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Buying and selling puts & calls

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  • Aug 23rd, 2021 4:30 pm
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[OP]
Deal Addict
Dec 6, 2008
1421 posts
503 upvotes

Buying and selling puts & calls

Just beginning to get into options and I do not want to get into covered calls, etc. yet.

Can I buy premiums for either a put or a call hold it for sometime and sell say closer to strike date (assuming the premium could go higher closer to the strike date). I tried to Google and look up in TD, but everyone just talks about covered calls.
4 replies
Member
Mar 31, 2013
273 posts
1030 upvotes
Courtenay, BC
google "put and call options", you will get hundreds of sites to research to your hearts content.
You can do as you suggested, but the closer to expiry the less the premium is worth (called time decay)....from what I have read, most options expire worthless because they are out of the money. Buying options are often used as a hedge, unless you have a real strong opinion that there will be a big move....and the big boys know far more about those things than you or I ever will.
It's like life, buying options is a gamble (high risk, possible high reward), selling covered calls is safer but lower reward
Deal Fanatic
Jan 19, 2017
7456 posts
4348 upvotes
itemsale2003 wrote: Just beginning to get into options and I do not want to get into covered calls, etc. yet.

Can I buy premiums for either a put or a call hold it for sometime and sell say closer to strike date (assuming the premium could go higher closer to the strike date). I tried to Google and look up in TD, but everyone just talks about covered calls.
Just a basic info about buying & selling call/put options. assuming the premium could go higher only if the stock price goes in the direction for the option, i.e. stock price higher for call or lower for put. if the stock prices goes in the opposite direction(i.e. stock price goes lower for call or stock prices goes higher), then the option will go down.
[OP]
Deal Addict
Dec 6, 2008
1421 posts
503 upvotes
ml88888888 wrote: Just a basic info about buying & selling call/put options. assuming the premium could go higher only if the stock price goes in the direction for the option, i.e. stock price higher for call or lower for put. if the stock prices goes in the opposite direction(i.e. stock price goes lower for call or stock prices goes higher), then the option will go down.
Correct, but I guess my question is buying and selling those premiums on the exchange is possible. It is not like you will lose 100% of your premium due to non-exercising of the option
Deal Fanatic
Jan 19, 2017
7456 posts
4348 upvotes
itemsale2003 wrote: Correct, but I guess my question is buying and selling those premiums on the exchange is possible. It is not like you will lose 100% of your premium due to non-exercising of the option
If yo can buy, then you can sell the options on a stock exchange. you will lose 100% of your premium if you don't sell or exercising the option before expiry day.

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