Boiler Room: The Official Stock Market Discussion

Rickdogg44

Rickdogg44

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manyfaces said:
So they're pretty much like a place holder in the event the stock runs you still can exercise the warrants and get them at the cheaper price, or sell them at the cheaper price? What's the difference between that and options trading then?
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I assume you meant sell warrants higher...

Options have Serious time decay compared to warrants, warrants really don't unless a spac doesn't go through in 2 years

Options are leverage for 100 shares, warrants one to one

Edit: your brokerage may charge to exercise the warrants. That's why most just trade them, unless you love the target
 
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dora_da_destroyer

dora_da_destroyer

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any of yall options dudes ever exercise your strike? i assume 90% of people aren't and are just in the game of selling/buying the option itself

and an option that loses value - you can just keep rolling it forward hoping it increases or are there rules around that?
 
Panther

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dora_da_destroyer said:
any of yall options dudes ever exercise your strike? i assume 90% of people aren't and are just in the game of selling/buying the option itself

and an option that loses value - you can just keep rolling it forward hoping it increases or are there rules around that?
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yeah most people just trade the contracts, I would assume some of the institutions actually exercise to lock in better prices

you can roll something that is down if you think it has a better future.
 
Spree At Last

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dora_da_destroyer said:
any of yall options dudes ever exercise your strike? i assume 90% of people aren't and are just in the game of selling/buying the option itself

and an option that loses value - you can just keep rolling it forward hoping it increases or are there rules around that?
Click to expand...

I always sell prior to expiration to lock in profit. If I wanted to, I could always buy the shares later. My options plays are basically reserved for flipping premium.
 
Spree At Last

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dora_da_destroyer said:
who is buying these contracts near expiration? institutions that actually want the shares for less? i assume it aint mainly retail
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I could be wrong, but I think most of the time when you sell your option to close, the person or market maker buying it has already sold the same option to open and is now looking to close their position. In those cases, no shares are actually transferred.

Also another thing is that there are no tax advantages to exercising options, you still gotta pay cap gains tax on the difference of the share price.
 
dora_da_destroyer

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Spree At Last said:
I could be wrong, but I think most of the time when you sell your option to close, the person or market maker buying it has already sold the same option to open and is now looking to close their position. In those cases, no shares are actually transferred.

Also another thing is that there are no tax advantages to exercising options, you still gotta pay cap gains tax on the difference of the share price.
Click to expand...
do you pay cap gains on the premium as well? or are the cap gains on the difference in share price captured in the premium?

edit: repped you and @Panther for entertaining my stupid questions :o:
 
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