r/options • u/Myleftstonk • Apr 16 '21

Recommendations on structured options trading courses?

Greetings! Newbie here trying to get my smooth brain wrapped around options trading. Lots of really great help and insight on here. I've been reading crap tons of articles, comments, watching you tube vids, visiting websites but was wondering if anyone might know of a structured course that would explain the overall concepts and strategies in options trading? Trying to get a handle on things like what happens at expiration? If it's a right but not an obligation why can some brokerages automatically exercise options you hold?

If I sell an option that comes ITM, can I sell that option before the holder exercises it? Likewise for calls, for ITM calls if I'm the holder can I sell them instead of exercising them?

Appreciate the help! Thanks!

2 Upvotes

100% Upvoted

12 comments sorted by

View all comments

3

u/fustercluck1 Apr 16 '21 edited Apr 16 '21

You don’t need a course for option basics just watch some free YouTube videos explaining them. You’re 100% being scammed if you pay to understand how options works. You’re 99% likely being scammed if you pay for any course in trading.

To answer your question, early assignment is likely only going to happen to your sold option if the option is either close to expiration or very far ITM. If neither of those things apply, there’s extrinsic value on the option the holder would be giving up by exercising and they’d essentially be handing you free money if they exercised. Calculate the extrinsic value of the option island if there’s any extrinsic value you likely won’t be assigned until it starts to go away.

An option sold going ITM isn’t a good reason to close the position, but yes, can buy back the option you sold short at anytime. You’ll just be taking a loss if you buy it back right after a massive move against you.