$Tesla (TSLA.US)$ am new on option trading.. I plan to buy c...
$Tesla (TSLA.US)$ am new on option trading.. I plan to buy call but not sure what moo moo work. I read the moo moo document don't understand. Just want to know if my strike price is 440 price i plan to buy 440.02 as bid and moo moo said margin is 2.00 what does thus mean.
Question
1) When the contract will expired if I buy on Monday 16 Dec?
if my contract expiry with such situation below :-
A) if the price down till 400. What will be my lose?
B) if the price rise till 442 how much i will gain?
2) Will i need to buy the whole 100 contract when it expiry?
Any advice will be thankful
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
RedLotus28 : You can try Papertrade first before considering real trading.
10baggerbamm : so the first thing if you don't understand options is read everything you can there's plenty of online videos for understanding option basics understanding the terminologies understanding your risk is it limited is it unlimited you need to understand about time value and decay and volatility premium. I would also caution you that buying a put or buying a call statistically 90% of the time you will lose regardless of how confident you are.
using your example not factoring in fees and assuming that you're buying on the ask and selling on the bid.
one contract would be at the close prices I'm using would be 13 per contract so $1,300 for December 20th expiration of 440 strike .
if on expiration day let's say 359 and 50 seconds with a market closing at 4:00 p.m. if your Tesla is any less than $453 on the common stock you will lose principle. so your break even is 453 because it would be a strike Price Plus your premium that you pay.
the $13 price of your initial purchase is based off of the time value so the greater the time that you go out the more you pay for an option contract that's number one and number two you have a volatility premium the more a stock goes up the quicker it goes up the more volatility premium that you will be paying in also inversely the faster that option contract will decay as it approaches expiration.
I hope that's clear for you I'm not 100% awake right now it's only 2:47 in the morning East Coast time
if you have any other questions ask
Bull Let Bull OP 10baggerbamm : wow!!! thanks mate for making the time to explain.. will take your advise to see some ontime video.. If there is anyone from the moo moo admin. It will also be good to make a video with moo moo product to showcase how a user can buy and sell a put or call it will be great.. thank yo
10baggerbamm Bull Let Bull OP : MooMoo has excellent educational information on understanding options from a options 101 starting with ground zero no experience all the way to highly advanced spread trades that I don't even do. this platform is one of the best resources I've ever come across it is superior to anything I've ever used in the past it blows away Schwab it blows away Fidelity they're not even in the ballpark. all you have to do is in that little circle on the upper portion of your screen type in understanding options options basics and you will be linked to the area on moo moo that explains everything and you just click whatever you want to learn about