Options Trading for American Stocks

The clue is in the name…

There is an existing thread for this:

All ideas are welcome but I would guess this one is going to be a non starter. Freetrade is geared towards introducing the masses to long term investing, I don’t think they’d risk their reputation by bringing in the gambling element that has had Robin Hood all over the news in recent times.

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There’s similarly the same amount of risk as there is in options as there is in investing. In both, you don’t have control over where your money can go, so they are basically both classed as gambling.

A possible fix for this would be to implement a mini test with a countdown clock (so people can’t Google the answers) that changes dynamically for each person to see if they know enough about options that they’ll be able to do it right.

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What I am trying to do is bring attention to this as a potential feature, and seeing as that’s on the second page and not many people really look that far, bringing visibility is the main objective to this.

Yes so comment on the original thread, and vote as well, and that will bump it up to the top plus add another vote for options trading. Freetrade have said numerous times that votes do matter and so creating multiple topics just dilutes the votes.

But wouldn’t it need a substantial number of votes to get bumped up the feed? One vote won’t make any difference to its visibility due to the algorithm that is used on forums like this.

Votes don’t bump the thread up but a single comment does.

What I’m talking about is the vote count. Some threads have red ones, indicating that they are trending right now, and that is what I’m aiming will happen with this to bring visibility to what could revolutionise British stockbrokers.

What do you mean ‘red ones’?

Some vote counts are grey, but others have colour.

It’s alright - I’ll just ask support instead.

I thought they were just all pink unless the thread was closed etc.

Regardless there aren’t any complex algorithms which decide which threads are at the top it is just based on the date of the last comment so adding your vote + a comment to the existing thread does bump it up and gain more attention.

Cant you lose more money than you put in with options through? That’s distinctly more risky than standard investing. Happy to be corrected if I have misunderstood as I have deliberately stayed away from options so far as I don’t know enough about them yet.

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Yeah pretty sure investing in stocks is nowhere near as risky as options :face_with_monocle:
Think someone’s been spending too much time on r/wallstreetbets… :upside_down_face:

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You can’t lose more than you put in when buying options, in that sense they are not riskier than stocks.

When writing options your losses are potentially unlimited, writing options tends to be much more restricted for that reason.

The difference is the price movements, options prices are (generally) way more volatile so relatively small movements in the underlying price can have massive impacts on the option price. For that reason they are generally more risky than shares. Options also lose value over time as they approach the expiration date, so you can lose money even if prices don’t change.

Companies don’t often go bankrupt, but loads of options expire worthless.

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Cheers @Cameron I obviously have lots of reading to do on the subject

No, there are four trades: buy/selling calls/puts (selling usually called ‘writing’, I suppose to avoid confusion with a put which is sort of like ‘selling’ usually means (in terms of the underlying stock) in that it’s a bearish position).

You only ‘put in’ money when you buy an option (if you sell the option, i.e. ‘write’ it, you’re the other side of that trade, and you ‘take out’ that money, the premium).

An option is the option to buy/sell (in the case of a call/put respectively) the underlying stock. But it’s not an obligation; so your maximum loss occurs when you don’t execute (a choice you make because executing would not make you money) and you lose the premium you paid.

Executing a call has an (potentially unlimited) upside of the difference between the strike price of the option (the price at which it executes) and the current (higher, or you wouldn’t be executing) price of the underlying. Executing a put has an (bounded by the strike price) upside of the difference between the current price of the underlying and the (higher, or you wouldn’t be executing) strike.

Writing options has equal and opposite (in the rawest sense, ignoring spread and market fees etc.) up & downside, so losses are unbounded only if you write calls. But you’re losing money you didn’t even ‘put in’ then (you got paid the premium), so hopefully you knew you were up to something!

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Thanks @OJFord appreciate the explanation

Is there such a thing as non margin options?

I think where they get a bad wrap is that we commonly see people losing $50,000 on contracts or going into minus balances?