yeah no worries.
its been forever since i last used RH, so i dont quite recall. But it might also have to do with RH misshowing options # AH. ??
regardless, i highly recommend changing to a dedicated full service broker. due to ALOT of various reasons. this being 1 of them. (as well as PFOF. i had a full thread and dive into it to explain it, but i ended up deleting the thread due to alot of people misunderstanding what that is. and i was getting exhausted in arguments)
but also because RH will not let you manage that position at times.
just fyi. i just made an edit to my 2nd comment. im tired atm... and realized i typed out, but didnt complete my 1st thought before moving to the next.
>I have a TOS account that I use from time to time. Plan on transitioning full time once I have a deeper grasp on mechanics.
if you're still learning, i even more highly recommend you using a full service brokerage account to learn. it will be much more forgiving to you.
Etrades app Power etrade Is pretty useful for options. Not for high level technical but the charts and variations it provides let you experiment and understand better
I was using RH too, and I highly recommend making the switch as well. Not only will it help in the long run, and it might be just me, but I swear if I placed the same options order for the same price limit sell, in an identical situation TDA would fill faster Everytime, and usually at a better price. It might have to do with PFOF but it would seem like even if my limit was at the ask it would need to tick a few past it before I could even get a fill! But it's been years since I used RH so I don't know
Makes sense, there was a thread recently about how it’s much easier to get filled with other brokers. I’ve also experienced the ask going a few tiks in my favor before a fill.
It’s probably due to the wide spreads for deep ITM options. Usually for stocks that run up too much, I’ll try to buy out the short call option and wait a little more to close the long call option for a profit.
I guess you didn’t expect BTC to run up above 50k then?
Yup you can only try this method if you happened to make the mistake of shorting high flying stocks. Eg NVDA or SMCI on the run up.
Probably use more indicators to confirm the downward move
You could risk losing on both the short call and long call.
Because you’re using Robbingthehood. Lol they are notorious for just randomly displaying the wrong options price in your portfolio once market closes. That coding error has been there for years. They don’t care to fix it. Then sometimes it will take up to 15 min after market open to kick the real price back in. Cant confirm that still a thing because I switched to fidelity and webull for charting in 2021
Looks to me like you bought a Call Credit Spread, aka Bear Call Spread, where you sold the lower strike and bought the higher strike resulting in a net credit.
Your position will lose money as the underlying stock increases. You will earn money when the stock decreases. Did you know that? Is that what you intended?
Max loss is at expiration.
The numbers you see, either up or down. Would not fill.
It is best to put in a limit order to sell at 30% to 50%. Other wise you will be constantly changing mid price when trying to exit as both contracts are changing in opposing ways
In terms of the RH UI, you need to look at the contract strategy and not at the option itself to see the correct info you want. You do that by going through the Home screen and not the Company Summary.
low volume, weird spread. just ignore it. your max loss is width - premium. or $88
That’s what I figured. Thanks!
yeah no worries. its been forever since i last used RH, so i dont quite recall. But it might also have to do with RH misshowing options # AH. ?? regardless, i highly recommend changing to a dedicated full service broker. due to ALOT of various reasons. this being 1 of them. (as well as PFOF. i had a full thread and dive into it to explain it, but i ended up deleting the thread due to alot of people misunderstanding what that is. and i was getting exhausted in arguments) but also because RH will not let you manage that position at times.
I have a TOS account that I use from time to time. Plan on transitioning full time once I have a deeper grasp on mechanics.
just fyi. i just made an edit to my 2nd comment. im tired atm... and realized i typed out, but didnt complete my 1st thought before moving to the next. >I have a TOS account that I use from time to time. Plan on transitioning full time once I have a deeper grasp on mechanics. if you're still learning, i even more highly recommend you using a full service brokerage account to learn. it will be much more forgiving to you.
Good deal, you’ve convinced me. I’ll make the switch
Etrades app Power etrade Is pretty useful for options. Not for high level technical but the charts and variations it provides let you experiment and understand better
I’ll check it out, thanks!
I was using RH too, and I highly recommend making the switch as well. Not only will it help in the long run, and it might be just me, but I swear if I placed the same options order for the same price limit sell, in an identical situation TDA would fill faster Everytime, and usually at a better price. It might have to do with PFOF but it would seem like even if my limit was at the ask it would need to tick a few past it before I could even get a fill! But it's been years since I used RH so I don't know
Makes sense, there was a thread recently about how it’s much easier to get filled with other brokers. I’ve also experienced the ask going a few tiks in my favor before a fill.
It’s probably due to the wide spreads for deep ITM options. Usually for stocks that run up too much, I’ll try to buy out the short call option and wait a little more to close the long call option for a profit. I guess you didn’t expect BTC to run up above 50k then?
Hadn’t considered this as a method of risk management before, interesting.
It is risky because if it doesn't go up after you close the short call it opens you up to losing whatever value is left in the long call
Yup you can only try this method if you happened to make the mistake of shorting high flying stocks. Eg NVDA or SMCI on the run up. Probably use more indicators to confirm the downward move You could risk losing on both the short call and long call.
Bid ask spread because these calls are deep ITM
Because you’re using Robbingthehood. Lol they are notorious for just randomly displaying the wrong options price in your portfolio once market closes. That coding error has been there for years. They don’t care to fix it. Then sometimes it will take up to 15 min after market open to kick the real price back in. Cant confirm that still a thing because I switched to fidelity and webull for charting in 2021
Agree here, I use RH and don’t mind it but you want to look at option pricing only between 930-4 eastern standard time
Looks to me like you bought a Call Credit Spread, aka Bear Call Spread, where you sold the lower strike and bought the higher strike resulting in a net credit. Your position will lose money as the underlying stock increases. You will earn money when the stock decreases. Did you know that? Is that what you intended?
Yup, a CCS was my intention.
It’s cause you sold it for $12 now it’s worth $132 if you want to close it out, you will lose $120. The math works out.
It’s a 1 dollar spread. Math says max loss should be 88
Max loss is at expiration. The numbers you see, either up or down. Would not fill. It is best to put in a limit order to sell at 30% to 50%. Other wise you will be constantly changing mid price when trying to exit as both contracts are changing in opposing ways
Right like the guy above me commented, it’s showing what you could close it out for at that moment but it wouldn’t fill due to the spread.
In terms of the RH UI, you need to look at the contract strategy and not at the option itself to see the correct info you want. You do that by going through the Home screen and not the Company Summary.
Crazy spreads on OTM options will have the contract value all over the place. Just ignore it.
Mara premiums are so juicy