Thanks Jessica and Tony for this informative video. @30:00 in the bull put spread scenario, under Long Equity Put it should read 1 ABC $100 Put @ $0 and under Short Equity Put it should read 1 ABC $110 Put @ $5, right? Both examples are bullish right? Same thing @36:15 Perhaps bear put spreads and bear call spreads should also be shown for completeness? Or am I missing something here?
[Jess] you are correct! Thank you for paying close attention and finding our typo! This was resolved on the slides sent out post event. Yes, the bull put spread and bull call spread are bullish.
Please some one share a video link for beginners how to open trading screen for options index how to watch options charts with different strike too.thanks
Hi Guys I got a question about sell put. Let said ABC share was at 163. I did a sell put for ABC at strike price $145. Just one day, eventually it down further to 156. Now my question is. Example if it hit strike price will the buyer just exercise the share just within 2 day? And I will need to exercise the 100 share at $145*100? = $14500? Or the buyer can will just close to collect the premium? Next example I not sure when the buyer will exercise? Will he exercise today? What can I do to counter the loses? Or should I close now to cut loses before the buyer can execute the exercise?
Firstly, if the option is OTM, early exercise is almost never going to happen. The buyer of the put would instantly lose money by doing so. Even an ITM option still has low probability of early exercise unless you’re either Very Deep ITM or the option is very close to expiry. In your case unless the stock is well below $145 or its in the last week of expiration, you risk of early assignment is virtually zero.
thanks, been waiting for this type of content. Would like to learn more about what if i have been assigned? What should i do? Do i get margin calls? what is going to happen to my account and how to deal with those assignments?
[Jess] Thanks for the question! There are a lot of variables involved in order to adequately answer this question. If you have been assigned, you must ask yourself if you would like to be long or short the stock. Keep in mind that a short position has unlimited loss potential. It is very possible you will get a margin call, if you do not have the adequate buying power to purchase/ short the underlying then you will get a margin call. Additionally, you may be charged margin interest if you borrow more than the cash you have. It really depends on how your broker handles exercise/ assignments in your account. You absolutely want to address the assignment the following business day. If you overbuy your account as a result of assignment, you risk sell out without any prior notice.
Thanks Jessica and Tony for this informative video. @30:00 in the bull put spread scenario, under Long Equity Put it should read 1 ABC $100 Put @ $0 and under Short Equity Put it should read 1 ABC $110 Put @ $5, right? Both examples are bullish right? Same thing @36:15 Perhaps bear put spreads and bear call spreads should also be shown for completeness? Or am I missing something here?
[Jess] you are correct! Thank you for paying close attention and finding our typo! This was resolved on the slides sent out post event. Yes, the bull put spread and bull call spread are bullish.
Thank you so much for this video and the slides. Definitely informative and helps a lot in terms of risk management. thanks for the effort again.
Please some one share a video link for beginners how to open trading screen for options index how to watch options charts with different strike too.thanks
Hi Guys I got a question about sell put. Let said ABC share was at 163. I did a sell put for ABC at strike price $145. Just one day, eventually it down further to 156. Now my question is. Example if it hit strike price will the buyer just exercise the share just within 2 day? And I will need to exercise the 100 share at $145*100? = $14500? Or the buyer can will just close to collect the premium? Next example I not sure when the buyer will exercise? Will he exercise today? What can I do to counter the loses? Or should I close now to cut loses before the buyer can execute the exercise?
Firstly, if the option is OTM, early exercise is almost never going to happen. The buyer of the put would instantly lose money by doing so. Even an ITM option still has low probability of early exercise unless you’re either Very Deep ITM or the option is very close to expiry. In your case unless the stock is well below $145 or its in the last week of expiration, you risk of early assignment is virtually zero.
thanks, been waiting for this type of content. Would like to learn more about what if i have been assigned? What should i do? Do i get margin calls? what is going to happen to my account and how to deal with those assignments?
[Jess] Thanks for the question! There are a lot of variables involved in order to adequately answer this question.
If you have been assigned, you must ask yourself if you would like to be long or short the stock. Keep in mind that a short position has unlimited loss potential.
It is very possible you will get a margin call, if you do not have the adequate buying power to purchase/ short the underlying then you will get a margin call. Additionally, you may be charged margin interest if you borrow more than the cash you have.
It really depends on how your broker handles exercise/ assignments in your account. You absolutely want to address the assignment the following business day. If you overbuy your account as a result of assignment, you risk sell out without any prior notice.
Tony Zang