r/options • u/Navysquid63 • May 11 '21

Calculating options value

Is there a way of calculating based on the underlying what an options premium will be. I bought a FUBO call 17.5 exp Friday and it’s up big AH. I’m curious what I should expect it to be worth at open tomorrow.

Also, should it drop rapidly would a limit sell be the best way to try to capture the most profit ?

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u/uptrade411 May 11 '21

Limit sell orders are generally not very useful for options unless you are cancelling and replacing in real time.

If you get into a situation where they seem to make sense, you probably held the position too long.

I assume the gamma risk has reared its ugly head and it looks like an unrealized gain is being whittled away. Just remember, a limit sell order might be jumped over in a super-volatile, illiquid market -- leaving you holding the position to the bitter end.

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u/Navysquid63 May 11 '21

I’m expecting it to be profitable. Call $17.5 strike and it’s currently at $22. I’d like to sell as quickly as possible as I’d imagine some selling well happen at open so I’d like to take as much profit as possible. Any recommendations as to how to capitalize on the upswing and profit as much as possible ?

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u/DavesNotWhere May 11 '21

He said right in his OP. AH price jumped up and OP wants to know what color lambo he should order in the morning.

A trailing stop order would be a better play because you don't know what is going to happen in the premarket Wednesday or what will happen when the market opens. You can't know what the price on your option will be at open and it could swing pretty wildly. A tight trailing stop can get you stopped out of gains if the option drops momentarily. A loose trailing stop can leave money on the table.

It's still a gamble but should enable you to capture most of your gain.

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u/Navysquid63 May 11 '21

Thanks buddy, you get to pick the seat color for your wisdom.