Why are stockbrokers pushing options
- Thread starter happ
- Start date
Options are indicators of markets ahead. One way or the other (up or down).
They push them to solidify/confirm/justify their positions either long or short.
Every broker will preach a put or call depending on what his "chest is holding".
Also they know you cannot hold options forever like stocks. You have to close
at one point in time. So they time markets and generate revolving revenue.
Warren Buffett hates options and that speaks volume....
They push them to solidify/confirm/justify their positions either long or short.
Every broker will preach a put or call depending on what his "chest is holding".
Also they know you cannot hold options forever like stocks. You have to close
at one point in time. So they time markets and generate revolving revenue.
Warren Buffett hates options and that speaks volume....
So perhaps now they're recommending stocks and corresponding options for whatever they're holding in the firms portfolio to make it easier or add flexibility for they and their corporate clients to get out...Option
Every broker will preach a put or call depending on what his "chest is holding".
I know industry terminology might be better understood by insiders but as mentioned before, stockbrokers and investment bankers are different roles in the industry.Why are stockbrokers pushing options puts calls selling to collect premiums more in the last few years. I get it but whats in it for them when commissions are minuscule? Is it part of a larger plot by investment bankers.
As for pushing options, not all brokers do. Only those that are licensed can and that is a shockingly low percentage (based on my observation) and among those that can, even less make it a core strategy as opposed to a supplementary one.
My guess, you've run into the exception to the rule and widened a limited experience into an inaccurate stereotype.
I can smell the paranoia and fear from here...stick with index funds!!!So perhaps now they're recommending stocks and corresponding options for whatever they're holding in the firms portfolio to make it easier or add flexibility for they and their corporate clients to get out...
Covered call strategies are great for making additional income with no upfront investment (except commission). This means as an investor you can make money without selling existing shares or buying new ones.
The broker can make his commission and everybody is happy. Unless the price of the underlying goes up.
The broker can make his commission and everybody is happy. Unless the price of the underlying goes up.
I have a 50% chance of losing with covered calls? What happens if the underlying goes up? Any downside? Brokers make it sound like an easy score.Covered call strategies are great for making additional income with no upfront investment (except commission). This means as an investor you can make money without selling existing shares or buying new ones.
The broker can make his commission and everybody is happy. Unless the price of the underlying goes up.
I would say your probability of losing is less than 50%. Writing covered calls means for a position you are already holding you are selling the right to buy your stock at the strike price, which at the time of the contract is above or equal to the market price. If the stock price stays the same or drops, you got the proceeds from selling the option less commission - end of story. If the stock price goes above the option strike price the option holder will exercise their right and you will be obliged to sell the stock for less than the market price BUT you could still be selling for more than your book cost in which case you would realize a gain, but make an 'opportunity loss' by selling below the market. This strategy is good if you are already holding large positions of stocks, the market is bearish or stagnant and/or you were going to sell the positions anyway.
The way to play covered calls is with a stock that has a high IV rank. If the market goes up, you sell an ATM call in an anticipation that the market will fall. When that happens you just buyback the call. Once you do that, your risk is eliminated and you can cell your stock if the market goes up.
Not true. He hates derivatives. Options he understands...Warren Buffett hates options and that speaks volume....
Timbit
all i m going to add to this is i've made more money off options then stocks could ever make and you need less capital to do options but its not for everyone
Online brokerages biggest revenue generator is option trading. The commissions are not "minuscule" at all. Options traders tend to trade many contracts at a time. Even at a discount brokerage, that's going to run up a bill.Why are stockbrokers pushing options puts calls selling to collect premiums more in the last few years. I get it but whats in it for them when commissions are minuscule? Is it part of a larger plot by investment bankers.
You can't "lose" when you sell a covered call; One can only cap his holding's upside by doing so.I have a 50% chance of losing with covered calls? What happens if the underlying goes up? Any downside? Brokers make it sound like an easy score.
Options traders make tremendous commissions from options . Very few brokers have options licenses and firms do not not even want brokers trading options .
I traded institutional options and futures for 20 years .
Great fun , crazy risk but selling calls and puts with different strategies is the pro side of the market . It is literally collecting premium for time .
Great to do if you have millions , not so great if you are tryna turn 5000 into a million
I traded institutional options and futures for 20 years .
Great fun , crazy risk but selling calls and puts with different strategies is the pro side of the market . It is literally collecting premium for time .
Great to do if you have millions , not so great if you are tryna turn 5000 into a million
