I think most people using options are using US brokerages. I know European options have some different rules about when you can exercise, etc.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Newbie Options Trading
- Thread starter Jonathan Hewitt
- Start date
-
- Tags
- investing options TSLA tsla stock
I think most people using options are using US brokerages. I know European options have some different rules about when you can exercise, etc.
I'm from Norway, and I use Interactivebrokers.com, so I expect you can use it too. The commision is very low. They have som requirement about minimum balance in the account, and you have a lot of paperwork that is requested. Pluss you need to pass a test on options. Remember Investopedia is your friend, so I recomend to have it open, while you take the test.
Look up the details at their homepage. Good luck.
Wshowell
Member
Check out Saxo. They have a newer options program and are doing a lot around options education for beginners.
I think I know the answer to this but thought I'd ask for insight...
I have some essentially worthless SPWR calls with a expiration date of 1.17.17. I'd like to sell them this year to offset gains made from some better decisions I made purchasing/selling NVDA calls. I have been trying to sell them for .01 but no one is biting. Can I buy them from myself to create the sale in 2016? I guess the risk is when I buy these specific strikes that I'd be selling, I might actually be buying someone else's that are also for sale. Or I might be violating some securities law.
If this approach isn't feasible, any suggestions about how I can claim a loss for these in 2016? Or any general advice in life? Thanks.
I have some essentially worthless SPWR calls with a expiration date of 1.17.17. I'd like to sell them this year to offset gains made from some better decisions I made purchasing/selling NVDA calls. I have been trying to sell them for .01 but no one is biting. Can I buy them from myself to create the sale in 2016? I guess the risk is when I buy these specific strikes that I'd be selling, I might actually be buying someone else's that are also for sale. Or I might be violating some securities law.
If this approach isn't feasible, any suggestions about how I can claim a loss for these in 2016? Or any general advice in life? Thanks.
If you call your broker they can do a "removal of worthless securities." I'm not sure if that option counts as "worthless" since it is not expired yet but if no one is buying them for $.01 then I would consider them worthless? You will probably have to pay some extra commission to have them do the transaction. Doesn't hurt to call them up and ask!
Worthless Securities
I agree with Jonathan's suggestion, but just wanted to add that buying them yourself is an extreme version of a "wash sale", and definitely won't work.
Yes, this is the way to go. For the IRS, to deduct losses on worthless securities, you need to keep documentation that the securities *became worthless* in 2016. IMHO, that you attempted to sell them for $0.01 and there were no takers is pretty good evidence, though I have no idea whether the IRS will agree -- but now you know that you should keep your records of your *attempts* to sell them!
Good advice all, thanks. Have done the worthless security thing with stocks before (unfortunately), will try with the options.
So have noob question, I have 2 calls for 2 stocks (tsla and amd) that both expire on the 17th. I am ITM on both of them and should take a decent gain if i can manage sell or exercise them. Why when I go to sell is there a $30 fee? Is this because its not the 17th yet? I am using capitalone for this if that is any help. Thanks!
looking up your broker online I found this: Capital One Investing
So yeah, that's what it looks like the source of the $30 is, which is insane. The highest I had heard of before was $15. My broker (Optionshouse) only charges $4.95 for exercising. Is there a reason you're trying to exercise? Generally people sell their long options, which in this case would allow you to pay the normal commission rate.
So this is the first call that actually worked out (the others have just expired worthless), so I was looking though what I was able to do and saw the $30 and was like WTH is that. So normally the idea is to just sell the option, instead of buying the underlying asset?
Well, it depends what your goal is but yeah, most people sell the option and keep the profits. If you take the stock then your new cost basis is option cost+stock cost, which means you would have done better just buying the stock in the first place.
Also, you might want to do some more readings on options before you make more trades, especially because you mentioned that most of your options have expired worthless so far. I would hate for you to lose more money before having a a little more knowledge of options because they are the fastest way to lose all your money. Another option is to open a paper trading account where you can trade options using fake money.
As far as resources this thread is a good start for TSLA options. There are several websites. My favorite is Tastytrade, specifically their "Where do I start Options 101" (WDIS) series for new people. Options as a strategic investment is a good book if you like books.
There is an alternative strategy involving deliberately buying calls with the intent to exercise (deferring taxation on the gains, at least for US taxpayers) in order to gain leverage temporarily for a time period less than the option's lifetime; for this the option's premium is effectively like paying interest on the loan, and you have to calculate the loan balance and the interest rate to figure out whether it's better than buying on margin. I'm doing that right now. It's not a very common strategy and you generally do it with deep in-the-money calls.
If you're buying out-of-the-money calls (almost always a terrible idea, most people lose a lot doing that), you probably want to sell them rather than exercising them, unless they end up really deep in the money before expiration (which *actually might happen* with my most speculative TSLA call).
Options are *complicated* and I'd recommend avoiding them until you've really, really got your head around everything. For years I only did one options trade: selling out-of-the-money cash-secured equity puts on TSLA. I had analyzed enough scenarios for these to be happy with all outcomes, but it still took me over a year and reading Jonathan Hewitt's comments to figure out the effect of volatility. Each time I've gone into another type of options trade it's been days of research before I felt I understood it well enough to try it. Every time you do a trade you want to analyze every scenario, and then look at alternative ways of getting higher return or lower risk -- and with options, there are a lot of scenarios and they're quite complicated.
If you're buying out-of-the-money calls (almost always a terrible idea, most people lose a lot doing that), you probably want to sell them rather than exercising them, unless they end up really deep in the money before expiration (which *actually might happen* with my most speculative TSLA call).
Options are *complicated* and I'd recommend avoiding them until you've really, really got your head around everything. For years I only did one options trade: selling out-of-the-money cash-secured equity puts on TSLA. I had analyzed enough scenarios for these to be happy with all outcomes, but it still took me over a year and reading Jonathan Hewitt's comments to figure out the effect of volatility. Each time I've gone into another type of options trade it's been days of research before I felt I understood it well enough to try it. Every time you do a trade you want to analyze every scenario, and then look at alternative ways of getting higher return or lower risk -- and with options, there are a lot of scenarios and they're quite complicated.
I'm told commodities futures are a faster way to lose all your money, but I haven't looked into those!
Oh shoot, you got meI'm told commodities futures are a faster way to lose all your money, but I haven't looked into those!
I agree, leverage on futures is insane. Most of the contracts are pretty big also. I've looked a little bit into those and decided I will wait until my account is a little bigger first, haha.Pricing | TD Ameritrade charges $19.99 for assignment and exercise.
Yeah, it's usually better to close a long call by selling it than exercising it.
Except that it seems like their commissions (Cost of Trading Equities, Options & ETFs | Charles Schwab) are much higher than what I negotiated TD Ameritrade (well, Thinkorswim) down to. I pay $1.25 per contract. There's no base commission or ticket fee. And, TD AM lets you close out short positions that are down to a nickel or less for free.
At Schwab prices, I would lose $ on commissions for some of the trades that I do and not make it even worth it to even open the position.
Depends what sort of trades you do, obviously; different brokers are better for different trading styles. I'm mostly selling puts which expire or execute in order to build up my TSLA position and/or earn income. If you're a day trader Schwab specifically doesn't want you and you should be somewhere else.
I do have a negotiated rate from Schwab at this point, though, since I threatened to go to IB.
So.. I picked some more shares in the low 300's a couple weeks ago (we know how that went). Thinking of shifting some of that to a DITM J20 call which would end up with a lower breakeven price than the shares. Seems low risk based on Tesla's recent progress. What should I watch out for?
Similar threads
- Locked