Dan any comments advisability of splitting the difference between bid and ask, and attempting to buy your option(s) with a limit order approximately half way between, when the spread is, perhaps, 10 cents or more?
Hello Dan, I’m new to options. I was on my brokerage account exploring how to place option spreads, but couldn’t figure it out. Is it because I’m new and my brokerage doesn’t allow me to place spread orders? or there is a process to it? Could you please go over spread orders in one of your next videos. thank you
I am brand new to trading options. This tutorial is exactly the resource I needed for learning option info. Please continue to educate us regarding basic option info.
Thank you so much!
Emmaleigh
Dan: This is so cool! I’ve been trading with you and learning through SMM, great Forum by the way, for a couple of years now, in fact, I signed up for the original beta OMM but didn’t feel comfortable with my level of knowledge so I opted out. Now I’m back in and must say that this new site is a major improvement!!!!
I just watched the basic trading an option video and learned a bunch, it filled in a lot of blanks for me.
Thanks so much! Keep up the good work. Looking forward to more involved strategic trading tactics.
Hi Dan this was extremely helpful! After buying the call what happens? For example say I buy a call option and it becomes profitable and I want to sell. Can I sell it like a stock? Or would I have to wait until the contract is over?
Short answer is – you can sell the call anytime you want to. It trades just like stock shares would (except with the higher volatility that comes with trading options).
There are exceptions – for example, if you bought an option as part of a spread, selling it would leave the other half of the spread on your account, and that changes your responsibility.
As an example, I’ll use the Amazon 240/245 bull put spread that Dan recently closed.
We sold the October 245 puts, and bought the October 240 puts as protection.
If you decided to sell the 240 puts, because they were profitable, you would have to have enough cash or margin in your account to cover holding the October 245 puts as a “naked” position – in other words, be able to have 100 shares of Amazon put to your account for each put that you had sold. That’s an awfully large number, given Amazon’s current price.
So unless the option you bought is part of a spread, or is a form of protection as part of another option trade, then you can sell it anytime. You do NOT have to wait until the expiration date. In fact, many times it is advisable to NOT wait – lock in the profit, close the trade, and move on to the next one.
Dan any comments advisability of splitting the difference between bid and ask, and attempting to buy your option(s) with a limit order approximately half way between, when the spread is, perhaps, 10 cents or more?
Hello Dan, I’m new to options. I was on my brokerage account exploring how to place option spreads, but couldn’t figure it out. Is it because I’m new and my brokerage doesn’t allow me to place spread orders? or there is a process to it? Could you please go over spread orders in one of your next videos. thank you
what is the advantage of buying calls deep in the money?
Thanks Dan! Very basic but nice to understand price between bid and ask.
GOOD STUFF
Niced to know how, but being very elementary, WHY?
I am brand new to trading options. This tutorial is exactly the resource I needed for learning option info. Please continue to educate us regarding basic option info.
Thank you so much!
Emmaleigh
Dan: This is so cool! I’ve been trading with you and learning through SMM, great Forum by the way, for a couple of years now, in fact, I signed up for the original beta OMM but didn’t feel comfortable with my level of knowledge so I opted out. Now I’m back in and must say that this new site is a major improvement!!!!
I just watched the basic trading an option video and learned a bunch, it filled in a lot of blanks for me.
Thanks so much! Keep up the good work. Looking forward to more involved strategic trading tactics.
Hi Dan this was extremely helpful! After buying the call what happens? For example say I buy a call option and it becomes profitable and I want to sell. Can I sell it like a stock? Or would I have to wait until the contract is over?
Short answer is – you can sell the call anytime you want to. It trades just like stock shares would (except with the higher volatility that comes with trading options).
There are exceptions – for example, if you bought an option as part of a spread, selling it would leave the other half of the spread on your account, and that changes your responsibility.
As an example, I’ll use the Amazon 240/245 bull put spread that Dan recently closed.
We sold the October 245 puts, and bought the October 240 puts as protection.
If you decided to sell the 240 puts, because they were profitable, you would have to have enough cash or margin in your account to cover holding the October 245 puts as a “naked” position – in other words, be able to have 100 shares of Amazon put to your account for each put that you had sold. That’s an awfully large number, given Amazon’s current price.
So unless the option you bought is part of a spread, or is a form of protection as part of another option trade, then you can sell it anytime. You do NOT have to wait until the expiration date. In fact, many times it is advisable to NOT wait – lock in the profit, close the trade, and move on to the next one.
-Tim