What's next for a Long Call？
Notes:
A. If you believe that the movement of the underlying stock is unfavorable to you, you can close the option position at any time before expiration to potentially take profit or stop loss. This can help avoid the loss of the option's time value. Otherwise, it may expire worthless.
B. In some cases, investors may choose to exercise the option early. However, doing so will result in the loss of the option's time value, so careful consideration is needed before deciding to exercise early.
C. Be sure to monitor the status of your account to help avoid losses due to insufficient purchasing power. Click Account > Risk Control Status to check your account status.
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How to set up a Long Call on moomoo？
After buying a call option, what are the trading options available? | |
Option 1: Close your position | Close position to take profits or limit losses Your Profit or Loss = (Closing Premium - Purchase Opening Premium) * Contract Multiplier * Number of Contracts |
Option 2: Exercise your option (Assuming the option is ITM) | Exercise the right to buy underlying stock at the strike price on client portal Your profit or loss (unrealized) = (Current Stock Price - Strike Price - Premium Paid) * Contract Multiplier * Number of Contracts This profit would be on paper because you would be taking on the shares of the associated underlying stock. To realize the profit, you would have to then sell the shares of the stock. |
Option 3: Rollover | Close the current option position (realizing any gains or losses) and open a new option position on client portal May be done in an effort to help manage risk or increase potential profit through closing an existing position, thereby realizing any gains or losses, and opening a new position. |
Option 4: Take no action. But what will happen when the option expires? | 1.If the option is out-of-the-money The option's value becomes zero, and you lose the entire premium. 2.If the option is in-the-money Automatic exercise conditions: U.S. stock options: On the expiration date, the options are in-the-money by as little as $0.01 at expiration at market close. Exercise will be completed through physical delivery: The system will automatically execute the exercise only when the account has sufficient purchasing power. If you don't have sufficient margin, you should consider closing the position yourself or adding sufficient margin; otherwise, the system will forcefully close the position. |
This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. Read more
