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Buy to Open/Sell to Close - Always sell to close before expiration if you are a retail investor. Thank you so much for this answer that I was looking for at 3:30 - 4:33
You are the only you tuber I know that explains how the call/put options affect some one at expiration. Buy to open/Sell to Open, and what happens when it expires. I understood the co cents of Buying to Open and Selling to open vs Selling to Close and Buying to close, but your explanation helped me know which down arrow to choose and why I'm taking this action. Bravo!
Hello Jake, lovely explanation of what goes on at expiration of an Option Contract. Thank you for being clear with such a difficult subject. I am starting out and trying to get clarity on the closing of options. I assume the only options that will require manually closing will be only those which would expire profitable, thus avoiding a share allocation?
Thank you for explaining how to close options. There are so many videos on this subject, but found yours the simplest, and most detailed to understand, and apply.
Jake: Wonderful info. It makes me wonder why stock market finances isn't taught in our schools. Couple of questions: 1) If I sell call (and I have the cash to cover the transaction but this isnot a covered call)...does the trading house automatically do the transaction if the call option needs to be exercised from my cash reserves? 2) Same question regarding selling a cash covered put...if the cash covered put needs to be exercised, does the trading house automatically do the transaction (of using the cash/buying the shares/and completing the option transaction)? Thanks!
I think you have really helped me on all this. So if I have a long call option and it’s profitable and well ITM then make sure I sell to close before the expiration. Is that as simple as when I bought the option? You just issue a sell to close order? So I have to go search for something in the chain? Sorry just a little unclear on the closing. Thanks!
Thank You for this video!!!!! I accidently hit Buy to open instead of Sell to open. I don't know how, but I actually made a few bucks Selling to close. Great content bud! You saved me!
Thank you Jake. Been watching pots of your videos and stuff m have confidently secures 3 contracts in 1 week time with your help!!!! Thanks When buying to close, will i put the bid or ask?? To maximize my gains
Thank you so much Jake for making such a detailed home video on exactly what’s going on in a contract you are the man keep it going. I subscribed to your channel.
Thank you Jake for this video. It was really helpful to understand, I follow all of your videos in Options trading and getting educated myself. Really nice one.
Hi Jake, liked and subscribed. Been watching your options playlist. Question on closing your sell put early. Can you BTC your sell put on Charles Schwab with level 1?
Hi Jake! Thanks for the videos! Good stuff! I'm about to close out my first call option. To confirm, if I sell to close, I'm buying the stock at the strike price and immediately selling it at the current price. Is that right? On a sell to close, do I need to have the available funds in my account to cover the purchase price of the stock?
Jake, thank you so much sincerely, the clearest video Ive watched on youtube and i've watched a whole lot of them... i also use schwab which made it even easier . gotta close some positions and take some losses but it's way better than being assigned
Hey Steven! If I am selling, then I sell to open contracts 4-6 weeks out to maximize gains from theta decay. If I am buying, then I buy contracts about 6 months out to give the stock enough time to move in the direction I want and minimize how much I lose to theta decay.
@@JakeBroe can you make a video explaining all the Greeks of Options? I do been buying short term options (2-4 weeks out) and I’m not seeing the profits as I expected.
Hi Jake - thanks for the video. Can you tell me how purchase the stock if you own a call? If you bought a call and the strike price was hit, and you wanted to purchase the stocks so you could sell them on the market, how would you do that? Would you want to do that? I use CS
Hi Jake, On your spreadsheet examples, you do a buy to close only if you don't want to get assigned, is that correct? And you do that if it is profitable. If not profitable, you don't do the buy to close and just do the wheel (covered call)?
Hey Jake, I'm rewatching some of your option videos and I'm still trying to grasp the sell to close/buy to close concept. I guess if I originally buy to open a call contract, I would need to sell to close to exit the position. Prior to buying the call contract, is there a way to estimate or determine what the cost to sell to close would be if the stock went up or down XX dollars? That way you can determine your gains/losses in certain scenarios prior to entering into the contract.
Sounds like you are getting it Alan! What I do (and it's not exact) is I just look at the option chain. If the share price quickly moved, just look at the chain. For example if the shareprice went up $10, look at options today that are worth $10 more in the money. That's a way of roughly estimating how much you would gain.
You showed the numbers stating if you were up or down and the minus symbols, and I am wondering if you would please do a video on that. I don't know how to understand what I am seeing on my account, when looking at my cc's. Now since I am long on the stock and only selling for $4-$7 for a week long contract, it is not a biggie. HOWEVER, I need to learn how to understand what I am seeing so that I can improve my options trading ability. I would really appreciate this. Thank you
Great video !! Sold call - May 17 expiry - I will get paid 11225 for my 100 shares (a 1500 gain on my initial investment) ... OR I could buy to close now at a 500 loss...(905 to close minus the 405 premium initially made)... then sell the shares that are currently $7 above the strike price...which would $700 more than the assigned payout.... My questions : Are early assignments rare - even for a stock that is well in the money ? As the expiry date gets closer what will happen to the premium cost itself? No matter what I do now my upside is capped - which I'm ok with - just looking for the best way to access these shares to sell & reinvest.
Hello I am new to and trying to learn options here and a little confused on how I should be proceeding with this trade. Any constructive advice would be appreciated. I also realize there are probably better stocks to trade options on, but I wanted to try with some thing cheap that I could afford to cover. I purchased a sell to open contract for Tilray (TLRY) @ .61 AND 5.00 strike and covered it with 100 shares. It also says w/ call expiration of 1/6/23 If I were to close today @ an .08 what would that mean for my position. Am I better to close this position or let it ride to expiration. I am also using TD as my platform. Thanks for any help!
Question: If I bought a call contract and later sold it but was just sold but not closed, who is responsible in the end. The original seller or the second seller. I was under the impression that by selling you removed your self from the contract. But its seems that it is not the case.
Hi, what if the holder exercise the contract. As a writer, you are obligated to buy or sell the underlying stock no? Is it possible to exit a position in the money before the expiration?
Hi, I see that this video was 2 years ago but I have a question about a covered call. I sold 3 covered calls on a stock that is already in the money, and I still have a lot of time left on the contract (years). I think it'd be best to try to close as soon as possible, once the dust settles on the share price, because I only see the uptrend generally continuing and I'd rather not be kicking myself with further missed gains. Is there a move that I can make to simultaneously sell my shares and buy to close y covered call options? Hence, not having the money to close right now, but use profits from the sale of the actual shares. Thanks in advance!
Jake, Can you Short and go long on both sides of options? Can i short and go long on the call side, and do the same for the put side? Kind of like a 4 way option for calls and puts? Thanks
I think why people get confused is their trying to learn about calls and puts at the same time. I suggest getting a really solid understanding of calls first and then move on to learning about puts.
🤪. Ím so confused. In minute 1:11 you said “buyers are bidding, sellers are asking”, but in the option chain I think it’s the other way round. Is that right? If I want to buy a contract, I click on the ask column and sell a contract then click on the bid column.
If you buy a call and it hits the strike price and you think the stock is going to continue to go up rapidly, is it still a bad idea to let it expire in the money?
Hi Jake, on expiration day, if you are an option seller and the contract is in the money, what time do you get assigned: immediately at 12am on that day or at 4pm (when the stock exchange closes for that day)? Same thing if you bought a contract, do you have until 4pm on expiration day to sell to close if you don't want to exercise?
Hey cleaner! Options contracts are only bought and sold what the NYSE is open. So you have until 4pm Eastern on the day of expiration to buy and sell. After market close on expiration, you have 1.5 hours to contact your broker or respond to an e-mail saying you want to exercise. Stock is then exchanged at some point over the next day. Usually takes 48 hours for everything to settle. Personally, I recommend never holding a contract in to expiration. Always buy to close or sell to close all your positions.
In another video you said to close out of your positions when you have reached 70 percent of the option contract value, how would you calculate in fidelity, great video, your help would be much appreciated
Hey Nicholas! You can just look at your cost basis for the contracts and use a calculator to figure out what 70% is. Honestly, anything above 50% and it is probably worth closing the contracts and then finding a new position to take.
Dude! I have watched several videos trying to understand STO (puts) to get an understanding of it. I mean wasted all morning long trying to find a decent explanation. So happy i found your video. It explained it perfectly and the examples were perfectly simple to understand and were within the lines of your topic. Thank you so much!!!!
For your last example when you were underwater with discovery why wouldn’t you just roll that down and out until you were net positive? I have never been assigned
So, Jake if I pay the premium for buying a leap at a $10 strike price and say between the time I paid premium or bought to open, and 20 days before expiration the stock price is $30, do I just sell to close and take my profits?
If you exercise an option to buy and don't have the funds to pay for 100 shares ,will schwab sell it for you in a combo trade without a trade violation? What if no one will buy your sell to close?
Hi Jake, on Scenario 2, why would you sell to close always? Don't you want to get the stock at the lower price and keep the stock, especially if the stock is rising?
If you are the seller and the option expires out of the money, you still have to "buy to close" the position no matter what right? You have to bring the "-1" back up to "0"? Is there a time frame from when you must exit your position? Like before the Expiration date of the contract?
Hey Erick! This is not correct. If the contract you sold (-1) expires out of the money, then the person who bought it (1) will not exercise it at expiration and both people go back to (0). Nothing to buy to close!
Hi Jake, it sounds like when you sell to close a call contract you bought you have to set contract terms such as a strike, premium and expiration, as you would if you were selling to open a call contract. Is this correct? Or when you sell to close are you completely out of that contract? Thanks!
You can set the premium price, however you must 'sell to close' the exact same contract that you 'bought to open.' The contract you are selling to close must be the same expiration date and the same strike price. For example, if you bought 1 contract of Amazon with an expiration date of Aug 19, 2022 and at a strike price of 160, you MUST sell to close the contract of amazon with the expiration date of aug 19, 2022 with the strike price of 160.
So you can get caught holding the expired contract if you try to sell too close to the expiration date? No one will want to buy it if your selling your call?
I didn't really understand what sell to close means if you a "buyer"... but here is my scenario : I want to buy a option call i'm bullish on with a strike price let's say 40$ that expires in 2022, then the price get's to 1000$ and we are still in 2021, how do I sell it instant before it expires to get my money ? is that the sell to close or what do i need to do ? :) hope someone can help best regards
Hi Jake, really appreciate this video as I’m hoping to “buy to close” soon on my first cash secured put. Quick question for you though, If I get assigned, since the cash is “secured”, do brokerages automatically make the trade for the assigned shares or is there something I’ll need to do at that point? Just haven’t been through the process so it’s a bit of an unknown. Thanks!
Hey Ryan! If you are the seller of a call or put, and the contract expires in the money and is exercised, then you don't have to do anything. Your broker will handle it all automatically.
If you BUY a long put, when you sell to close, you don't have to put up any more money, right? If you BUY a long put, is it possible that you CAN'T sell to close even when the put goes in the money? EX: You buy Apple trading at 150, you Long put option at 75. The market tanks and Apple goes to 60. Is it possible no one will buy your option to close, so that you are FORCED to exercise, and pay for 100 shares of Apple at 60, before selling them to the original put seller, for 75? Great videos. Thanks.
If you buy to open either a call or put, then you paid a premium for the contract. That is the most you can lose. You can sell to close it at anytime for what it is worth to anyone else who might want to buy it. Large cap stocks like AAPL have computers buying and selling at all times, so you can always find a buyer if you want to sell. However, if you buy contracts on small cap stocks, there might be no buyer and you would then have to exercise and force the exchange of shares to make your profit.
Give this video a LIKE to support my channel! Also check out my entire playlist on Trading Options here!
ruclips.net/p/PLscTZuOqKWIxSZzy4ObKWDznEsCot_1HU
do you do a private consultation?
Don’t stop, Jake. You are a good one.
Thanks Matthew! I still have a lot of great content coming!
One of the best I found so far. How can I donate you @Jake?
Buy to Open/Sell to Close - Always sell to close before expiration if you are a retail investor. Thank you so much for this answer that I was looking for at 3:30 - 4:33
That is why I am here today. Got my answer.
@@dcjellyme too
You are the only you tuber I know that explains how the call/put options affect some one at expiration. Buy to open/Sell to Open, and what happens when it expires. I understood the co cents of Buying to Open and Selling to open vs Selling to Close and Buying to close, but your explanation helped me know which down arrow to choose and why I'm taking this action. Bravo!
Hello Jake, lovely explanation of what goes on at expiration of an Option Contract. Thank you for being clear with such a difficult subject. I am starting out and trying to get clarity on the closing of options.
I assume the only options that will require manually closing will be only those which would expire profitable, thus avoiding a share allocation?
Just getting started with options trading and have been unsure about closing out a contract, so this is super helpful! Thank you!
Jake is the best! He explains in very clear terms material which some find difficult. He’s my go-to options teacher. Thanks Jake!
Thank you for explaining how to close options. There are so many videos on this subject, but found yours the simplest, and most detailed to understand, and apply.
As a retail trader do you recommend buying or selling ?
Hey jake. I have been sharing this vid with friends and family. Keep up this work it’s very much needed!
Thanks so much Joe! I appreciate you sharing my videos!
Thank you. Needed confirmation and your explanation made it very simple
Wow just another question that I had, and Jake almost as he can read my mind, makes a video about it. You're the best man!
I am here for you guys David! Cheers!
Jake: Wonderful info. It makes me wonder why stock market finances isn't taught in our schools. Couple of questions: 1) If I sell call (and I have the cash to cover the transaction but this isnot a covered call)...does the trading house automatically do the transaction if the call option needs to be exercised from my cash reserves? 2) Same question regarding selling a cash covered put...if the cash covered put needs to be exercised, does the trading house automatically do the transaction (of using the cash/buying the shares/and completing the option transaction)? Thanks!
I think you have really helped me on all this. So if I have a long call option and it’s profitable and well ITM then make sure I sell to close before the expiration. Is that as simple as when I bought the option? You just issue a sell to close order? So I have to go search for something in the chain? Sorry just a little unclear on the closing. Thanks!
Thanks Jake I don’t normally comment on anything, but you warrant it, you’re a great teacher keep it up!
Thanks Ricky! I appreciate that!
its the best video that explains - sell to open, and buy to close.
thanks you help me understand the buy to close. I was super confused why that was even an option. thanks
Thank You for this video!!!!! I accidently hit Buy to open instead of Sell to open. I don't know how, but I actually made a few bucks Selling to close. Great content bud! You saved me!
So, when you sell a put - you really want to be comfortable getting assigned or you might lose money if the stock price goes below the strike price?
Thank you Jake. Been watching pots of your videos and stuff m have confidently secures 3 contracts in 1 week time with your help!!!! Thanks
When buying to close, will i put the bid or ask?? To maximize my gains
Thank you so much Jake for making such a detailed home video on exactly what’s going on in a contract you are the man keep it going. I subscribed to your channel.
Finally found a vid that explains it in depth. Thanks!
Thank you Jake for this video. It was really helpful to understand, I follow all of your videos in Options trading and getting educated myself. Really nice one.
Thanks Kamesh! I appreciate the support!
Really Good Explanation on ITM and selling to close before expiration.
Very well explained - Thank you and God bless you
Hi Jake, liked and subscribed. Been watching your options playlist.
Question on closing your sell put early. Can you BTC your sell put on Charles Schwab with level 1?
Hi Jake! Thanks for the videos! Good stuff! I'm about to close out my first call option. To confirm, if I sell to close, I'm buying the stock at the strike price and immediately selling it at the current price. Is that right? On a sell to close, do I need to have the available funds in my account to cover the purchase price of the stock?
again, super useful, made the options trading EVEN clearer.
Thanks Tiger! Cheers!
Jake, thank you so much sincerely, the clearest video Ive watched on youtube and i've watched a whole lot of them... i also use schwab which made it even easier . gotta close some positions and take some losses but it's way better than being assigned
I agree!! Much better than being assigned. Glad you found the video and found my channel! Cheers!
Very well explained Jake, thanks a lot. I'm a beginner and was actually looking at exactly this scenario ! I feel better equipped thanks a lot !
have watch a lot of vids on this topic, this is def one of the better more intuitive helpful ones. Good job
What time frame you do buy your Option contracts? 2 weeks out? 4 weeks? Or longer?
Hey Steven! If I am selling, then I sell to open contracts 4-6 weeks out to maximize gains from theta decay. If I am buying, then I buy contracts about 6 months out to give the stock enough time to move in the direction I want and minimize how much I lose to theta decay.
@@JakeBroe can you make a video explaining all the Greeks of Options? I do been buying short term options (2-4 weeks out) and I’m not seeing the profits as I expected.
Jake, Very informative. This is the second video of yours for me. Now I have to watch all :)
I love how i started off learning options from you and end up getting updates of Ukraine war and knowledge about USA ICBMs
When you Sell to Close, is it OK to use a Market sell or is a Limit sell better?
Clear explanation yet on RUclips. Can you do a video on Rolling?
Solid video request! I will look in to it!
You have a good way of breaking things down for beginners. Wish I had access to info like this when I started trading 20 years ago.
Love you!. It seems like I have watched 100 videos and still confused. I should have come here first!
Made this concept easy to understand 👍
Hi Jake - thanks for the video. Can you tell me how purchase the stock if you own a call? If you bought a call and the strike price was hit, and you wanted to purchase the stocks so you could sell them on the market, how would you do that? Would you want to do that? I use CS
Hi Jake, On your spreadsheet examples, you do a buy to close only if you don't want to get assigned, is that correct? And you do that if it is profitable. If not profitable, you don't do the buy to close and just do the wheel (covered call)?
So timely .....thanks alot buddie, I lost all my asset just because I didn't have this information.
thank you very much, this is what really helped me understand how the transaction actually happened
Hey Jake, I'm rewatching some of your option videos and I'm still trying to grasp the sell to close/buy to close concept.
I guess if I originally buy to open a call contract, I would need to sell to close to exit the position. Prior to buying the call contract, is there a way to estimate or determine what the cost to sell to close would be if the stock went up or down XX dollars? That way you can determine your gains/losses in certain scenarios prior to entering into the contract.
Sounds like you are getting it Alan! What I do (and it's not exact) is I just look at the option chain. If the share price quickly moved, just look at the chain. For example if the shareprice went up $10, look at options today that are worth $10 more in the money. That's a way of roughly estimating how much you would gain.
Thank you for the content Jake! This was one concept I couldn't seem to understand, you've made this infinitely more clear for me.
You showed the numbers stating if you were up or down and the minus symbols, and I am wondering if you would please do a video on that. I don't know how to understand what I am seeing on my account, when looking at my cc's. Now since I am long on the stock and only selling for $4-$7 for a week long contract, it is not a biggie. HOWEVER, I need to learn how to understand what I am seeing so that I can improve my options trading ability. I would really appreciate this. Thank you
Great video !! Sold call - May 17 expiry - I will get paid 11225 for my 100 shares (a 1500 gain on my initial investment) ... OR I could buy to close now at a 500 loss...(905 to close minus the 405 premium initially made)... then sell the shares that are currently $7 above the strike price...which would $700 more than the assigned payout.... My questions : Are early assignments rare - even for a stock that is well in the money ? As the expiry date gets closer what will happen to the premium cost itself? No matter what I do now my upside is capped - which I'm ok with - just looking for the best way to access these shares to sell & reinvest.
Hi Jake, may i know why youre making money on VIAC when the current share price then was $40.49 and you sell a put on a strike of $41?
Hello I am new to and trying to learn options here and a little confused on how I should be proceeding with this trade. Any constructive advice would be appreciated. I also realize there are probably better stocks to trade options on, but I wanted to try with some thing cheap that I could afford to cover.
I purchased a sell to open contract for Tilray (TLRY) @ .61 AND 5.00 strike and covered it with 100 shares. It also says w/ call expiration of 1/6/23
If I were to close today @ an .08 what would that mean for my position. Am I better to close this position or let it ride to expiration.
I am also using TD as my platform.
Thanks for any help!
These videos are teaching me a lot….thanks
Very much needed, thanks man!
thank you for the great updates. How do I close a debit spread on Robinhood?
Thank you. Can you share how to roll a covered call and cash secured put?
Sounds like a good video topic! I will add it to my list!
Question: If I bought a call contract and later sold it but was just sold but not closed, who is responsible in the end. The original seller or the second seller. I was under the impression that by selling you removed your self from the contract. But its seems that it is not the case.
Hi, what if the holder exercise the contract. As a writer, you are obligated to buy or sell the underlying stock no? Is it possible to exit a position in the money before the expiration?
Hi, I see that this video was 2 years ago but I have a question about a covered call. I sold 3 covered calls on a stock that is already in the money, and I still have a lot of time left on the contract (years). I think it'd be best to try to close as soon as possible, once the dust settles on the share price, because I only see the uptrend generally continuing and I'd rather not be kicking myself with further missed gains. Is there a move that I can make to simultaneously sell my shares and buy to close y covered call options? Hence, not having the money to close right now, but use profits from the sale of the actual shares. Thanks in advance!
this was great Jake! your videos are all top shelf
Jake, Can you Short and go long on both sides of options? Can i short and go long on the call side, and do the same for the put side?
Kind of like a 4 way option for calls and puts?
Thanks
Great video Jake!!! Seeing the math for both examples will help out others. Keep up the videos and thanks for your service!!!!
Thanks for the support Daniel! Cheers!
Excellent video Jake! Warmest regards from Brazil !
I’m 4 mins in and I know I’m watching this on repeat for two straight days 😮
I think why people get confused is their trying to learn about calls and puts at the same time. I suggest getting a really solid understanding of calls first and then move on to learning about puts.
That might help! Cheers david!
Thanks for making this video Jake!
Thanks for watching deadleague! Cheers!
🤪. Ím so confused. In minute 1:11 you said “buyers are bidding, sellers are asking”, but in the option chain I think it’s the other way round. Is that right? If I want to buy a contract, I click on the ask column and sell a contract then click on the bid column.
Good stuff very succinct and on point for a beginner like me. Answered and validated my questions thanks…
Thank you Jake! you are the best.
Thanks for watching Eyob! I appreciate the support!
If you buy a call and it hits the strike price and you think the stock is going to continue to go up rapidly, is it still a bad idea to let it expire in the money?
Awesome vid!!! Thanks!
So if i bought a call option contract and sold to close am i still obligated to buy back whatever i need yo buy at the end of the expiration?
Man your videos are so great!
Hi Jake, on expiration day, if you are an option seller and the contract is in the money, what time do you get assigned: immediately at 12am on that day or at 4pm (when the stock exchange closes for that day)? Same thing if you bought a contract, do you have until 4pm on expiration day to sell to close if you don't want to exercise?
Hey cleaner! Options contracts are only bought and sold what the NYSE is open. So you have until 4pm Eastern on the day of expiration to buy and sell. After market close on expiration, you have 1.5 hours to contact your broker or respond to an e-mail saying you want to exercise. Stock is then exchanged at some point over the next day. Usually takes 48 hours for everything to settle. Personally, I recommend never holding a contract in to expiration. Always buy to close or sell to close all your positions.
@@JakeBroe Awesome! Thanks a lot for your detailed answer Jake.
Awesome video and excellent examples.
In another video you said to close out of your positions when you have reached 70 percent of the option contract value, how would you calculate in fidelity, great video, your help would be much appreciated
Hey Nicholas! You can just look at your cost basis for the contracts and use a calculator to figure out what 70% is. Honestly, anything above 50% and it is probably worth closing the contracts and then finding a new position to take.
@@JakeBroe 👊🏻👊🏻
Dude! I have watched several videos trying to understand STO (puts) to get an understanding of it. I mean wasted all morning long trying to find a decent explanation. So happy i found your video. It explained it perfectly and the examples were perfectly simple to understand and were within the lines of your topic. Thank you so much!!!!
Great video, thanks for the knowledge
For your last example when you were underwater with discovery why wouldn’t you just roll that down and out until you were net positive? I have never been assigned
So, Jake if I pay the premium for buying a leap at a $10 strike price and say between the time I paid premium or bought to open, and 20 days before expiration the stock price is $30, do I just sell to close and take my profits?
Thanks for making this video
Thanks for watching Josh! Cheers!
If you exercise an option to buy and don't have the funds to pay for 100 shares ,will schwab sell it for you in a combo trade without a trade violation? What if no one will buy your sell to close?
Hi Jake, on Scenario 2, why would you sell to close always? Don't you want to get the stock at the lower price and keep the stock, especially if the stock is rising?
Because maybe you dont have enough money on your acount for buying 100 stocks.
If you are the seller and the option expires out of the money, you still have to "buy to close" the position no matter what right? You have to bring the "-1" back up to "0"? Is there a time frame from when you must exit your position? Like before the Expiration date of the contract?
Hey Erick! This is not correct. If the contract you sold (-1) expires out of the money, then the person who bought it (1) will not exercise it at expiration and both people go back to (0). Nothing to buy to close!
Good and simple, thanks.
You are very welcome Rider! Cheers!
Hi Jake, it sounds like when you sell to close a call contract you bought you have to set contract terms such as a strike, premium and expiration, as you would if you were selling to open a call contract. Is this correct? Or when you sell to close are you completely out of that contract? Thanks!
You can set the premium price, however you must 'sell to close' the exact same contract that you 'bought to open.' The contract you are selling to close must be the same expiration date and the same strike price. For example, if you bought 1 contract of Amazon with an expiration date of Aug 19, 2022 and at a strike price of 160, you MUST sell to close the contract of amazon with the expiration date of aug 19, 2022 with the strike price of 160.
Excellently explained! Great. Thank you so much!
THANKS FOR EXPLANING
Thanks for watching Abnet! Cheers!
Good video 👍👍! Going to check out more of your content
So you can get caught holding the expired contract if you try to sell too close to the expiration date? No one will want to buy it if your selling your call?
I didn't really understand what sell to close means if you a "buyer"... but here is my scenario : I want to buy a option call i'm bullish on with a strike price let's say 40$ that expires in 2022, then the price get's to 1000$ and we are still in 2021, how do I sell it instant before it expires to get my money ? is that the sell to close or what do i need to do ? :) hope someone can help best regards
Hi Jake, really appreciate this video as I’m hoping to “buy to close” soon on my first cash secured put. Quick question for you though, If I get assigned, since the cash is “secured”, do brokerages automatically make the trade for the assigned shares or is there something I’ll need to do at that point? Just haven’t been through the process so it’s a bit of an unknown. Thanks!
Hey Ryan! If you are the seller of a call or put, and the contract expires in the money and is exercised, then you don't have to do anything. Your broker will handle it all automatically.
As a PUT seller, you hit BUY to "BUY TO CLOSE" the position before expiration?
How would you know if you are the original seller?
Great content Jake! Very well explained! Very helpful!
Thank you very much for sharing your knowledge and experience!
So when buying a Put. I would also “buy to open” and “sell to close” to exit?
Thank for the clarification can’t thank you enough
Thanks for watching Hassane! Cheers!
Been playing with options and had some success. Who actual buys an call option that has not expired?
If you BUY a long put, when you sell to close, you don't have to put up any more money, right?
If you BUY a long put, is it possible that you CAN'T sell to close even when the put goes in the money?
EX: You buy Apple trading at 150, you Long put option at 75. The market tanks and Apple goes to 60. Is it possible no one will buy your option to close, so that you are FORCED to exercise, and pay for 100 shares of Apple at 60, before selling them to the original put seller, for 75?
Great videos. Thanks.
If you buy to open either a call or put, then you paid a premium for the contract. That is the most you can lose. You can sell to close it at anytime for what it is worth to anyone else who might want to buy it. Large cap stocks like AAPL have computers buying and selling at all times, so you can always find a buyer if you want to sell. However, if you buy contracts on small cap stocks, there might be no buyer and you would then have to exercise and force the exchange of shares to make your profit.
When you buy to close and pay a portion of the profit back. Do you keep then difference?
Yes! You get the difference and that is your profit or loss.
Thanks for answering my question. I’m now your fan. I will subscribe
Well, I’m getting closer to understanding the stuff
Awesome! Glad it's starting to make sense!
Funny...I understand every word you are saying. But the way you put them together like that? Not so much...
I actually am familiar with Scenario 4 but would like to see an example of scenario 3 sell to close. But you didn't provide...😆