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Sell to close means selling an option previously bought to open the transaction. This closes the position. ... Selling to open an options contract with a premium of $1 earns the trader $100 cash.
An alternate name is "alligator spread," derived from the large number of trades required to open and close them "eating" one's profit via commission fees. Box spreads are usually only opened with European options, whose exercise is not allowed until the option's expiration. Most other styles of options, such as American, are less suitable ...
Margin loan interest and options fees account for 39.5% of Robinhood's total revenue through nine months of 2024. These types of speculative activities dry up during market downturns.
An option contract is a type of contract that protects an offeree from an offeror's ability to revoke their offer to engage in a contract. Under the common law, consideration for the option contract is required as it is still a form of contract, cf. Restatement (Second) of Contracts § 87(1).
Through the first three quarters of 2024, Robinhood's transaction-based revenue, driven primarily by options trading, reached $975 million, equating to a year-over-year growth of 35%.
A round trip is the opening and closing of a security position. Whether you buy or sell to open, when you close the position, you’ve completed a round trip. Day trading refers to buying and then selling or selling short and then buying back the same security on the same day. [7]
Options trades generally take place while the markets are open, with only a few exceptions extending after hours. However, those trades only allow you to trade until 4:15 p.m. in most cases.
The option style, as specified in the contract, determines when, how, and under what circumstances, the option holder may exercise it. It is at the discretion of the owner whether (and in some circumstances when) to exercise it. European – European-style option contracts may only be exercised at the option's expiration date. Thus they can ...