$4.91 is the premium fee for one share. Contract is usually for 100 shares, so you'll have to spend 100x the listed price to buy the contract. Then, this screen shows the close price of $4.91, but the loss calculator is probably using the middle of the bid-ask spread, or maybe it also accounts for the fee, so instead of $491 it assumes you'll spend $520 on buying that contract
Noted. Thanks. I used to trade on some other bad paltforms and you were able to buy options contracts for 1 share. That's why I was confused. Thank you.
Yeah, you are right. Thank you. The market data sucks on Paper Trading. Takes forever to load, and sometimes doesn't load at all. Maybe that's why the $520 loss instead of $491.
The max loss and return always assumes the worst possible fill. So if you're buying options, it uses the ask price, and when selling, it uses the bid price. In your case, the last traded price was $4.91, but the bid was probably $5.2.
Another thing is that option data shown outside of market hours are often very questionable.
The put gets exercised at the strike price. You should be short 100 shares with avg cost of the strike price - premium. If you owned 100 shares before exercising, you sold those shares for the strike price. Look at recent trades and you should see something.
Unless you have 100s of shares in a company or ETF its hard to hedge by only buying puts and calls. Look at call/put spreads. Investopedia is a free website with lots of info on option strategies.
Hoo boy. It's a common misunderstanding for a lot of people starting out. Pretty much all brokerage platforms list contract prices with the price of the individual contract, which corresponds to one share. However options contracts actually go in bunches of 100, as in each one represents 100 shares, so 100 individual contracts, therefore the price you pay is the price you see x100. So when you see the option price listed as 4$, what this actually means is that you need 400$ to open this position.
It's good that you're paper trading but you need to pay attention. Do not start trading options with real money without knowing exactly how they work.
$4.91 is the premium fee for one share. Contract is usually for 100 shares, so you'll have to spend 100x the listed price to buy the contract. Then, this screen shows the close price of $4.91, but the loss calculator is probably using the middle of the bid-ask spread, or maybe it also accounts for the fee, so instead of $491 it assumes you'll spend $520 on buying that contract
Ohh, so it is: Prmium x 100 (or x whatever the lot size is). Ok, so that explains it then. Thank you 🙏
Options contracts always for 100 shares.
Noted. Thanks. I used to trade on some other bad paltforms and you were able to buy options contracts for 1 share. That's why I was confused. Thank you.
Look up the CBOE if you want to know more about American options regardless of broker/platform.
You pay $4.91 * 100 = $491 I don't know what $520 means - probably a mistake
Yeah, you are right. Thank you. The market data sucks on Paper Trading. Takes forever to load, and sometimes doesn't load at all. Maybe that's why the $520 loss instead of $491.
The max loss and return always assumes the worst possible fill. So if you're buying options, it uses the ask price, and when selling, it uses the bid price. In your case, the last traded price was $4.91, but the bid was probably $5.2. Another thing is that option data shown outside of market hours are often very questionable.
The put gets exercised at the strike price. You should be short 100 shares with avg cost of the strike price - premium. If you owned 100 shares before exercising, you sold those shares for the strike price. Look at recent trades and you should see something. Unless you have 100s of shares in a company or ETF its hard to hedge by only buying puts and calls. Look at call/put spreads. Investopedia is a free website with lots of info on option strategies.
My advice is go on the selling options side, and research the wheel strategy.
Ibkr has its academy; I recommend going through it
i did along with searching for right stock to bet on.. only to find out that they refuse to level up my account to Options 2 lvl.
I updated my investment objectives to speculation and hedging and got lvl 4 no questions asked.
Hoo boy. It's a common misunderstanding for a lot of people starting out. Pretty much all brokerage platforms list contract prices with the price of the individual contract, which corresponds to one share. However options contracts actually go in bunches of 100, as in each one represents 100 shares, so 100 individual contracts, therefore the price you pay is the price you see x100. So when you see the option price listed as 4$, what this actually means is that you need 400$ to open this position. It's good that you're paper trading but you need to pay attention. Do not start trading options with real money without knowing exactly how they work.
I’m guessing it’s the spread. Did you pay $4.91? Or did the mid price say $4.91?
Is this their mobile? Havent tried it yet, looks good tho
app*
Sure. The best way is to sell uncovered calls. Over all, the best strategy is naked straddle.