selling puts- beginner

[kingkong76]

Hello.
Thanks in advance.

I’m trying to figure out how options work and I have a question.

I’m looking at May 22.5 puts for SU.
They're at 1.15 Today.
Can I buy them today and sell them next week or so (hopefully at a profit) with no further obligations?
ie. I can just sell it back to the market at 2.00 or 1.00,
Is that how it works?
Or am I on the hook for something when I unload them?

I think the original writer of the put is obligated, then the person I sell the put to is on the hook for something right? And hopefully I've made a profit and all I have to do is pay commissions?

I do not own the underlying stock.

P.S. I’m not buying anything until I get all this straight. I’m just trying to learn.
Thanks!

 

[dagnyt]

Quote from kingkong76:

Hello.
Thanks in advance.

I’m trying to figure out how options work and I have a question.

I’m looking at May 22.5 puts for SU.
They're at 1.15 Today.
Can I buy them today and sell them next week or so (hopefully at a profit) with no further obligations?
ie. I can just sell it back to the market at 2.00 or 1.00,
Is that how it works?
Or am I on the hook for something when I unload them?

I think the original writer of the put is obligated, then the person I sell the put to is on the hook for something right? And hopefully I've made a profit and all I have to do is pay commissions?

I do not own the underlying stock.

P.S. I’m not buying anything until I get all this straight. I’m just trying to learn.
Thanks!

When you buy an option you are NEVER under any obligation to do anything.

the option owner has rights, not obligations.

Yes, you may sell an option that you bought. It may be for a profit. It may be for a loss. You may sell any time BEFORE the close of business on expiration Friday.

No. When you sell the option (that you own) the buyer is under no obligations (or 'hooks'). Only someone who is short an option (sold without owning) is obligated. No one else has obligations

It does not matter whether you have a position in the stock. Only your broker cares - for margin purposes.

Mark
http://blog.mdwoptions.com/

 

[kinggyppo]

Your thread is confusing, your title is selling puts then you talk about buying them. Nothing wrong with a hypothetical trade but let us know what it is. eg

long 10 su may 22.5 puts @.90

Your delta is .33, you may want to look at the 24 puts trading @1.55 for a delta of .49.

I would not be looking to be short SU, if oil blows up and it can as we move into summer, you can get hurt with SU as it is high beta with respect to oil. Remember this stock traded at $120 less than a year ago. I would be accumulating here under $20 for shizzle.