The Rokslide Stock Traders Thread

Exercised my first option contract today, it was a big hit. A couple months ago I opened some $5.50 puts on LCID. Contract expires tomorrow and today it dropped another 15%. I sold to close my position this am.

Question for you more savvy option traders. Did I have to sell to close today or would my option automatically sold tomorrow upon expiration? I am really green at options, but my first was pretty profitable atleast. Not 100% if I left meat on the bone or played it right?
 
HuntHarder said:
Exercised my first option contract today, it was a big hit. A couple months ago I opened some $5.50 puts on LCID. Contract expires tomorrow and today it dropped another 15%. I sold to close my position this am.

Question for you more savvy option traders. Did I have to sell to close today or would my option automatically sold tomorrow upon expiration? I am really green at options, but my first was pretty profitable atleast. Not 100% if I left meat on the bone or played it right?
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First off Congratulations on the win but your making me nervous for your bankroll lol

I would suggest studying and understanding what goes into an option contract pricing (intrinsic and extrinsic value) and how they relate to the greeks of options if you haven't already.

As for what you should have done, it depends on why you bought the put contract for (i.e. protection on LCID stock in your portfolio or cause you were short on LCID). If you did not plan on exercising the put contract (i.e. selling 100 shares of LCID at $5.50) then you did right by selling the contract for what its worth now. You would need to check with your broker on the rules for contracts in the money on expiration day. Some auto exercise if you are penny in the money at expiration date and some need to be manual (call in). It possible that since you were long a contract , the contract could have expired tomorrow and you would have lost all value on the contract. Typically if you are short a contract you can expect to be exercised when in the ITM.

I highly suggest writing out some rules/goals for your option trading and stick to it (i.e. I'm targeting 50% profit and will close if I'm -200% on the trade.) Winging it is dangerous to your wallet especially if you don't fully understand what you are buying and selling and how the contracts work (reminds me look into American vs European option contracts). Stoked for you that you started your option journey on win! Good luck with the rest of it! So much to learn and very fun and rewarding skill to have.
 
jbosk15808 said:
First off Congratulations on the win but your making me nervous for your bankroll lol

I would suggest studying and understanding what goes into an option contract pricing (intrinsic and extrinsic value) and how they relate to the greeks of options if you haven't already.

As for what you should have done, it depends on why you bought the put contract for (i.e. protection on LCID stock in your portfolio or cause you were short on LCID). If you did not plan on exercising the put contract (i.e. selling 100 shares of LCID at $5.50) then you did right by selling the contract for what its worth now. You would need to check with your broker on the rules for contracts in the money on expiration day. Some auto exercise if you are penny in the money at expiration date and some need to be manual (call in). It possible that since you were long a contract , the contract could have expired tomorrow and you would have lost all value on the contract. Typically if you are short a contract you can expect to be exercised when in the ITM.

I highly suggest writing out some rules/goals for your option trading and stick to it (i.e. I'm targeting 50% profit and will close if I'm -200% on the trade.) Winging it is dangerous to your wallet especially if you don't fully understand what you are buying and selling and how the contracts work (reminds me look into American vs European option contracts). Stoked for you that you started your option journey on win! Good luck with the rest of it! So much to learn and very fun and rewarding skill to have.
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Thanks for the reply. Like I stated before, this was my first option contract I had ever done. I trade thru fidelity, so it kind of guides you thru the buying part. I initially was wanting to shrot LCID, however with the amount of shares being shorted, Fidelity wanted to charge me interest to short LCID. I decided to try this option contract instead. I made money, but still am unclear on the whole closing part of it. My only options where ( sell to close, buy to open or roll). I am self taught ( thru a bunch of research) on stocks and am now trying to learn how to option trade. This is my personal account, so no big deal if I lose, I feel like it might be the price of admission at the start. I know when I first started stock trading 10 years ago, I lost for a little bit, but now am profitable every year. At any rate, I chose the sell to close option, and still don't know if I picked the right thing. I made money, but not sure if I left money on the table.
 
HuntHarder said:
Thanks for the reply. Like I stated before, this was my first option contract I had ever done. I trade thru fidelity, so it kind of guides you thru the buying part. I initially was wanting to shrot LCID, however with the amount of shares being shorted, Fidelity wanted to charge me interest to short LCID. I decided to try this option contract instead. I made money, but still am unclear on the whole closing part of it. My only options where ( sell to close, buy to open or roll). I am self taught ( thru a bunch of research) on stocks and am now trying to learn how to option trade. This is my personal account, so no big deal if I lose, I feel like it might be the price of admission at the start. I know when I first started stock trading 10 years ago, I lost for a little bit, but now am profitable every year. At any rate, I chose the sell to close option, and still don't know if I picked the right thing. I made money, but not sure if I left money on the table.
Click to expand...
Gotcha, well short answer when you sold to close it was probably 99% intrinsic value of the option at that point with time decay basically gone. It possible if you sold sooner it might have been worth more due to time value and depending on volatility. But the 15% drop that day you sold definitely helped make it worth more and assuming the price stayed the same Friday, your contract was worth a little more when you sold than if you sold on Friday
 
Not stock related but my final payment on my pickup goes through on November 1. Thats not a bad feeling.

Havent really been buying much as far as stocks go. Just my standard monthly purchase of ETFs. Been rolling some Tbills but those arent as lucrative anymore. Mostly just doing it for the tax advantages. Will probably start rolling the 500 bucks a month from the pickup payment into Tbills as a safe way to save/invest funds to get my wife a newer car in the next couple years.
 
Say, does anyone here have experience with Fidelity? The Idaho State Board of Education is replacing TIAA CREF with Fidelity this December and our accounts are all going over (except for annuities).
 
Rotnguns said:
Say, does anyone here have experience with Fidelity? The Idaho State Board of Education is replacing TIAA CREF with Fidelity this December and our accounts are all going over.
Click to expand...

The company I work for uses Fidelity. I use a brokerage manager for it and they out proform the Fidelity accounts hands down.
 
Rotnguns said:
Say, does anyone here have experience with Fidelity? The Idaho State Board of Education is replacing TIAA CREF with Fidelity this December and our accounts are all going over (except for annuities).
Click to expand...

My 401K is through Fidelity. The packages we have to select from are fairly limited and generic -can't add any bitcoin etfs to my 401k (even though Fidelity has some) , for example, but it performs well, app is decent. I have my own, self managed IRA and exchanges to add some excitement and risk to my financial experience.
 
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