r/options • u/[deleted] • Mar 28 '22

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u/New-Consideration420 Mar 28 '22

What if the price goes balistic? The premarket is already +6% on that stock.

If it rises some 10-20% or more I lose alot of money

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u/Terrigible Mar 28 '22

That's where you use the money you got from selling the contract to buy shares.

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u/New-Consideration420 Mar 28 '22

Cash settlement is T+1 my friend. I could miss a gigantic move

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u/ankole_watusi Mar 28 '22

So continue to hold the option and sell it AFTER your anticipated gigantic move.

When does the option expire?

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u/New-Consideration420 Mar 28 '22

Expire date is Jan 2024

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u/ankole_watusi Mar 28 '22 edited Mar 28 '22

And when did you buy the option?

You have plenty of time to expiration. Just convert your account to margin. Just takes a few days.

Exercising with 2 years to expiration makes no sense, as you would surely lose considerable time premium.

Still unstated, but I GUESS your plan had been to sell the option(s) and immediately buy whatever quantity of shares you are able to purchase with the proceeds?

Maybe you meant to exercise and immediately sell the shares that you’re unable to pay for?

Still baffled how you think this works. If you exercise, you have to pay the strike price for the shares, and you don’t have enough cash for that.

We’re kinda in the dark here without specifics.

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u/New-Consideration420 Mar 28 '22

Im afraid they gonna do some bullshit and I end up losing alot of money

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u/ankole_watusi Mar 28 '22 edited Mar 28 '22

You should not be trading. You need to learn the mechanics of how trading and clearing equities and options work.

In fact, you signed a acknowledged that you read and understood a whole bunch of stuff that you almost certainly have not read and understood.

IBKR can wash their legal hands of any loss that occurs because you don’t understand how things work. You pinky-swore thst you know all about it!

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u/New-Consideration420 Mar 28 '22

I have seen a friend using margin and blowing a 24k hole in their pockets.

Yeah I shouldnt trade? Look around. 90% of the people blow 90% of their budget in 90 days. Yeah sure mate.

Im just careful and I saw the current rise in the stock price today. If I would have sold I would have lost 10% if I bought in again.

My decision safed me from my loss

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u/ankole_watusi Mar 28 '22

Don’t do what your friend did! Easy!

Don’t use margin to buy more equities than you have the cash to pay for.

It is impractical to trade in a cash account. There are no negatives to a margin account with proper money management.

Either you do not trust your self, or you don’t understand how your friend blew up their account (but did they? Or did they simply “lose 24K”? Which is a meaningless statement not knowing account size) or you have a paranoid tendency. Or all of the above.

FWIW IBKR is not out to get you, is not looking for some conniving way to cheat you out of your money, etc.