Assertion: straddle's option | /r/HasProperty | sold
Facets:
value: prior to expiration
type: TEMPORAL
Source sentences:
text: Therefore, if the stock price is “close” to one of the strike prices of a strangle as expiration approaches, and if the owner of a strangle wants to avoid having a stock position, the long option in danger of be exercised automatically must be sold prior to expiration.
text: Because the options are sold rather than bought, the position is initially as profitable as it can be.
text: For the short strangle, the maximum profit will be less because out-of-the-money options are sold, yielding less of a premium to the seller.
text: If the call is deep enough ITM to be considered an offsetting position to the long stock, thus triggering the straddle rules, and the stock had not been held for more than a year before the option was sold, the holding period of the stock position goes to zero, and only restarts after the stock is no longer subject to a straddle.
text: been held for more than a year before the option was sold, the holding period of the stock position goes to zero, and only restarts after the stock is no longer subject to a straddle.
text: If the call is deep enough ITM to be considered an offsetting position to the long stock, thus triggering the straddle rules, and the stock had been held for more than a year before the option was sold, the holding period of the stock position is merely suspended while the option position exists, and resumes after the stock is no longer subject to a straddle.
text: been held for more than a year before the option was sold, the holding period of the stock position is merely suspended while the option position exists, and resumes after the stock is no longer subject to a straddle.
text: If the stock had already been held for more than one year when the option was sold, suspending the holding period won't affect the long-term status of the stock.
text: If the call is not a qualified covered call because of when the option was sold, but is not deep enough ITM to be considered an offsetting position triggering the straddle rules, the holding period is suspended for the period of time that the option position is open.
text: If the stock was held less than one year when the option was sold, but not much less, and then was later sold, the holding period suspension could cause the gain or loss on the stock sale to be short-term, even though it was physically held longer than one year.
text: The current stock price to use is the stock's closing price on the trading day prior to the day the option was sold, unless the stock opens the next day more than 10% above the previous day's close -- in that case the current stock price to use is 110% of the previous day's close.
text: For example, similar volumes in put and call options in the same price and expiration dates may signal a straddle bet on volatility, while call options being sold could indicate long-term investors hedging their positions by selling calls – a bearish indicator.