back up so I sold the option to collect my profit potential at that price. Was that wrong to do?

@billt7283 4 года назад

The Lotus Agency what ever happened with this? I’m curious as I’m trying to learn and this is a valid question

@thelotusagency5793 4 года назад

@@billt7283 I didn't get an answer. Still cruious!

@Jay-vd6vd 4 года назад

@@thelotusagency5793 From What I see, you have done the right thing. You sold for a healthy profit of $25- right!? Your Put option looked to have $11- of intrinsic value as well as $14- of extrinsic value equaling $25- (good job) When you ask, "was that Wrong to do"? it depends on your trading plan before you went into the trade and that should absolutely be established before entering the trade of course

@palmfirevisuals8269 4 года назад

@@Jay-vd6vd Agree, except it looks like the intrisic val was 385-365 = 20, or $2000. There was time left to expiration and some increased Volatility with the price drop which could have pushed the option value to $2500 by adding $500 of extrinsic val.

@CptBlondeBeard 3 года назад

where is the discord?...

@geanaraul7065 Год назад

What is this whiteboard app/site called ?

@InTheMoneyAdam Год назад

Photoshop+Huion H950P tablet

@geanaraul7065 Год назад

@@InTheMoneyAdam thanks.

@jeffreylouism 3 года назад

Great video. I'm a beginner and need some quick advice. I did a Put /Buy on CCIV for 12.50$ on 2/19 for 14$. I have no clue what I did. What am I out and should I exercise early?

@Abikuttan Год назад

How did it go

@timothygoulette1958 4 года назад

Man I'm a dummy for some reason I can't figure out my casino plays !! I trying single leg on apa 10.00$ strike ..exp6/5 .... I am covered...¿?¿???

@tylerw1418 4 года назад

@julietalw 4 года назад

I think i'm finally getting it LOL Thanks

@LV-oh1jg 3 года назад

So if the stock falls to 35, you've made 400 bucks and if the stock goes up to 45, you've also made 400 bucks, cuz you would have 500 capital gains?! So buy puts on volatile stocks?!

@heythatjusthappened 4 года назад

Thought this was MKBHD talking for half the video

@jeremy8715 4 года назад

TTM + Imp. Vol = E.V.

@biffjohnson3354 3 года назад

The more I watch, the more I realize how fkn DUMB I am. In this instance, our guy paid $4000 to make a profit of $70? And that’s if the price DID IN FACT go down (put)? 🤔