Assertion: straddle's option | /r/CapableOf | expire worthless
Facets:
value: at this price
type: OTHER
value: in that case
type: OTHER
value: on expiration in july
type: TEMPORAL
value: in this example
type: OTHER
Source sentences:
text: This will go on until the market either definitively chooses a direction or the options expire worthless.
text: At this price, both options expire worthless and the options trader loses the entire initial debit taken to enter the trade.
text: The ideal scenario for the writer is for the options to expire worthless.
text: As you approach expiration, an option will either expire in-the-money or expire worthless.
text: If the anticipated event will not generate a strong move in either direction for the underlying security, then options purchased likely will expire worthless, creating a loss for the trader.
text: If at expiration the stock's price is exactly at-the-money, both options will expire worthless, and the entire premium paid to put on the position will be lost.
text: At either of those levels, one option's intrinsic value will equal the premium paid for both options while the other option will be expiring worthless.
text: At this price, both options expire worthless and the options trader gets to keep the entire initial credit taken as profit.
text: The maximum profit is earned if the short straddle is held to expiration, the stock price closes exactly at the strike price and both options expire worthless.
text: In this example, if ABC expires at $30, then both the call and put option would expire worthless.
text: Potential loss is limited to the total cost of the straddle plus commissions, and a loss of this amount is realized if the position is held to expiration and both options expire worthless.
text: Both options will expire worthless if the stock price is exactly equal to the strike price at expiration.
text: In that case, both short options expire worthless, and the investor pockets the premium received for selling the options.
text: At either of those levels, one option's intrinsic value will equal the premium received for selling both options, while the other option will be expiring worthless.
text: Finally, if the market does not gain in volatility or move in one convincing direction, then both the call and put options contracts will decline in value each day until eventually the options expire worthless and all premiums paid become a total loss.
text: At this price, both the written options expire worthless while the longer term straddle being held will suffer only a small loss due to time decay.
text: On near-term option expiration in July, if the stock is still trading at $40, both the written options will expire worthless while the long call and the long put will still be worth $175 each due to a much slower time decay.
text: The aim is to see that both the options expire worthless.
text: expiration Short Straddle Profit/Loss at expiration 800 -130(loss of intrinsic value of 200 minus premium retained of 70) 80 (premium on PE as the option expires worthless)
text: You want the stock exactly at strike A at expiration, so the options expire worthless.
text: Potential loss is limited to the total cost of the strangle plus commissions, and a loss of this amount is realized if the position is held to expiration and both options expire worthless.
text: Both options will expire worthless if the stock price is equal to or between the strike prices at expiration.
text: If Company X stock is still trading at $50 by the time of expiration, then the options in both legs will expire worthless and you will lose your initial investment of $600.
text: At this price, both options expire worthless, while the short stock position achieved breakeven.
text: If at expiration the stock’s price is exactly at-the-money, both options will expire worthless, and the entire premium paid to put on the position will be lost.
text: In that case, both short options expire worthless, and the investor pockets the premium received for selling the options.
text: Even though Bill will let that option expire worthless, he will still have to count the cost of his option premium when calculating the profit.
text: At this price, both written options expire worthless and the options trader gets to keep the entire net premium received taken as profit.
text: You will also notice both options expired worthless and the full credit was kept in the last strangle in the example (215 C / 190 P).
text: In that case, both short options expire worthless, and the investor pockets the premium received for selling the options.
text: At either of those levels, one option’s intrinsic value will equal the premium received for selling both options, while the other option will be expiring worthless.
text: If Company X stock is still trading at $50 by the time of expiration, then the options in both legs will expire worthless.
text: At this price, both options expire worthless, while the long stock position achieved breakeven.
text: On expiration in July, if XYZ stock is still trading at $40, both the JUL 40 put options expire worthless while the long stock position broke even.
text: The maximum profit of the credit received on selling the 2 options is earned when both options expire worthless.
text: If Company X stock is still trading at $50 by the time of expiration, then the options in both legs will expire worthless and you will lose the $600 you have invested.
text: In such case both the options expire worthless, there are no additional losses from option assignments, and the trade’s total profit equals the initial cash flow, or $573 in our example.
text: If the stock price is at or between the strike prices of the short strangle, then the both short options expire worthless and the long straddle remains open.
text: Both options could expire worthless if the stock finishes at $40.
text: but to let both options expire worthless (or hopefully sell them if they have any time value left in them before expiration).
text: Therefore, at expiration when no time value is left, one of the options can almost always (unless underlying price end up exactly at the strike) be exercised for some gain (which may or may not be enough to cover the initial cost) and the other option expires worthless.
text: With a strangle, there's a gap between the two options where both of them are out-of-the-money and it's possible for both options to expire worthless.
text: Time decay is working for the investor as they’re looking for both options to expire worthless, as time goes on this position decays away, and the position rapidly profits as long as the stock does not have any sharp moves.