Long winded Stock options questions , sorry

[taowave]

Almost every great Momo trader places Oneils book at the top of their reading list...
It obviously doesnt work for everyone,but the majority of Zadehs Stock Trading winners are some form of Oneil,perhaps modified to their temperment..Look at Minervini,Ryan,and Kullamagi...

You are right, "A" book cant each you everything,but reading many books will put you in a far better position to succeed. Its one peice to the puzzle,and its up to you to backtest/simulate what you read....

TOS paper money is OK...at best

 

[Overnight]

...
I think the biggest one was I didnt know you could still sell your position even if your not in the money. Like I had Ford last week.. 2 days left.. It was 25 dollar strike.. it was going for like 23 at the time, so I got a pretty good premium because of time left and the strike being 2 dollars OTM...

So you learned a valuable lesson. Let that lesson sink in with this soundbite...

Pair the two, and NEVER forget it ^^^^^^^^^^^

 

[cmecu]

Almost every great Momo trader places Oneils book at the top of their reading list...
It obviously doesnt work for everyone,but the majority of Zadehs Stock Trading winners are some form of Oneil,perhaps modified to their temperment..Look at Minervini,Ryan,and Kullamagi...

You are right, "A" book cant each you everything,but reading many books will put you in a far better position to succeed. Its one peice to the puzzle,and its up to you to backtest/simulate what you read....

TOS paper money is OK...at best

Ya i will Dont get me wrong , dont want to come off as thinking I dont need to read books to learn. I just dont have time to read them. Hopefully they have his book like online or something so I can enlarge print. My eyes just cant do small font any more in a book. I can, but I get a headache after 30 minutes. I graduate in the Spring, and after that I will probably be looking for work. Regardless I will have more time to read, or watch video, listen audio etc.. But i do have his book saved for the future.

 

[easymon1]

 

[Cabin111]

Buying an option is not analogous to "renting" the stock.

When you own an option, you do not have voting rights, and you do not collect dividends. You cannot sell the stock. And on the expiration date, you do not "give back" something that you "rented" or "borrowed." I'm not sure where you got that analogy, but that's not how options work.

An option is a contract, and if you own a call option, you own the right to buy the stock at the strike price, until the expiration date. You are not renting or borrowing anything.

Also: the guy on the other side of the transaction--the party selling you the option--does not have to own the stock. He has to sell you the stock, at the strike price, if and when you choose to exercise your option. But he does not have to own the stock at the time he sells you the option. If you exercise your option, and he does not own the stock, then in order to fulfill his contractual obligation to sell it to you, he will have to go buy the stock at the market price. Or he can choose to sell the stock short. But that's irrelevant to you, and you won't know what he's doing. The guy's broker and the OCC stand behind the contract. If the guy who sold you the option somehow can't sell you stock, the broker will step in and make it happen behind the scenes.

Before you actually start trading, you need to get your head around some of the core concepts.

I sent you private message.

BMK

I always look for exceptions to the rules. I was a Realtor...I was great at the paperwork, but a poor salesman...I hated to network. Example...On line 84 in the contract, it should read "and" rather than "is".

So here is an example...Can you exercise at any time and at any price during the contracted period??

Someone owns a call on XYZ Tech Corp. It is Saturday at 8 am and the call is expiring out of the money. At 8:15 Apple announces they are buying your company for double the price of the closing. Can you exercise your option?? Yeah, I know...One in a billion. Could it happen?? Has it ever happened??

 

[cmecu]

Yes, you can "Sell to Close" the CFVI for $22.50 and the FUBUx2 for $19. (closing price on friday may be different by tuesday when they open)

I had a question again.. I never did get lucky with these, so they expired today..
the CVFI I had was for 82.50 strike, and it had gotten to like 83 once..
I never have got a chance to do a sell to close.. so today I just wanted to review a close to be ready in the future and make sure I do it right ..
Since this is a contract, and it is 100 shares per contract.. If I wanted to sell it when it got to 83 I could just do Sell to close and market im guessing and it would sell it for what the current value is? But it normally has limit up there to put in your own target number.
What ever I set the limit for it would execute if the value of the stock got up that high?
My question is I would do a sell to close 0.83 ? I put a screenshot of the trade bar.. Where is says Limit Price is the amount I would like to sell it.
At first I actually typed in $ 83 dollars , thinking that is the price I want to sell it.. but when i went to review it.. it said 8300 dollars.. So I can see that is not how you do it since this is technically 100 shares we are talking about.
It just got a little confusing. Or if I wanted to sell it if the value had gotten up to 84.50 I would do a limit of 0.845 ?

 

[cmecu]

Almost every great Momo trader places Oneils book at the top of their reading list...
It obviously doesnt work for everyone,but the majority of Zadehs Stock Trading winners are some form of Oneil,perhaps modified to their temperment..Look at Minervini,Ryan,and Kullamagi...

You are right, "A" book cant each you everything,but reading many books will put you in a far better position to succeed. Its one peice to the puzzle,and its up to you to backtest/simulate what you read....

TOS paper money is OK...at best

I just bought the book, they had it on Kindle , which I can use on my computer so i can see it much better instead of having to squint .
I been in Fidelity Live Webinars they have every day many times a day about different topics, from Beginners to more advanced stuff. I just been watching them talk about the the beginner stuff. It is definitely a lot to take in.

 

[BKR88]

I had a question again.. I never did get lucky with these, so they expired today..
the CVFI I had was for 82.50 strike, and it had gotten to like 83 once..
I never have got a chance to do a sell to close.. so today I just wanted to review a close to be ready in the future and make sure I do it right ..
Since this is a contract, and it is 100 shares per contract.. If I wanted to sell it when it got to 83 I could just do Sell to close and market im guessing and it would sell it for what the current value is? But it normally has limit up there to put in your own target number.
What ever I set the limit for it would execute if the value of the stock got up that high?
My question is I would do a sell to close 0.83 ? I put a screenshot of the trade bar.. Where is says Limit Price is the amount I would like to sell it.
At first I actually typed in $ 83 dollars , thinking that is the price I want to sell it.. but when i went to review it.. it said 8300 dollars.. So I can see that is not how you do it since this is technically 100 shares we are talking about.
It just got a little confusing. Or if I wanted to sell it if the value had gotten up to 84.50 I would do a limit of 0.845 ?

"Sell to Close"
"GTC" (good till canceled)
Enter the price you'd like to receive in the "Price" box.
In the example below, if I wanted to sell now, I'd enter ".70" in the price box. (.70=$70)
".70" is the mid-point between bid/ask. If it didn't fill @ .70, then change to .65 will get it sold as that's the current bid.
Click "Review Order" after you fill in the boxes and you'll see the dollar amount of the sale minus commission ($70-.65=$69.35).

Set the limit price based upon the option price not the stock price.
If you think the stock will rise, you can set a GTC limit for .90 or whatever price you want. This can be set as soon as you buy the call.
If an option has a delta of .5 then the option will rise ~50% as much as the stock so if you'd like to sell if the stock rises $3, then set a limit to sell your option at 1.50 above the current price of the option. Volatility & time decay will be changing the delta so you'd have to monitor it regularly but it gives you some idea for where to set your limit price.

 

[taowave]

I think you need to understand how to trade the underlying before diving into options..

Oneils book is a great outline for a Momo approach..

If you want some inspiration,take a look at

https://qullamaggie.com/

Supposedly, 5k into 80 mil....

I just bought the book, they had it on Kindle , which I can use on my computer so i can see it much better instead of having to squint .
I been in Fidelity Live Webinars they have every day many times a day about different topics, from Beginners to more advanced stuff. I just been watching them talk about the the beginner stuff. It is definitely a lot to take in.

 

[cmecu]

I did my first sell covered call.

Everyone has their own goals when they invest, long term , short term, doing it for retirement, funding for college for kids.. etc..

So today I built up enough courage to try selling a covered call. I have 100 shares of Ford. I wanted to dip my toes into the water. You know even though I have read, and watched endless videos, websites, webinars, one on one with investors at Fidelity about options I still was unsure of exactly what to do. I guess I can learn how it works, but it wasnt until I actually did it and get hands on experience did I start to understand more about it.

I purchased my 100 Ford shares at $17.50 =1750 dollars.. I thought maybe while I am holding them , why not make some money from premiums. When I did my sell to open it was a strike price of $18.50 for $ 0.17 premium with it expiring this Friday.

I looked at the charts to see possible profit and loss. It was loss that scared me at first.. It said unlimited loss. So after I placed it, I thought oh no, I can go broke if this stock takes off in value. So I called and talked with someone again at Fidelity and it wasnt until then, when I could get immediate feedback for some clarification did I finally understand.

It doesnt matter how high the value of the stock goes up. The only thing I lose out on is any profit that I could had made from my purchase price of the Ford Stock when I bought it to the higher value of the stock but now it would be from the Strike price to the higher value. . Now I am aware that most people who buy a call normally dont exercise their right to buy the shares, but instead they just want the profit , the intrinsic value of in the money .. So even if the value of the stock went up to 25 dollars a share I would have to pay them the difference between $18.50 strike and $25 dollar current value. Which is what about 6.50 x100 ~650 ish dollars. So if I wanted , after I paid them 650 ish dollars, I can sell the Ford Shares myself for 2500 dollars , since i had to pay about 650 dollars to the buyer of my option that takes me down to 1850 dollars the strike.. But I still make money from the premium, 17 dollars, and another 100 dollars because I bought the stock at 17.50 and the strike price was 18.50

While talking to the Fidelity guy he said that selling covered calls like this is a conservative way to get rid of a stock you dont want any more but at the same time, possible make some extra money from premiums if the value of the stock never goes up.

Of course the value of the stock could go down, but who cares because you already own it, just sit on it until it goes up in value again and sell it later. Now this was my first time doing it, got my toes wet, got a better understanding and feel less anxious. With my long winded story , if anyone actually read this entire thing, would anyone have any other examples like this where you can possibly make some money from premiums? If I got something wrong let me know.