Wednesday, April 5th, 2017

Call Options: I’m a beginner?

I understand the difference between a sale and purchase and opening to the purchase and sale of yada yada. . . but I s? am filling new reality and strategy. . . as? that perm? Tanma have a question for you all: Ignoring the prices charged by my intermediation? n comercioEstoy looking for the HOV (Hovnanian) is now trading at $ 3. 48En terms of call options at an exercise price of $ 3. A price of 50 (premium) $. 10 (x 100 = $ 10. 00). . . As? to say that buying a $ 10. 00. And the price is fired or $ 3. 55. Exercise (before maturity, s? Say what I do). I can buy 100 shares of the seller of the contract for $ 3. 50 (x 100 = $ 350. 00). My gain is 3. 55-3. 50 =. 05 (which is 1. 48%, not much) less the premium. ? No?? There another way I can do this, for example, the contract is now worth $. 20 (s? That can not be right, but for example). . . ? I can sell the contract itself to someone, make a difference between what page? for it and what to pay? for it? Is this too confusing? It may not have control over the choices I did. Please ayuda.Agradezco any and all help: Please indicate your background knowledge / profession? Nyc? Mo know the information? N, as? that s? is not s? information you give me some joe? n.-JALT

Comments

4 Responses to “Call Options: I’m a beginner?”
  1. Common Sense says:

    I trade options, yet have no idea what you’re getting to.
    I never hold to expiration…. I’ll sell at my profit target or at least before Theta starts to move fast.

    If an option is at $3.50… the total cost is $350 plus commission (for me commission that would be $1.50). A 5 cent increase would be $5… not worth the risk.

    I buy and sell the same contracts sometimes within hours….. usually days or weeks. As I said I never hold to expiration…. that would be… not the smartest way of trading.

    I also sell PUT’s as a trade. But only on stocks I’d be happy to own.

    I think you need to read some books. Make sure you understand “The Greeks” before you do any Option trading. Options are pretty dangerous. If you don’t fully understand them, stay clear.

  2. Jim Z says:

    Beware, 80% of option traders lose money. Your analysis on the 1.48% is correct, (subtract commissions). Yes, you would sell your option at $.20 and now your profit is 100% (less commissions). You would just close out your trade, and sell the option that you bought. Options are seldom used to buy the option you bought as an opportunity to buy the stock at a lower price once it has gone up.

  3. Dr. Duke says:

    Generally, traders sell the option if the price direction they predicted occurs, instead of exercising the option.

    Option trading is not as easy as it is often portrayed. It is more difficult than trading stocks and that isn’t easy either. Be sure to get the proper training whether you teach yourself via books, DVDs and paper trading or formal classes.

    My business trains people to trade stocks and options. You can find a lot of free information on my web site below.

  4. Rolf Golf says:

    Yes, just sell the options. There is no need to exercise the option in order to take profit. Just sell it at the higher price when the underlying goes up will do. In fact, that’s what most professional options traders do.

    In fact, if you did the exercise like you mentioned just now, you would instead lose money as it is LESS premium so the actual breakeven point at expiration or exercise is $3.50 + $0.10 = $3.60 . By exercising the call options when the stock is at $3.55 will make you a $0.05 loss.

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