By Melody
We are hoping this to be an easy and simple lesson to introduce options to you. By following Options Basics' articles, you should be able to understand options and how to utilize options to either profit or protect your stock.
Time value is a big part of an options' value. It is the part of an option price that is based on its time to expiration. If you subtract the amount of intrinsic value from an option price, you're left with the time value. If an option has no intrinsic value (i.e., it's out-of-the-money) its entire worth is based on time value.
Let's look at an example:
If you look at the screenshot above, the current price of Tesla is $845.15. This means options with strikes higher than $845.15 are out-of-money options. These options have no intrinsic value, all of its option's prices are based on their time value.
If you look at the screenshot above, the current price of Tesla is $845.15. This means options with strikes higher than $845.15 are out-of-money options. These options have no intrinsic value, all of its option's prices are based on their time value.For in-the-money call options, options in the screenshot above with strikes lower than the current price, their time value would be their option price minus the intrinsic value(the amount that option is in-the-money).
Please stay with us for more on options basics!
Please stay with us for more on options basics!If there is anything that you didn't understand in today's Options Basics article, simply leave a comment below and we will try to explain more to you!
Comment(14)
I don’t need this kind of education. I have being trading options for long time, I especially like to sell puts. My account with other firm gives me day trading power 3M. This new account limits me to buy call and buy put only so it won’t work for me. Please review my application. Thanks
WOOOOOT, M8?
Hi. These are for entry level moomooers who are interested in learning options and maybe get into trading options. Probably not for advanced traders like you
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Regarding your question about selling options, did you try changing your options level in your account? That might solve your problem!
Mr experienced 714548 i am novice i really need to read these articles so please ignore this article and ask your question direly
thank you very much
Which platform Would you recommend for option trading ?
Sorry, since I am new with Moomoo so I can’t judge which trading company is better. I heard Moomoo is very good and that is why I opened an account. I need to get familiar with moomoo platform and start trading asap 😊
how do u place sell put
Higher than strike price-out of the money. Under the strike price - in the money.
easy peasy!
when can we do option strategies in moomoo?
I have sold a put option on Stock A. The current price has gone below the strike price prior to the expiration date. Would the forced purchase of 100 x stock A take place immediately?
k
My options journey started by my me telling myself I'll never really understand options unless I just do it. Read one guru course: 50 ema and 100 ema and literally just staring at charts (trying to learn indicators) and off I went.
I tried to adapt based on my results some have been great some have been horrible some have been exercised automatically didn't know what happened so much money in my account I told it immediately not knowing what really just happened. it was a good underlying stock long term didn't know I could have just held on to those it was the whole margin thing that automatically I get approved when my account goes above 2000.
Minus 800 lesson learned once I examined what happened.
sorry long comment bottom line is I'm very grateful for these tutorials articles. it's nice to know what all these terms are and what they actually mean and how they're relevant see you the option maybe it might just keep my wins consistent. Will see and thank you so much gooroo-mooers
haha so cocky while being sarcastic lol
No only at expiry
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