Simple Option questions from a noob.

D

DSANTANA

Hi, I'm new here and this doesn't look like a "noob" forum for new people like me to ask questions. Heck, I might be on the wrong website forum totally. I just wanted to know if I can do what I'm about to do with in getting into stock trading options.

I just uploaded $500 to my eOption account I started. i wanted to invest the $500 into a company I know of that has a steady quarterly trend. I was curious if I brought 2 options on it (200 shares) for a asking price of less than $4 an option if I don't use my option to sell before it expires in time some how am I forced to buy those 200 shares ($11,400)?

Also if I do a 3day option how much time I should estimate from the time i decide to sell to said stock actually being out of my hands once I agree to?
 
DSANTANA said:
Hi, I'm new here and this doesn't look like a "noob" forum for new people like me to ask questions. Heck, I might be on the wrong website forum totally. I just wanted to know if I can do what I'm about to do with in getting into stock trading options.

I just uploaded $500 to my eOption account I started. i wanted to invest the $500 into a company I know of that has a steady quarterly trend. I was curious if I brought 2 options on it (200 shares) for a asking price of less than $4 an option if I don't use my option to sell before it expires in time some how am I forced to buy those 200 shares ($11,400)?
More...

If I understand you correctly, I think you are dealing with Put Options? If that is the case, you would only be forced to buy the stock IF you have short sold Put Options and the Options were what's called exercised against you due to the price of the stock dropping to lower than the strike price of the Option that you short sold. If you have bought Put Options, you wouldn't have this risk as the Put Option gives you the right to sell the stock that you already have ONLY IF you want. You are NOT required to sell your stock by exercising the Put Options that you bought. I would suggest you to read more on Options. You can find plenty of material on Options on the Internet.
 
I been reading and watching videos on put and call options all week and still dont understand if i can do this purchase i want to do. Heres the story:

I found a trend of AIG that i think shows them making quarterly rises and drops. I'm pretty sure the stock will be rising in the next few weeks. I want to purchase a call option saying by the end of april the strike price will be higher than 55. I think its going to be in the 60s. I want to buy 2 options (200 stock shares). Its going to cost me less than $400 to buy the options. The option expires at the end of april but i plan on selling my option before the end of April. My question is would i be forced to buy the 200 shares if i wait until the option expires?

Maybe im using the wrong terminology? If i plan on doing as stated should i purchase a put?
 
DSANTANA said:
I been reading and watching videos on put and call options all week and still dont understand if i can do this purchase i want to do. Heres the story:

I found a trend of AIG that i think shows them making quarterly rises and drops. I'm pretty sure the stock will be rising in the next few weeks. I want to purchase a call option saying by the end of april the strike price will be higher than 55. I think its going to be in the 60s. I want to buy 2 options (200 stock shares). Its going to cost me less than $400 to buy the options. The option expires at the end of april but i plan on selling my option before the end of April. My question is would i be forced to buy the 200 shares if i wait until the option expires?

Maybe im using the wrong terminology? If i plan on doing as stated should i purchase a put?
More...

Ok now that I understand your question better, the answer is a definite NO. The option only gives you the RIGHT to buy or sell the security, in your case buy but you are NOT obligated to buy if you don't want to. You won't be forced to do anything when the option expires.

Read this: https://www.fool.com/investing/options/options-the-basics.aspx

It will help you understand better what are Call and Put options.
 
Noob Question Here Please

is there a way to find out what the AAPL Put Option would cost to buy for a delta around 40 to 50 for the points in time numbered on the chart?
delete AAPL.png
 
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