So I bought an AMZN strangle before market close today, and the put was bought at a strike of 1767.5 with tomorrow as expiration date. After market close, AMZN rose $60ish. Please excuse my ignorance. I expect my put to show a loss because the stock rose and its probability of getting down to $1767.5 is now increasingly low? But my P/L Open for the long put leg alone is shown as a positive gain of $426. Can someone explain to me? Something about the implied volatility? The greeks? What else? Trying to understand and make the numbers tie. Please shed some light on which numbers I should look at to help me get to the $426. Thanks.
Why my long put is showing a gain when stock rose?
- Thread starter ETraderJoe
- Start date
Robert Morse
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Your P/L today is based on the 4pm ET close of the options, not where they will open tomorrow. You will see your loss in the morning after 9:30am ET.
Are you sure? The P/L Open numbers in td ameritrade are responding to the after-market changes right now though and the numbers are constantly changing. Looks like they are not based on the static number at market close. Also, I did a similar strangle with FB yesterday, and the numbers were shown accurately after market close. If this can’t be explained, maybe it’s a bug in the software...
There is no such thing as accurate options pricing after or pre-market. As Robert suggested, wait until the position is quoting after the market open in the morning.
- What was the strike for the call?
- My guess$1850.
- The 1767.5P/1850C strangle would cost about 60.00.
- As of now the 1850 call is worth about $20.00.
I suspect this thread isn't legit and the OP never made the trade. Just like the repair strategy for nflx short put thread.
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Option pricing is a function of strike, underlying price, and implied volatility among other variables. Sometimes an option can increase in price even if time to expiration has decreased and price has moved away from the strike based on an increase in implied volatility. With the case of Amazon, IV should be collapsing tomorrow. Your put will likely be near worthless at open unless something happens overnight...maybe go on Twitter and ask @RealDonaldTrump what he thinks of Amazon's earnings.
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Sounds like Robert is right; or that is the ask price of your put, not the bid/selling price.[2]Plenty of in -accurate quotes with anything lower volume/bigger bid ask. Sorta like one REALTY appraiser said, ''asking price tells you what it is NOT worth''
PS Even real/super liquid stocks get out of whack pre market/post market.......