Robinhood options calculation
Did Robinhood change its options calculation ? Put options calculation look different. I’m confused. #stocks #investments If I roll this option will it calculate as profit or loss ?
Bro step away from Robinhood if you don't understand options.
Shouldn’t you say step away from options trading if you don’t understand options?
That too. But above all, if you're on a trading platform where you can lose real money very fast, you should know the basics at a minimum. It's like going to a Casino to play blackjack, they give you a 1 and a 4 and you ask to the person next to you "okay should I hit or fold?"
Break it down to the most simple way of looking at the trade and forget the roll for the moment. Step 1, how much credit did I initially receive for selling the options to open? Step 2. How much will it cost me to buy them back to close? So, if you sold the options to open for more than it cost to buy them back, that’s a profit. If you have to pay more to buy them back than you initially sold them for, that’s a loss. A roll isn’t a way to avoid a loss. You are still taking a loss or realizing a gain from the initially trade. The roll simply allows you to close one trade while simultaneously opening a new one at a specified net credit or debit. In the era when commissions mattered, it was often better to do a trade as a roll to save a ticket charge. You’d often see a commission structure as $10 a trade plus .75 per contract. So, traders could save on commissions by closing one trade and opening a new one on the same order ticket.
So are you saying rolling an option is just like buying another option and I will still close the 1 one with loss ?
Then why do you guys show total profit as a positive number? I’m assuming you are still working for Robinhood.
Elaborate?