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X moving retty sharply lower. Time for calls?
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If ur trading options instead of holding til you get assigned u do the following:
Buy calls when u expect price to go up and sell when u achieve ur profit goal.
Buy puts when u expect price to go down and sell when u achieve profit goal.
Of course u need to sell and cut ur losses if things dont go ur way such as if price goes down when u bought a call or vice versa.
Bowl Leader
Generally you’re selling to open cash secured puts or covered calls and you’d buy to close those.
You can buy to open calls and puts and sell to close those contracts. Buying calls and puts, your losses are always limited to initial investment.
With covered calls, you’ll always collect the premium and the shares might be called away for the strike price you sold the contract at, so you may miss upside in the stock. But, the stock you own could also decline more than the premium you collected and you’ll still own your shares if below strike price.
Cash secured puts, you’d lose money if stock is below strike price less premium collected once assigned the shares via someone exercising the contract you sold.
See my profit today
Yes u need to define ur target in advance . Much easier to be successful that way. U always need an exit strategy.
I made $13k today buying and selling calls and puts. I also never hold anything overnight.
Technical analysis
Update see my profit that i made between 9:30am-9:42am on a quick trade on fb 180 calls
Is this right:
1- Buy put contract when current price < strike price and you think current price will continue being less than strike price until exp date
2 - And sell put contract when you don’t think current price will be less than strike price before exp date.
3 - Exercise put contract when you already own the stock and strike price > current price and you want to realize the gain
4 - Buy call contract when strike price < current price and you believe current price will rise before exp date
5 - Sell call contract when strike price < current price and you are not interested in exercising call contract because you believe underlying price will drop after exp date
6 - Exercise call contract when strike price < current underlying price and you believe the underlying price will rise soon
Obliviously simplified, but at a high level?
How are these gains taxes D1? Assuming it’s all short term cap gains that are taxed at the marginal rate? Or can you offset option gains with short term capital losses to net out to 0?
actually you can play tickers that are subject to more favorable tax treatment, like SPX. profits on those options subject to section 1256 treatment are taxed at 60% long term, 40% short term, even if its a day trade. so that can be a significant tax savings.