May I ask if CEI continues to maintain $1 on Friday, will MO...
$CEI 220325 1.00C(CEI220325C1000.US$ May I ask if CEI continues to maintain $1 on Friday, will MOO MOO automatically exercise rights? So you can buy CEI's stock at a low price, right?
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Dadacai : If you ITM, moomoo will exercise its power automatically. Https://www.futusg.com/support/topic174/h5?lang=en-us
San 8723OP Dadacai: Thanks for reply and sharing. If let say Friday closing it’s above $1, and it automatically exercise, then how much it will charge if I bought it on $0.08 with 50units. A bit confused as I am watching YouTube to learn about it. Haha
Dadacai : Do you mean 50 contracts because each contract is for 100 shares?
San 8723OP : Yaya. Correct.:)
San 8723OP Dadacai: Ah….understood now. Thanks for your explanation. Really appreciate it. Thanks thanks! :)
San 8723OP Dadacai: If like this, actually buying original shares will be more cost wisely right? But why ppl will suggest to buy option call. And said option is better earning than stock shares. I think I need to study more.:) thanks ya!
Dadacai : Editing my comment to make it clearer. $0.08 x 50 x 100 is the premium paid for the call (excluding commission and regulatory fees). That is payable regardless of whether the call is ITM or OTM. If the call is exercised, you have to have cash of 50 x 100 x $1 to pay for the 5000 shares. Your total cost for the shares will be the premium you have paid (plus commission and regulatory fees) and the cost of buying the shares. If it is OTM, you don’t exercise the right to buy the shares and your cost is the premium (plus commission and regulatory fees) you have paid.
Dadacai San 8723OP: An investor buys a call if he expects the share price to increase above the strike price (he gets to pay a discounted price for the share). The breakeven price must take into account the premium paid for the call. Options trading allows one to use a smaller capital (the premium) to make a bet to profit from the anticipated price increase of the underlying stock e.g. $3000 can buy just 1 Amazon share but it can pay for the premium of 1 call contract (100 Amazon shares).
Dadacai : The maximum loss when buying a call is the premium paid. If you hold the shares and your prediction turns out to be wrong, you may lose a lot more in terms of capital. Call holders who do not enough capital to buy the shares at expiration will have to make sure they can close the call position (sell the call) before expiration date.
San 8723OP Dadacai: If didn’t sell the contract and the call price is under the strike price, will just lose the money with the premium right? As it won’t be exercised as not reach the strike price
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