Trading · 66 / 86
Options
A call is the right to buy at a strike. A put is the right to sell at a strike. Both expire. This is what they are. It is not a book of trades.
What you pay
The buyer pays a premium upfront. That premium can go to zero at expiry. The seller collects the premium and can face a much larger loss.
Expiry
After the date, the right is gone. A screen that shows a large gain before expiry is not cash until you can close or exercise, and closing has its own spread.
TXKN will not tell you which option to buy. If you cannot explain the premium and the date in a sentence, do not touch it.
Check yourself
Does an option that is up on the screen mean you have that cash?
Not until you close or exercise, and the spread still applies.
After this you can state the premium, the strike, and the expiry in one sentence, or leave it alone.
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