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microcapbiotech

12/21/24 3:29 AM

#35064 RE: microcapbiotech #35063

This may get deleted but I'll give it a shot as I don't want anyone to lose their money. People (like me) sometimes use volume and open interest to help determine their option plan, volume is simply a look at "that" days activity, but open interest is apparently a bit more complicated than I thought. A call option can show zero open interest even if you hold it because open interest represents the total number of outstanding contracts in the market, not just your individual position, if no other trader holds the same call option contract, then the open interest for that specific contract will be zero, even if you are the only one holding it. To be honest, I really don't understand that. I had to ask my broker this when I couldn't see my calls in open interest for some LEAPS. I always thought that options were just like stocks, you can't buy it if no one sells it and vice versa. It may be a "market maker" thing as a market maker can sell a call option to a call buyer even if there is no other trader actively selling that specific call option as their job is to provide liquidity. Again, do your own Due Diligence and ask your broker if you don't understand something, or just paper trade options first to see how it works for you. Please understand this, if playing options for earnings, if you are right you can make a little, or you can make A LOT, BUT if you are wrong, there is no lose a little, you WILL lose A LOT, like 90% to 99% of your money because of what is called volatility crush.