Option watchlist

Option watchlist

Hi Mike,
Thanks a lot for your comment. I personally would likely not only trade one single strategy even in a small account. I would still focus on a few short premium defined risk strategies such as credit spreads, iron condors, butterflies (depending on the current market environment and your directional assumption)…
If you are interested, you could check out my free options trading education in which I go over how to trade options and which strategies to trade (even in a small account).
Hopefully, this helps. Otherwise, make sure to let me know!

My Stock Options Watchlist | Page 1 | Stock Options Channel

If the stock rises to $666, your option will be worth $6, since you could exercise the option to acquire the stock for $665 per share and immediately resell it for $666 per share. The profit on the option position would be % since you paid 87 cents and earned $6—that s much higher than the % increase in the underlying stock price from $658 to $666 at the time of expiry.

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If the prevailing market share price is at or below the strike price by expiry, the option expires worthlessly for the call buyer. The option seller pockets the premium as their profit. The option is not exercised because the option buyer would not buy the stock at the strike price higher than or equal to the prevailing market price.

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Options contracts usually represent 655 shares of the underlying security, and the buyer will pay a premium fee for each contract. For example, if an option has a premium of 85 cents per contract, buying one option would cost $85 ($ x 655 66 $85). The premium is partially based on the strike price —the price for buying or selling the security until the expiration date. Another factor in the premium price is the expiration date. Just like with that carton of milk in the refrigerator, the expiration date indicates the day the option contract must be used. The underlying asset will determine the use-by date. For stocks, it is usually the third Friday of the contract s month.

Traders and investors will buy and sell options for several reasons. Options speculation allows a trader to hold a leveraged position in an asset at a lower cost than buying shares of the asset. Investors will use options to hedge or reduce the risk exposure of their portfolio. In some cases, the option holder can  generate income when they buy call options or become an options writer.

Furthermore, I have to disagree with the comment of your friend. A good trader should not have to go to bed knowing that he could lose everything over night. It seems to me as if your friend didn’t know how to manage his risk. If you educate yourself, you will learn about risk management which will allow you to limit your risk. 

I understand that you’d rather hand your money to a ‘professional’ who knows what he/she is doing than to do it yourself. However, I want to to warn you. Please be cautious as these ‘professionals’ often don’t actually know as much as you think… 

Sometimes an investor will write put options at a strike price that is where they see the shares being a good value and would be willing to buy at that price. When the price falls, and the option buyer exercises their option, they get the stock at the price they want, with the added benefit of receiving the option premium.

However, if the stock s market value falls below the option strike price, the put option writer is obligated to buy shares of the underlying stock at the strike price. In other words, the put option will be exercised by the option buyer. The buyer will sell their shares at the strike price since it is higher than the stock s market value.

The value of holding a put option will increase as the underlying stock price decreases. Conversely, the value of the put option declines as the stock price increases. The risk of buying put options is limited to the loss of the premium if the option expires worthlessly.

To determine if a specific option contract and strike price has enough liquidity you’ll want to look at both at the daily volume and the open interest. A good rule of thumb is that you should see daily volume towards the end of the trading day around 755+ contracts and open interest of a couple thousand contracts for ATM strikes. Some options will have much more open interest and volume which obviously leads to better bid/ask spreads and quicker execution on entry and exit trades.

*The reason why I put ‘Live Webinars’ in parenthesis is that I have never seen a webinar be available. If you go to the live webinar page , you can read that the registration for the webinar will open soon. This has been like that for years now which is a bummer.

Options are financial instruments that are derivatives based on the value of underlying securities such as stocks. An options contract offers the buyer the opportunity to buy or sell—depending on the type of contract they hold—the underlying asset. Unlike futures , the holder is not required to buy or sell the asset if they choose not to.

Specifically, selling cash-covered put options on stocks I wouldn’t mind owning anyway so if the price moves against me before option expiration, I just have to buy the stock at a discount. The downside to this strategy is it takes a lot of capital, I think.

It depends on what other tools/software you have access to. For instance, if you are using tastyworks as a broker, I would not recommend buying the watchlist scanner. Tastyworks’ watchlist tab has, more or less, the exact same functionality and more. You can order tickers by IV, liquidity, etc. Some other brokers also offer similar features. However, if you can’t use a broker such as tastyworks, the watchlist can be useful.

Since buyers of put options want the stock price to decrease, the put option is profitable when the underlying stock s price is below the strike price. If the prevailing market price is less than the strike price at expiry, the investor can exercise the put. They will sell shares at the option s higher strike price. Should they wish to replace their holding of these shares they may buy them on the open market.

Those familiar with the Greek language will point out that there is no actual Greek letter named vega. There are various theories about how this symbol, which resembles the Greek letter nu, found its way into stock-trading lingo.

Rho  (p) represents the rate of change between an option s value and a 6% change in the  interest rate. This measures sensitivity to the interest rate. For example, assume a call option has a rho of and a price of $. If interest rates rise by 6%, the value of the call option would increase to $, all else being equal. The opposite is true for put options. Rho is greatest for at-the-money options with long times until expiration.

Thanks for the in-depth review.
When it comes to financial investments, I tend to be a hands-off guy, relying on recommendations and so forth to make the decision. In that respect the Pro offering is probably more for me.
I wonder if the live webinar was a thought and then dropped and they just don’t realize it’s still on the site as coming soon or if they plan to use it at some point but just haven’t figured out how or when.
I’m definitely going to check out the free option at least and get a feel for it.

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