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#731 - How Soon Can You Sell Options Before Expiration?: Hey everyone. This is Kirk here again at Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “How soon can you sell options before expiration?” I think this question that was submitted online is basically...

#731 - How Soon Can You Sell Options Before Expiration?: Hey everyone. This is Kirk here again at Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “How soon can you sell options before expiration?” I think this question that was submitted online is basically...

A partire dalThe "Daily Call" From Option Alpha


#731 - How Soon Can You Sell Options Before Expiration?: Hey everyone. This is Kirk here again at Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “How soon can you sell options before expiration?” I think this question that was submitted online is basically...

A partire dalThe "Daily Call" From Option Alpha

valutazioni:
Lunghezza:
4 minuti
Pubblicato:
Sep 22, 2019
Formato:
Episodio podcast

Descrizione

Hey everyone. This is Kirk here again at Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “How soon can you sell options before expiration?” I think this question that was submitted online is basically like a two-part question. One part is with regard to entry of options trading. The second part is probably with regard to exiting a position. I’ll take them both just in case the context might have been a little bit different. But in the case of option trades, how soon can you actually sell an option contract before expiration? You could sell them hundreds of days before the actual contract expires. You can start a position seemingly hundreds and hundreds of days out from expiration. Actually, right now, the furthest out contracts that I see for the SPY is 850 days out, so basically January of 2020. That’s how far out you can do it. You can sell the contract right now and you can wait 850 days until you reach expiration. I probably don’t suggest going out that far, but if you wanted to, you could trade those further out contracts. The second context part of this question might be how soon can you sell an option before reaching expiration in the context of how can you get out of the position and how soon do you have to do that. With most equity option positions that you’re going to be trading, especially the ones on large ETFs and stocks, you can choose to reverse the option contract itself well before expiration, basically at any time before expiration up including the day that it stops trading. The last trading day that that contract has in a particular month, you can remove that option contract, sell it back to the market, buy back to close your position, basically just reverse the option trade itself before expiration. The only time that you have this difference in how things expire and how you can trade contracts is when it comes to exercising contracts like index options or European-styled settlement options. Those contracts can only be exercised and converted at expiration into stock, but that doesn’t mean that you can’t trade out of those contracts in advance. The only part on the European contracts or most index options which are cash settled is the conversion of that option contract to underlying shares or cash and that conversion only happens at expiration, but it has nothing to do with the fact that you can actually close that position or buy back a position to close the contract in the open market before expiration including the last trading day. Hopefully that helps out. As always, if you guys have any questions you want to submit in, send them over to us. Shoot us an email with a question. Hit us up on Facebook, Twitter, Instagram, all different places and everywhere @optionalpha. Until next time, happy trading.
Pubblicato:
Sep 22, 2019
Formato:
Episodio podcast