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.
Hunter Jones
Well I'm trying to learn them that's why I'm asking before I spend any money.
So I should...sell puts? Buy puts? What are people talking about when they say they've made money from calls, then? What's the difference between buying and selling a call if a call is the right to buy?
I hope this makes it clear why this is so confusing to anyone that hasn't done it
Ian Lopez
Were not google, sub 80iq lets should hang.
Daniel Lee
Fuck dude, use some common sense.
>I don't have any shares of X stock
>I buy a call, therefore I am buying the right to buy X shares of stock
>I do have shares of X stock
>I sell a call, therefore I am selling the right to someone to buy X shares of stock
Truly not going to make it if you literally can't even grasp the most basic language.
Jaxson Long
Oh come on, this stuff is convoluted as fuck and you know it. I wouldn't be asking on here if I hadn't already done some cursory research outside of Zig Forums, and it's confusing jargon to someone that hasn't actually gone through with it or, y'know, had people that have already done it explain it to them in more practical terms.
How are people making money off of selling naked calls? I refuse to believe the people on Zig Forums making money on options actually have the cash to be buying shares in multiples of 100. And if you don't actually have to buy/sell the 100 shares then no one has explained that to me so far
Isaac Gutierrez
You can believe whatever you want, but I literally have 2 sell call options going right now. Some people aren't broke dude. I don't know what else to tell you.
Robert Hernandez
Great glad I came to the business and finance board for actual advice on trading options. What I really love is how people on here actually DO know how to do what I'm asking about but for some reason refuse to actually explain it
Liam Collins
Your first mistake was coming here for advice
Alexander Bailey
You ask people for advice, which normally you'd trust from a credible source, but then assume that the people equipped to give you that advice are too poor to have stocks in multiples of 100? What a fucking prick.
Jacob Davis
selling a call means that you need to own 100 shares at IVR current price that would mean 34k then you sell that to collect premium in this case 28 dollars. So you would be collecting 28 dollars for 34 in shares....
now if you mean by a call that means that you are buying a option with the expection that it will reach 6 dollars withing that time period or in the money to have the call worth more than what you bought it for. I wouldn't be looking into real estate anyways. Try to by options into something more volatile. something like SPY, Microsoft, Walmart, Nvidia, AMD, Apple these are examples of good options to bet upon if you choose out of the money options they can be pretty cheap and can get some profit if you time it correctly. Hopes this helps.
Jacob Hernandez
>intelligence is material wealth
Seriously? Again, I really don't believe that the people on here making money from options plays are ALL able to afford 100 shares of the underlying stock. And again, no one is even trying to begin explaining whether or not the 100 shares even have to be bought or sold. It's confusing and you know it but instead of helping you just want to talk shit
There are plenty of people on here that will give actual advice and I see people talking specifics about options all the time. For some reason though when a specific question is asked everyone is a cocksucker
Jaxon Reyes
Because it's not our job to educate you. A lot of us have lost a lot of money learning how this works. It's not up to us to simply hold your hand. We've payed our tuition. Are you going to pay me to teach you how this works? Of course not. So why do you just expect stuff for free? You don't get to join the officers club until you've done your time in the trenches. I literally explained to you here how to use the language, and the only thing you did was bitch about it being confusing jargon. I have a coinbase wallet if you want to toss some cash my way, but you won't so why would I just sit here and baby you?
Jacob Baker
Finally thank you. Do I actually need to own shares of something like AMD to trade options on it?
Mason Foster
user what do you think about buying and selling naked options on expiration date when their delta is 1?
Asher Gonzalez
>I've got mine so fuck you
Thanks boomer, eat a fucking dick. Why are you even in the thread if you don't want to actually help? Oh, to talk shit
Ryan Howard
I did fucking help you. I explained the difference between buying and selling calls/ puts. Just because you're dumb as shit and don't understand the "jargon" isn't on me. Also, I'm 27 you fuck. I'm literally the tail end of the millenial generation.
I think it's dumb and I only sell covered calls for inflated prices that I know will never sell. That way I just keep making the premium month after month. A $200 premium that never gets exercised is a free $2,400 a year.
Juan Kelly
Only if that is your collateral. Think of it this way, if you sell an option for the premium, then you are required to have the collateral on hand, whether that be cash for selling puts or stock for selling calls. When buying an option you only need money for the premium. Also
>intelligence is material wealth
I didn't say that, but really, you'd think that someone would want advice from someone else they thought actually had aptitude in a particular topic, not just knowledge. Having made money, especially considering this is a finance board, implies aptitude.
Adam Mitchell
>not my fault if you don't understand the jargon
>not my fault if I can't use anything aside from the standard options vocabulary to explain it instead of using practical terminology
What you said in doesn't explain how to make money off of options, it just restates definitions.
Somehow in you're able to explain a strategy involving selling calls to just make the premium, but somehow you can't clue me in. You see how you're being a dick right?
Gavin Hughes
I just fucking told you how to do it lol. Buy 100 shares of something, put up a sell call you get an upfront premium. If the strike price reaches what you sold the call for it will be exorcised. If it doesn't, the call expires and you get to keep the premium. That's it. That's all there is to it. There's no fucking magic wand, or inside trade secrets. I am literally putting up a sell call, collecting the premium and if it's not exercised, I put up another sell call and collect the premium. For fucks sake dude, this isn't some kind of gotcha riddle. I told you exactly what I did. Again, you don't understand it, and somehow that makes me the bad guy. Fuck you retard.
Adam Kelly
I have to clarify this is a strategy for day trading options. Your example seems very attractive for a long term trade though. I don't want to come across like I want to be spoon fed, but would you mind providing literature that illustrates how to execute your trade or an example?
Luke Anderson
I don't have any literature. See
I'll use WKHS as an example. I bought 100 shares of WKHS. WKHS price right now is ~$16. I put up a sell call for $23. I get $230 of that upfront. I know it's probably not going to reach $23. So the sell call sits there for a month and it doesn't hit $23. So the call expires, but I still keep the $230 premium. That's it. That's all I do. If it does happen to reach $23, the call is exercised and I make $2,300 plus the $230 premium that I already recieved. I buy another 100 shares of something and the process repeats.
Jose Ramirez
Thank you very much user, as someone who is new your example helped a lot. I am gonna incorporate this strategy in the future.
Ayden Torres
I want my (You), OP
Cooper Hughes
If you don't know the difference between buying and selling a call/put then you need to do more studying before you wreck yourself.