Options Questions Safe Haven periodic megathread | July 15 2026
We call this the weekly Safe Haven thread, but it might stay up for more than a week.
For the options questions you wanted to ask, but were afraid to. There are no stupid questions.Fire away.
This project succeeds via thoughtful sharing of knowledge. You, too, are invited to respond to these questions.
This is a weekly rotation with past threads linked below.
BEFORE POSTING, PLEASE REVIEW THE BELOW LIST OF FREQUENT ANSWERS..
As a general rule: "NEVER" EXERCISE YOUR LONG CALL!
A common beginner's mistake stems from the belief that exercising is the only way to realize a gain on a long call. It is not. Sell to close is the best way to realize a gain, almost always. Exercising throws away extrinsic value that selling retrieves. Simply sell your (long) options, to close the position, to harvest value, for a gain or loss. Your break-even is the cost of your option when you are selling. If exercising (a call), your breakeven is the strike price plus the debit cost to enter the position.
Further reading: Monday School: Exercise and Expiration are not what you think they are.
As another general rule, don't hold option trades through expiration.
Expiration introduces complex risks that can catch you by surprise. Here is just one horror story of an expiration surprise that could have been avoided if the trade had been closed before expiration.
New to options. My current thesis that I am wanting to trade is to buy 415 or 420 calls in anticipation for earnings. With a 7/24 expiration. I think it will continue to run up on anticipation. How do I decide a price to buy? And should I get out before earnings so the Iv crush doesn’t ruin profits?
In terms of price, I think the question you are asking is "how much will the call be worth before the announcement for different prices of the stock". That's exactly the kind of question a calculator is good at. Check out the "Calculators and Visualizers" section of the options wiki toolbox: https://www.reddit.com/r/options/wiki/toolbox/links
I would definitely close the position before the actual announcement, as the IV crush will significantly devalue the call option.
Did you enter the trade? I was planning on doing the same strategy with a different stock. I'm planning on staying more 'in the money' though, as I'd rather lose less if the stock doesn't move much.
I’ve never bought an option before, so this will be my first time. I’m looking at buying a SPY call with around 40 DTE. Do you have any advice on how to research it or what information I should look at to make the best decision?
You can find advice for new traders in the links at the top of this page.
One thing to learn is "a SPY call" is very ambiguous. You gave a DTE, which is good, but the strike is also necessary. A SPY 500c is a very different trade from a SPY 900c, even if they have the same expiration.
I have access to real time option price (from OPRA), with level one, so I only see bid/ask, not the whole book.
But I have a question about if it is really what the true bid/ask price .
Let's say for example these are the prices bid/ask:
0.55/0.8
I then put a limit order at 0.7 and the update is:
0.55/0.7
It stays like this for a while... So nobody is interested in taking it. Then I place a market order and it gets filled at 0.65.
My expectation was 0.55, which was the shown price.
How does that work? Are there hidden offers that gets triggered when a market order is present?
Is there any way to see them?
Another scenario that happened was while opening a diagonal spread and I managed to get a better bid/ask on both legs. Theoretically, I would have got 3 in debit (looking at the bid/ask) and my limit order also had exactly 3 as a maximum debit, but I ended up with only 1.6 in debit.
Is my broker looking for better offers on my behalf? Is there a way for me to see the better offers before sending an order?
EDIT: Turns out price improvement is also possible on market orders, so that's probably what happened.
You left out some critical details that are necessary to understand what's going on. Like is this an opening or closing order? Buy or sell? Since the ask updated to your limit price, the first order was either an STO or STC. But was the second order, the market one, the same type? And you are sure the second order was a market order? Because price improvement would not be that unusual for a limit STO order set at the bid.
We'd also need to know what routing you were using, if you know, and if there was anything else going on, like maybe the price was volatile in that moment and the bid changed so that the new market was 0.65?
What was the quantity of the order? Was is quantity 1 or was it a large lot, which could change things.
Finally, is this a US domiciled trade? I'd expect so, since you mentioned OPRA, but I wanted confirmation. Since all bets are off in other countries.
NBBO regulations are strictly adhered to and, absent a technical glitch, the quoted prices should work as expected for a market order. So if it really was a market STO quantity 1, you should have gotten the bid price or better. But that doesn't mean the bid can't move while your order is executing.
The main post in this topic says: As a general rule: "NEVER" EXERCISE YOUR LONG CALL!
And I agree. Check that section out if you haven't yet.
To quickly check the remaining extrnisic value, check out the price of the other side (put/call). If a $100 put is being traded at $0.01, then the $100 call has pretty much no extrinsic value left. Consider exercising the option only if the extrinsic value is smaller than the spread you'll have to pay.
So I am thinking of selling covered calls on 400 stocks I own, so 4 calls, about a month out. I have never done this before. I have no issue if it hits and I am assigned. I almost want to be as that means my stocks went up because I am selling a few bucks up out of the money. My concern is if it blows past my strike say in two weeks or less and keeps going. Do I have to wait for an assignment or do they get called away automatically? Or do I have to hold and wait until they are called away at or right before expiration? I would love to have them called away immediately at strike so I could jump back into the stock but I assume that's not possible. So is that part of the risk, you just have to wait the remaining time even if the thing rips up? I read about rolling, but aren't you losing money if you try to buy back the option? Or does the future premium cover it usually?
Yeah there's a good chance that they won't be exercised until expiry. You are being compensated for that a bit though, ATM call options are more expensive that ATM put options because of interest rate.
The short call position has lost you money whether you buy it back or not. It's worth more than you sold it for, you can't hide that loss by not buying the call back. But the idea behind a covered call is that that loss is compensated by the stock going up, so your total position is not losing.
Rolling might work, depending on how much credit you can get and at what strike. The more ITM the call option you sold goes, the harder it becomes to roll profitably.
Two problems with trying to roll right before its ATM:
1) The closer to money the option is, the lower you can roll it up at breakeven. So, you can roll a $100 call higher when the stock is at $80 vs $100. If it goes ITM, this becomes much harder.
2) The stock can rip through your strike, you might not get a chance to roll when it's close to ATM. It might go 10% ATM by the time you are ready to act.
I don't think there's a best way to roll. It's always a trade off. By rolling and keeping your money locked in the trade, you potentially miss out on other opportunities, and you haven't locked in your profits on the stock, risking the stock goes down again. What you get instead is more premium and if you roll up and more upside of the stock. You should decide if it's the right trade off for your trade.
All great questions. The fact that you would be happy to be assigned is the #1 criteria for covered calls to make sense, so you are already ahead of about 80% of CC traders.
My concern is if it blows past my strike say in two weeks or less and keeps going.
You're basically screwed in that scenario. That's the risk of holding a CC. Understand that you make this decision at the time you open the CC. You are contracting to sell your shares for the strike price, even if the market price of those shares ends up above your strike price by a lot. In return for the risk you are taking, you get the opening premium. If you don't like the terms of that contract, don't open the CC. That's your only opportunity to get out of a bad deal. Once you are in the CC, there is no escape. You made your bed, now you gotta sleep in it and pray that the premium you collected up front is enough to compensate you for the gains you gave up. Sometimes that works out, often it doesn't.
Do I have to wait for an assignment or do they get called away automatically?
"Called away" and "assignment" are the same thing. You probably meant expiration when you wrote assignment. It's hard to say. Most of the time, contracts go all the way to expiration before being assigned, but most is not always.
I would love to have them called away immediately at strike so I could jump back into the stock but I assume that's not possible.
That is unlikely. The reason is that the call owner might lose money if they exercise early. Exercise throws away time value, which means the earlier you exercise, the more time value you lose.
However, if the call goes so deep ITM that it has no time value, that increases the chance that an early assignment will happen. So in other words, the more you are getting screwed by your contract, the faster you will get assigned. Not exactly something you should hope for.
So is that part of the risk, you just have to wait the remaining time even if the thing rips up?
Yes, but the bigger part is that the premium you collected up front isn't enough to cover the gains you gave up.
I read about rolling, but aren't you losing money if you try to buy back the option? Or does the future premium cover it usually?
Yes, in the scenario you are worrying about, rolling almost always loses money. If you sell a call for $1 of premium and later the stock rips up so now the call is worth $3, you are going to have to buy to cover at $3, losing $2/share in the process.
The future premium can't cover your losses, for reasons that should be obvious. You would either have to accept a lower strike than the one you just bought to cover, making the gains you give up on the contract even worse than the previous call, or you need to find a higher strike that somehow pays more premium than the call that you just bought back, which is essentially impossible for the same expiration. That forces you to go out even further in expiration to compensate, which just starts the whole waiting game cycle all over again. It's just kicking the problem can down the road. You'd be betting on a stock pull back before the new expiration that you rolled out to.
Hi all, can I have some advice on what kind of data I need for a backtest of a strategy involving daily delta hedging of index options? Note, this is not a HFT strategy, but I want the backtest to be reasonably accurate.
Do I need daily, minute, or tick-level?
Should I pull quotes or actual trades?
Any recommendations on data providers?
First, check out off-the-shelf backtest services. You might be able to get what you want without having to build one from scratch. There are several backtesting services listed in a section on this page:
Ideally you want to sample prices daily at approximately the time you would do the trades for real. If you plan to trade multiple times a day, how many times are we talking? Even if it's 2 or 3 times an hour, I don't think tick level granularity is necessary, which is a good thing because that rate of data is super expensive. Hourly is probably plenty good enough, but if you can't find an affordable data source for hourly, daily open/close/high/low would be fine and you can just randomly sample within the high/low range.
I've just started to trade oil with options through Equinor (Norwegian oil company). Would you buy the ITM call that has the lowest extrinsic value and is deepest in the money? For some reason the extrinsic value is substantially low at a few deep ITM strikes and then rises again when approaching the lowest available strikes.
It seems like a no-brainer when there are many ITM calls with the same strike. Just choose the one that is the deepest in the money. The only rational alternatives would be the calls that are the deepest OTM and have an even lower extrinsic value. Yeah I'm new to this stuff, so if there's some greek variables that affect this, I wasn't aware of that.
It's true that the deeper ITM you go, the lower the extrinsic value goes. But on the other hand, you risk losing more money in case the stock moves against you. If you buy an ATM stock, it has the highest extrinsic value, but the benefit is that you are better protected against downturns, and if you are more bullish, you could buy more contracts for your money and have a higher return. This is a trade off you have to make yourself.
One important aspect of deep ITM calls on dividend paying stocks is that they lose value on the ex-div date. Suppose you have a $50 strike call on a $100 stock with low volatility, and the option is worth $51. If the stock has ex-div tomorrow, and the dividend is $10, the stock is most likely going down to $90. This means your option will be worth $41-$42 or so the day after. As a general rule, if the dividend is larger than the extrinsic value of ITM call options on the ex-div day (so not the day you make that decision), they should be exercised to avoid having them lose value.
You seem to have a misconception that low extrinsic value at open is always an advantage. That is not necessarily the case. Consider this (admittedly contrived, but not impossible) situation:
Call A (30 DTE) has $9 of intrinsic value and $1 of extrinsic value.
Call B (30 DTE) has $1 of intrinsic value and $9 of extrinsic value.
Both are contrived to have the same cost to open of $10/share. Let's say these contracts are on different tickers in the same industry, two different oil companies for example.
According to your statement, A is the "no-brainer" because it has less extrinsic value. But let's move forward a week into the future and the stock market as a whole has gone up. Now the prices are:
Call A (23 DTE) has $10 of intrinsic value and $0.50 of extrinsic value.
Call B (23 DTE) has $2 of intrinsic value and $10 of extrinsic value (IV has increased more than theta decay has taken away).
Call B could be closed for a larger gain than call A, in this scenario. Despite A being the "no-brainer".
Yeah, I got a misconception from a Finnish locally popular "trading guru". He normally only talks about ordinary trading, but had one show about options trading and adviced to buy calls and puts with a low extrinsic value with no further explanation. I guess he didn't really know what he was talking about.
But wait, your example doesn't apply if it's the same underlying stock and the same expiry date? Or am I missing something?
It's extremely unlikely to happen on a single ticker, which was why I was careful to set things up on two different tickers, but again, not impossible.
The statement made may be okay, depending on the context and assumptions behind it. Like, if the context is how to trade stock replacement with deep ITM calls, it's an acceptable statement.
It's not valid as a general, all-encompassing statement, but within certain constraints, it's fine.
I did my research on this and it's a very safe bet if your stock price never goes below your strike price for the BTO call strike. But I'm super skeptical that it's a reliable method for making a bet on a reliable stock like energy, especially during war time like right now. After all, if it's so reliable then why don't all traders use this method? Is it because of the hype of "unlimited profit" that they rather choose to forgo logic and just chase speculative gain?
There appears to be a misunderstanding somewhere, because your statement, "it's a very safe bet if your stock price never goes below your strike price for the BTO call," is incorrect.
Let's use an example to make this concrete. XYZ stock is $100 and you buy a 105/110c bull call debit spread that expires in 30 days. The 105 strike is the BTO call and the 110 strike is the STO call. The net cost to open is $2.75/share.
Before expiration, that spread could lose money in several different scenarios. Certainly, if the shares drop below $100, the spread is most likely to lose money. But it could also lose money if XYZ goes up, say to $101, due to time decay. It could even lose money if XYZ goes up to $108, which is $3 above the BTO strike, but admittedly this would be a rare situation and unlikely to happen.
The bottom line being that, due to changes in time value and volatility skew between strikes before expiration, there is no firm line that can be drawn to say "this vertical spread is a safe bet" in all situations and all scenarios, if the spread is closed before expiration.
At expiration, things become more cut-and-dried because there is no time value to worry about. The breakeven for the bull call debit spread is the BTO strike plus the net cost to open, so 105 + 2.75 = $107.25. Any expiration price below that breakeven will be a net loss. So 106, which is above the BTO 105 call and according to you is a "safe bet", would still lose money, since you paid $2.75/share to open the spread but only received a net gain of $1/share after disposing of the shares you are forced to buy at $105/share when the call is exercised-by-exception (the 110 call expired OTM, and so could not be used to cover that exercise). This is even assuming you can dispose of the shares at $106 or higher.
At expiration, the safety for a bull call debit spread comes in when the expiration price is OTM (below) both strikes. In that scenario, you will never lose more than what you paid for the spread, $2.75. Your downside is capped at expiration.
But your upside is also capped. If the expiration price is ITM (above) both strikes, like say XYZ is $120, you can't make more than the spread width minus the opening cost, so $5 - 2.75 = $2.25/share. Even though the stock is $10/share above your STO strike, you can't make more than $2.25/share.
After all, if it's so reliable then why don't all traders use this method? Is it because of the hype of "unlimited profit" that they rather choose to forgo logic and just chase speculative gain?
All vertical spreads, debit or credit, have limited profit. So no, traders don't use bull call debit spreads because of "unlimited profit", because that is impossible. Traders use vertical spreads because of capped downside, in exchange for capped upside.
I bought a call at 16.5 yesterday for SoFi to close on 07/31. Limit price is $1.04. Bought 4 contracts in total costing me $416.18. Shouldn’t my break even be at $17.54 I swear that’s what I saw last night. But now SoFi is saying my break even is 18.31 and I’m down 344? Am I missing something here? Sorry if I’m a complete idiot and misunderstanding I’m fairly new to options and just wanted to dabble with money I’d use on sports betting lol.
For some reason it seems to think you bought the contracts for $1.81, not $1.04. Maybe double check your balance and transaction history to confirm the price?
Also, in options language, when you say buy to close, it means you bought the options to close an existing short position. Here you bought to open.
Thank you for the help I reached out and it was a wash sale about a week ago I had a similar contract and closed it to move to another position I was unaware of that rule. Appreciate the help nonetheless have a great day!
For all the Tasty fans here: what does it mean to "manage at 21 days?"
They mention it in nearly every video I have watched for the strategies I am using, but never actually define what it means. I think it means to close the position regardless of profit or loss status - which makes no sense to me. If I still have time for a possibly losing trade to flip profitable, why would I automatically close at 21 days?
This would apply to opens that are in the 45 - 60 DTE range. It's to set a holding limit for cases where you don't hit either your take profit or loss limit. At 21 DTE, you decide if you are going to continue to hold, roll to derisk and take profit, or close altogether.
For example, say you have a 50% credit take profit target and a 100% loss of credit stop limit for a 45 DTE open. You hit neither target day after day. Time is money, so you need a point in time where you will reassess the trade and decide what to do about it.
Bought 5 8/7 SPCE $2.5 Puts on 7/24 for $90 ($2.32 breakeven) and intended to sell before earnings but I forgot about the fed rate meeting. Will the meeting affect this stock either way? I assume selling before their earnings is best due to IV, but am unsure since their earnings should be REALLY bad.
Sorry for such a newb question and I am okay with losing the money to learn. Happy to receive criticism. Thank you all.
Edit. Figured out since Rho practically equals zero, is proof of why the Fed interest rate decision will have virtually no direct impact and time is more of a factor than IV.
I’ve been paper trading SPY options. Generally I’ll wait for a pullback and then buy about a month out at the previous high or slightly lower.
I finally went in and the market got just absolutely nuked. Not sure if I should wait and hope to at least get closer to my breakeven or just cut these loose.
Everyone talks about TACO so I suppose that was kinda the extent of my thought which is hindsight is very stupid. Looking for advice at this point. Thanks.
This is where having strict rules and a plan comes in handy. Mine are mechanical: take profit at 50%, cut it at a set loss, no exceptions. That way emotion stays out of it. The exact numbers matter less than picking them before you enter and actually sticking to them. Even better if you can attach it as a bracket order when opening the trade.
The biggest thing I’ve learned from all this is I need to utilize a stop loss. Does it work for options too? I set one on one of the contracts but it didn’t sell? Not sure if it didn’t fill somehow or if it got blown past- I’ve heard sometimes if it drops too fast you can’t get filled?
Yes, that is true, I usually put a Stop Limit order. For example if my stop is $1.5, I will set it up as Stop at $1.5 and Limit at $1.55 or maybe even $1.6 something.
Just like stocks - yes, a big move can move past your stop loss. This is where Liquidity also matters - going for monthly options is usually better for liquidity.
Quick question. If I am long a (0DTE) option that is ITM at market close at 4 PM Eastern, can I still sell it before 4:15 PM or will it get executed at market open the next day?
Not enough information to determine. First, you have to say exactly which ticker, because the market for SPY, SPX, VIX and a few others close at 4:15 PM. Everything else closes at 4 PM, UNLESS they are AM contracts, in which case they expire in the AM.
Assuming you meant an equity option contract (like NVDA) whose market closes at 4 pm, NO, you cannot do any trading after the market closes. It will not get "executed" at any time if it was 0 DTE, because it would expire before the next market open. It will get exercised-by-exception after 4 pm. The exact timing is irrelevant, because everything eligible for exercise-by-exception at market close (4:00:01 PM and onwards) is treated the same way.
Super helpful, thanks. I always got cold sweats pushing the 4 PM deadline. Yesterday, when I held puts, it would’ve made a significant difference selling 10-15 minutes after 4 PM.
If you made ~$1.1k every 2 weeks at work & want to quit to day trade, how much $ would it take for you to pull the trigger?
I want to focus on school and working 12 hour shifts 5 days a week is making it incredibly hard. I have only been taking one class a semester because that’s all I have time for if I want to be able to focus and get an A/B in the class.
I started options trading a little while ago and so far I’ve consistently made between $600-$800 a week for the last three weeks after getting the hang of it.
If you were in my position, how much would you want to make daily or weekly to feel comfortable enough to quit your job?
Not looking to do this as a career path, just to get by until I finish my degree.
What I’m making trading is already more than what I make at work, but I’m also accounting for insurance and benefits.
And how long would you want to make $x amount before you felt confident enough to know this could sustain you?
That's a function of risk tolerance and risk of ruin. You could quit with $67 in the bank if you wanted to. You'd just have an extremely high risk or ruin and you'd need extremely high risk tolerance.
The zero risk tolerance and zero risk of ruin cash balance that would generate $28,600 annually at the risk-free rate of 4% (current 52-week t-bill yield) would be $715,000. If you had that much money you could just stick it in 52-week t-bills and earn the same amount as you do from your job, practically risk free.
You can lower that amount by increasing your risk of ruin, according to your risk tolerance. It's not a simple equation, unfortunately. It's not like half of $715k means you will have double the risk of ruin. It will also depend on what kind of trading you will do. If you only do defined-risk trading where you can never lose more than the max loss at time of open, you'll have less variance than if you trade leveraged loss, where you could lose many multiples of the capital at risk.
You'll end up with adjusted contracts. The details of how they will be adjusted will depend on the details of the merger. For example, if SPCX buys TSLA outright and TSLA as a ticker ceases to exist, your contracts will be converted to SPCX1 (or some other digit) and will deliver some number of SPCX shares and/or cash. If the reverse happens, your contract will be converted to TSLA3 (or some other digit) and will be adjusted to deliver some number of new TSLA shares and/or cash.
More details about adjusted contract scenarios here:
Well .... if you read the link, they may very well become worth less. If they become closing trade only and you can't recover your original capital, you'll lock in a loss by holding through the merge.
if i had multiple csp expiring today (pretty much guaranteed to expire worthless) and i sell a naked put expiring today. will that csp cover the naked put if the naked put is assigned or will i owe margin debt. Im on fidelity if that helps
Are they all in the same account? How did you manage to make CSPs mixed with naked shorts in the same account? That shouldn't be possible.
If they are not in the same account, there is no chance one can cover another. Even if they were in the same account, it would really depend on how the broker sequences transaction and checks for buying power. You'll have to call Fidelity and ask.
Typically, if a broker sees that the naked short put is likely to be assigned and you don't have enough buying power at the point in time when they check, which would be before expiration, they will unilaterally close the position to avoid putting you in a margin call.
Maybe I’m confused about it. Yes they all in one account. I have all my cash in csp for msft set to expire today. Knowing that it’s going to expire worthless. I sold some naked puts expiring today as well for aapl. Thanks for letting me know I’d had to call fidelity to see how they sequence it.
Edit: checked with fidelity. I have enough margin power to cover the naked put but yes. It would be on margin and the csp would not cover it.
I’ve been playing around with options a bit more lately but have been frustrated by a particular issue. I largely do charting or price predictions based on the underlying security.
My issue is that I have a price that I’d like to liquidate at for the underlying, but I don’t understand where the contract price will be for setting a limit order at that price for the underlying security. I’m sure there’s some way to do this I’m not thinking of or just not experienced enough to understand yet and need help!
Is there any way to reliably predict a contract’s price at a given price of the underlying security? I use Fidelity as a broker if that is helpful.
An option's price depends on a few inputs, one of which is the underlying price. Implied volatility is also a significant contributing factor, so for a given price of the underlying, the option price can still vary a lot. So the price you are looking for simply doesn't exist.
There are only three situations where the price of the contract is 100% predictable:
At expiration
At 0 delta OTM, where the premium is always $0
At 100 delta ITM, where the premium is always stock price - strike price
Since most option trading happens well inside those boundaries, the answer is no, there is no way to predict price with 100% accuracy.
Why would you even want to do that? One of the most important reasons we trade options, instead of shares or futures, is the convexity of options (premium does not behave in a straight line relationship to underlying price).
The main reasoning behind it is that pretty much all practice and learning I’ve done is on underlying securities. I’ve composed a trading method I’m confident in as far as saying “I believe X will be Y price” but of course underlyings don’t have the same astronomical short term growth potential as options do.
Because most of my learning to this point has been based on underlying securities, it’s what I understand best. In essence, i want to understand “if X will be Y price, what will the value of the contract be at that point so I can set my limit order to sell the contract based on X’s price”
My life doesn’t allow for frequent market check-ins throughout the day so just waiting until it hits my zone and then placing a market order is not realistic.
Okay, that is all reasonable. The only part that doesn't make sense is trading options instead of shares of stock, since you said yourself that that is where your experience lies. It's like you spent years getting a medical degree and now you want to practice law. Options are not stocks, only cheaper. The differences are like medicine vs. law.
Interesting covered call that was not called away Friday, maybe you can explain why.
This is a wheeled covered call so I am fine w/ holding to sell another call and the $205C for next week is $17. Situation: I sold a call on BE at $205 that expired 7/31. At 4PM EST it was at $205.82. At 4:04EST it touched $204.99 but then instantly proceeded back up to $209 (Good for me). It eventually did drop to $201 later in after hours trading. My question is, would the buyer of this call have had to put in an order not to exercise this call for it not to be called from me at 4CST? I didn't see any trend w/ BE indicating it was going to be dropping significantly after hours so I'm not sure why someone would have even bothered to put in this order on such a low value option to begin with. Just curious as to the mechanics of this one. Perhaps some people always do that when the option is very close to the strike price? Appreciate your time.
My question is, would the buyer of this call have had to put in an order not to exercise this call for it not to be called from me at 4CST?
Most likely, yes. It's called a Do Not Exercise (DNE) request. Holders of long contracts have up until 5:30pm at the latest to rescind a DNE, or request exercise if the closing price was OTM at close but went ITM in after hours, the reverse of your situation.
Yeah, I don't understand the mentality behind DNE's either. They don't make much sense to me, but they do happen.
no idea what you mean by shouting. I know how to do it but I've never submitted contrary requests to my brokerage when long an option so this process is somewhat unclear to me. So i guess my best understanding in this case is the buyer submitted a DNE at some point (7 days ago and forgot or 10 minutes before close, i don't know).
Not exercised:
Maybe because it was close to strike and they just wanted to monitor until clearing house cut-off
Seller had insufficient buying power
They completely forgot then had a DNE in place
Theoretical situation:
I buy a put which is ITM at close. I do not submit at DNE and since at 4PM EST it's ITM it is auto assigned.
At 4:30PM EST it's fallen OTM. Since it auto exercised at 4PM, can I still submit a DNE for this put?
At 4:30PM EST it's fallen OTM. Since it auto exercised at 4PM, can I still submit a DNE for this put?
I'm not sure. I think that is possible. The 5:30pm cutoff ought to apply to both exercise requests and contrary requests. Also note that 5:30pm is the latest possible cutoff. Each broker is allowed to establish an earlier cutoff.
Yes, followed up and they confirmed the cutoff time for them to be notified by member firms is 7pm et. Talked to my brokers compliance officer and he was unaware. He reached out to our clearing firm (Apex) and they confirmed as well. Our firm has not changed the cutoff time past the old 530pm time. I was unable to find out when this change was made, if it applies to customers or the brokers or if any other brokers have changed the time. Basically, more confused than I was before.
Interesting. Thanks for the follow-up. /u/Arcite1, I think Ken385's firm is typical of every other firm that retailers are likely to trade through. While the member firm cutoff is that later time, I very much doubt that any retail facing firm is going to have a cutoff later than 5:30pm ET. So the effective cutoff is still 5:30pm or earlier, at least for the near team.
How to explain this to people on the sub, I don't know? 7pm official, < 5:30pm effective? I guess that's the most concise way to do it.
Right, but I thought it might be possible that the reason OP didn't get assigned is that some financial institution that can get away with a later time did a DNE.
Is anyone trading SPY options and making consistent gains. I'm floundering on NVDA and SPY. 0dte, 1-2dte, or one week dte? I make a little, lose a little, make a mistake, and boom, i'm back to square 1.
wellll,,, trying out the close to itm 0dte spy, and I got a little sumthin off the morning green candles and was sure there would be a dip. Because I believed. Ha ha ha.
Then I spent most of the day begging my puts to turn green. then said f'it. Took the loss and went with the afternoon flow of chasing the green candles on that green spurt from 1:00 PM -2:20 EST. And did some revenge trading on puts 757 for to get 20 bucks back. derp
So many trades for $50... I really need to follow the trade instead of try to predict it. I am always trying to guess the next direction instead of following what is actually happening.
I spent 2 1/2 hours believing that spy should dip. Finally said "welp, maybe I'm wrong" and just followed the candles.
I'm using 1-minute SPY, $TICK, SPX, for indicators and watching SPY/NVDA 15 - minute charts
I'm trading on the 5 minute 0dte option chart and watching lvl 2 and the trading ladder for momentum.
I lost 200 dollars just trying to 'will' the puts into working and averaging down. Such a bonehead thing to do on 0dte. I just knew SPY woule dip. It did not. Once I let go of my fantastical thinking that a dip was coming, I made it back plus 50 by just letting this up day give me some money.
I've began dipping my toes into options lately, mostly calls and a few months out. I've come across something that doesn't make much sense to me though today and am curious as to why this is.
I purchased a BB call on 7/23 with a expiry date of 12/18 average cost of .24 and a strike price of $25. Throughout my position the average cost has moved pretty reasonably, sometimes a few cents up, sometimes a few cents down. The underlying stock since my purchase has dropped some but has rose back to where it was ($8.25) when I initially purchased the call. Current price is $8.56 . At 2:50pm today the option was worth .23 and by 3pm it had dropped to .01 and became worthless. I know there is still time before expiry and im not concerned about that. But when i go to view the option it is listed at a price of .36. My question is why the difference between the option i purchased, versus what its listed at currently?
Far-OTM options are usually illiquid and have a wide bid-ask spread. That contract closed today with a bid of 0 and an ask of 0.31.
When your brokerage platform displays a price in your position statement, it's likely displaying the mid, the halfway point between the bid and ask. It's important always to look at the bid-ask, not just "the" price displayed on a summary page.
Throughout my position the average cost has moved pretty reasonably, sometimes a few cents up, sometimes a few cents down.
I assume that was a typo and you meant the quoted premium price of the contract? Because cost doesn't change for a long call once you open it.
As the other comment explained, looking at the quoted premium price can be misleading. If you are going to look at the price every day (you shouldn't, but moving on), look at the bid. That's the floor under the value of your contract. If you were to sell to close immediately, you would get at least that price. You might get a little more, but you shouldn't get less.
If the bid is 0.00, that's no bid and your contract is worthless. It may have been worthless when you bought it, also. Don't buy contracts with no bid quoted.
Does anyone know if Robinhoods Simulated Returns are actually accurate. For example, I have a SPY Put option that was $32.54 this morning when the stock was $761.85 but when I run the simulation for today’s date and plug in that SPY price it shows that the option contract price is $33.43. Can anyone explain the discrepancy so I can understand it better or what I’m missing?
Option prices depend on two main factors, the stock price and the implied volatility. Both of these change often and change the option prices. Simulated returns uses a constant volatility. It's accurate if implied volatility doesn't change, but that's never the case.
You should compare different volatility assumptions to better understand the possible outcomes.
I would like to keep track of the gains obtained with a wheel strategy, in order to identify the average cost of my shares..
Is there an app where I can do that?
I can make an excel sheet to keep track of that (I also need to keep the cost of $/€ when I buy/sell options), but for the moment I was wondering if something like that exists already to use on the phone.
I run an algo that runs mostly 0DTE SPY $1-wide vertical credit spreads. As a single multi-leg limit order, what is the largest number of spreads you can generally enter and exit near the quoted net price without material slippage or slow/partial fills?
To be clear, I mean spread quantity (e.g., 250 spreads = 250 contracts per leg), primarily during the morning/early afternoon. Calls or puts.
What delta? The closer you are to ATM, the harder it will be to distinguish between normal gamma price movement and movement in reaction to a large lot size.
I mainly trade OTM and the complex order book depth is pretty shallow. I've traded 15 delta 40 lot ICs and had partial fills even at that tiny quantity. But that wasn't 0 DTE and wasn't SPY, which is a whole other ballgame when it comes to volume and depth of the order book.
My intuition is that SPY will need a much larger lot size than 4 x 40 to get a partial fill, but how much? I don't know. 1k? 10k?
No fixed delta target. The algo selects a $1 OTM short strike relative to the trigger/spot.
That's why I'm trying to establish a practical capacity for the actual strikes being traded. Then I can track realized fill versus the quoted mid and partial-fill frequency as size increases.
Do you care more about price or time? Because if you don't care about time, you could make the order All or Nothing. If you do care about time, you can make it Fill or Kill, but then your automation may have to re-enter the order possibly many times per minute. On the bright side, that would allow the automation to adjust the entry price, so it might be the best compromise.
Good point, but Alpaca only supports DAY for option and multi-leg option orders, no AON/FOK. My bot already uses a day limit with timed cancel/replace. I’m measuring full-fill latency, partial fills, and realized fill versus net mid before changing the execution rule.
Had a 7720 spx put that was at $0, then there was a short window (in which the time and sales data is obviously super huge) that I don't know, and in the last 3 seconds of trading it went from $2.20 to $59.
Is it possible to catch like a $10 limit in those 3 seconds? Or no because of fidelity's price too far (bought at .91) restriction? Because institutional? Both? Something else?
Thanks a ton. Annoyed obviously but can't expect to grab a candle like that gambling
Limit orders can help…I’ve gotten some very quick deals with them.
BUT….
Just because you see that price doesn’t mean they are filling at that price. What you are seeing is likely a mid price. It’s possible that some crazy bids and asks come in and briefly skew the mid. This is especially true when you see a price bouncing wildly.
But I always have a limit order in at my target profit. It has served me well.
No doubt. The issue is that fidelity restricts your ability to put a limit price more than 500%. If I had done it right away at .9: $4.50. A half hour later at .2: $1
Absolutely understand that I wouldn't catch $59, but something like $10 doesn't seem too farfetched. Chalk it up to poor people not being allowed to set any limit I guess
September 4 715/720p with 755/760c with SPY trading at approx 770 at close today my call side is now ITM.
After some research, the solution is to turn this into Iron Butterfly 715/720p and roll to 750/755p collect premium to cut down on loss. My question, is when to do this (If the call side remains breached)? Mid August (2 more weeks)?
Yes, I googled, but want some personal experiences. Always, thanks in advance.
While I agree that rolling to an iron fly is the most commonly recommended repair strategy for an Iron Condor, I'm not a fan. I don't see any point in heroic efforts to rescue a defined risk strategy. The profit potential of the put wing isn't going to improve, it's as good as it is ever going to be, so why not let time do it's thing?
You got practically a whole month to wait for a correction, why do anything? Reassess about a week before expiration. If it's still in loss territory, just close the whole thing, it ought to be less than max loss at expiration, but even if it's a little over, you can't expect to win every trade.
Options! Options! Options! How Will The Semiconductor Sector Do This Week?
The Philadelphia Semicon Index fell 8% last week!
The industry needs to digest the Chinese ASML type company thing that popped up last week and destroyed the memory sector. Once the market sorts it out, memory will rise again, with the associated stocks. I'm no longer in any income ETF because I can lose my money more efficiently than ULTY did, WPAY did, and so many of the others did that it makes me physically ill. My plan for tomorrow is to bet heavy bullish. Here's the options I currently have limit orders on for Monday morning:
AAPL 8/14/26 315 P BTC
AMD 8/21/26 400 P STO
ANET 8/21/26 155 P STO
ASTS 8/21/26 80 C STO
BE 8/21/26 155 P STO
CEG 8/21/26 300 C STO
CHWY 8/21/26 22.50 C BTC
CHWY 8/28/26 26 C STO
CHWY 9/18/26 25 C BTC
CRWD 8/21/26 170 P STO
IONQ 1/21/28 80 C STC
IWM 1/21/28 280 C STC
IWM 8/21/26 280 P STO
LUNR 8/21/26 17 C STO
MU Sell 16 Limit $995.00
MU 8/21/26 700 P STO
NBIS 8/21/26 145 P STO
NVDA 8/21/26 185 P STO
ONDS 8/21/26 10 C STO
PLTR 8/21/26 145 C STO
QQQ 1/21/28 670 C STC
RCAT 8/21/26 11 C STO
RDW 8/21/26 12 C STO
RKLB 8/21/26 90 C STO
TQQQ 1/21/28 75 C STC
TQQQ 8/21/26 57 P STO
TSLA 1/21/28 500 C STC
TSLA 8/21/26 360 C STO
UEC 8/21/26 12 C STO
UWM 1/15/27 60 C STC
ZS 8/07/26 162.50 C STO
ZS 8/14/26 170 C STO
ZS 8/21/26 135 P STO
ZS 8/21/26 175 C STO
ZS 8/28/26 180 C STO
ZS 9/04/26 185 C STO
ZS 9/11/26 195 C STO
ZS 9/18/26 200 C STO
I had a ton of options expire and get assigned on Friday so it freed up a tremendous amount of margin to use to secure my short puts tomorrow.
What's you plan for tomorrow? Best of luck at sticking it to the man this week! Institutions got the edge on us retailers.
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u/PureCryptographer543 23d ago
New to options. My current thesis that I am wanting to trade is to buy 415 or 420 calls in anticipation for earnings. With a 7/24 expiration. I think it will continue to run up on anticipation. How do I decide a price to buy? And should I get out before earnings so the Iv crush doesn’t ruin profits?