I'd like to try my first options play but I need some practical advice from someone that has actually done it. My example play would be IVR - it's currently trading at $3.48, and the January 15, 2021 $6 calls are $0.28 right now. Assuming I think it will reach $6 before then, is that a decent call to sell? Or should I be looking closer in than January?
Need Options Advice
William Roberts
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Liam Robinson
>Selling a call
Youre going short on this one user.
Ryder Torres
What do you mean? Should I be buying calls?
Ayden King
You think the underlying is going from 3 to 6 before jan21, right?
But you wanna short a call?
Luis Foster
Yeah, you probably wouldn't want to sell calls. If you think it's going to go to $6 before the expiry date, then you should be buying calls so you can buy at the strike price once it hits $6, so you get a discount, instead of giving away your money by selling calls.
Austin Martin
I guess I don't understand the difference between buying and selling a call. How do I profit by buying something? Because I would be buying the contract(s) of 100 shares and then have the right to sell the shares if it gets up towards $6?
Mason Bell
So in that case, if IVR got up to say, $5, and I wanted to make a profit, I could exercise it at $5, but however many contracts-worth at $5, and then sell them for the market price? I would have to actually buy the 100 shares at the strike?
Dylan Collins
Or short a put, both plays are directionals to your target (6$).
But i would ratter make up my mind on options before i lose a bunch of money, get a option calculator to figure out thinks first (cboe one is decent and free)
Grayson Long
No.
A call is the right to buy, not to sell.
A put is the right to sell.
Again, learn these things ure literally the king of guys the market drains money from
Dominic Peterson
But if he sells a call, he is selling the right to buy. Selling calls is the road to free money anyway w/ those up front premiums.