Hello all. I'm currently new in trading options and have a quick question. Like an idiot I got in a long position with 5 calls totaling 275.00 right before market close today in NUAN prior to their earnings report. To my dismay they reported worse than expected and their stock is now down 1.20 in after hours. My question is can I loose more than my investment of 275.00 on the option? Thank you
no. when you buy a call your risk is limited to the premium you pay. not to be harsh but you have no business playing with options if you dont know these simple basics.
No. The stock can go to $0.00 and the most you can lose is $275. Just for your info... It's is all about probability...the more ways to make money the less the money you are going to make....and the less ways to make money the more the money you are going to make. Based on your (roi) your strategy is trying to make a lot of money, so your probabilities to make it are less. Have you ever thought about going to Las Vegas instead of buying options ?
Actually if you are careless, you can easily lose far more than the price of the long calls. How? If you keep them until expiration and they go in the money, unless you instruct your broker not to they will auto-exercise, and you will buy the stock before the open Monday (usually 100 shrs per cntrct). If the stock drops before you can get the shares sold, too bad...
Wayne Gibbous, he said he is long calls in other words he bought calls. All he can lose is the $275. If the calls get in the money he has the option of buying the stock, not the obligation.
I don't understand. The OP bought the call option. If the option is "In The Money", how can you lose money when/if exercised? Or else why is it called "In The Money"?
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Did you read his post in the link I provided? He explains everything. Keep in mind that the options ended up $0.30 ITM - value of option $0.30 - how much did he pay for them? A lot more than $0.30. And the $10,000 loss was in ADDITION to what he paid for the options. -----
If the call is exercised, and you have no offsetting position, you hold the stock Monday morning. Then, if the stock tanks, you lose.