Do Option Sellers Have a Trading Edge?

Discussion in 'Options' started by xelite777, May 9, 2014.

  1. Magna

    Magna Administrator

    Hey Guys, the thread is called Do Option Sellers Have a Trading Edge? Let's please stay on topic and if you want to discuss other things like the Fractional Reserve System then start a thread in the appropriate forum. Thanks.
     
    #211     May 19, 2014
  2. You are absolutely right Magna, terribly sorry for these off-topic comments.
     
    #212     May 19, 2014
  3. My apologies as well... Will stop.
     
    #213     May 19, 2014
  4. That was a strange tangent true story... Option selling has an edge sometimes is what my answer is.
     
    #214     May 20, 2014
  5. guy Tyler

    guy Tyler

    You established the following position:

    Long 100 ABCD 150 Call
    Long 100 ABCD 150 Put

    If the price of ABCD is $150 at expiration, what is the resulting ABCD position in your account on the business day following expiration:

    a. Flat or no position in ABCD
    b. Long 100,000 shares of ABCD
    c. Short 100,000 shares of ABCD
    d. Both B and C

    Answer: a -> is this correct?
     
    #215     Apr 30, 2015
  6. Well b and c and d are all impossible since 100 contracts at 100 shares is 10,000 shares. So by the process of elimination a must be correct.
     
    #216     Apr 30, 2015
  7. FSU

    FSU

    The answer would be "A" If you are long options, you are in the drivers seat regarding exercise. If the stock goes out at exactly 150, neither option would be auto exercised as neither are in the money and would expire worthless. If the stock goes out even .01 lower or higher your in the money options would be auto exercised, although you have the ability to request the broker not exercise the options.
     
    #217     Apr 30, 2015