new here, got a some question regarding put option. if the put option is 3 month, can I exercise the put anytime within that 3 month or only happen at the end of 3 month? also any recommendation link/video/article on option trading strategy/tip/guide etc.
American option (Most equity options):YES European optionMost cash settled indexes): NO Why would you? There are reasons to early exercise calls, but I can't think of any with puts. If you are a beginner, your can start here. http://www.cboe.com/learncenter/courses.aspx Don't do any trading until you completely understand what you are doing.
It depends on what type of option you hold! If an American style option, answer is yes, if European style option, answer is no. However, The "exercise" of an option typically is not in your best interest. Consider selling the option instead of exercising, for a more profitable exit.
There are times when early exercising puts makes sense: option is very deep in the money. If you exercise you can use the cash received to earn the risk free rate.
I guess if the PUT is DITM, the opportunity cost of the capital used might be better with the short stock if the stock stock fee is less.
IMO ........ Any options (puts and calls) that are ITM should be sold-to-close. 99% of option traders have no intention of trading the underlying.
well the put would price the stock fee same as the stock. if you had a delta hedged ditm put, it would certainly make sense to exercise for financing.
ok, I'm just interest in protect my share, say I bought 1000 share for $100 each, I belief the share will raise but in case it doesn't I like to have an insurance. if my share drop below certain level, and I would just prefer to get my strike price back within anytime of 3 month period and move on to buy other stock I belief will raise at that moment.
Options are a poor way to "hedge" a stock position. Too expensive to buy and too volatile to sell, that is why 99% of option traders have no intention of trading the underlying.
IMO, if you already own 1000 shares of x that's shown movement, buy 20 -.50 delta, Jul puts with a tight bid/ask spread, and an OI of at least 1000. Make sure you have some vol, otherwise nothing might happen and theta will eat you. Some nice movement will open the door for delta neutral adjustments, and lock in profit. Good luck!