Options Questions Safe Haven periodic megathread | August 11 2026

We *call* this the weekly Safe Haven thread, but it might stay up for more than a week. For the options questions you wanted to ask, but were afraid to. **There are no stupid questions.**   **Fire away.** This project succeeds via thoughtful sharing of knowledge. **You, too, are invited to respond to these questions.** This is a weekly rotation with past threads linked below. ---- ###**BEFORE POSTING, PLEASE REVIEW THE BELOW LIST OF FREQUENT ANSWERS.** . .. --- **As a general rule: "NEVER" EXERCISE YOUR LONG CALL!** A common beginner's mistake stems from the belief that exercising is the only way to realize a gain on a long call. It is not. Sell to close is the best way to realize a gain, almost always. **Exercising throws away extrinsic value that selling retrieves.** **Simply sell your (long) options, to close the position, to harvest value, for a gain or loss.** **Your break-even is the cost of your option when you are selling.** **If exercising (a call), your breakeven is the strike price plus the debit cost to enter the position.** Further reading: **Monday School: Exercise and Expiration are not what you think they are.** **As another general rule, don't hold option trades through expiration.** Expiration introduces complex risks that can catch you by surprise. Here is just one horror story of an expiration surprise that could have been avoided if the trade had been closed before expiration. --- **Key informational links** • Options FAQ / Wiki: Frequent Answers to Questions • Options Toolbox Links / Wiki • Options Glossary • List of Recommended Options Books • Introduction to Options (The Options Playbook) • The complete r/options side-bar informational links (made visible for mobile app users.) • [Characteristics and Risks of Standardized Options (Options Clearing Corporation)]( https://www.theocc.com/about/publications…) • Binary options and Fraud (Securities Exchange Commission) . ---- **Getting started in options** • Calls and puts, long and short, an introduction (Redtexture) • Options Trading Introduction for Beginners (Investing Fuse) • Options Basics (begals) • Exercise & Assignment - A Guide (ScottishTrader) • Why Options Are Rarely Exercised - Chris Butler - Project Option (18 minutes) • LEAPS calls explained - Chris Butler - Project Option (13 minute video) • I just made (or lost) $___. Should I close the trade? (Redtexture) • Disclose option position details, for a useful response • OptionAlpha Trading and Options Handbook • Options Trading Concepts -- Mike & His White Board (TastyTrade)(about 120 10-minute episodes) • Am I a Pattern Day Trader? Know the Day-Trading Margin Requirements (FINRA) • How To Avoid Becoming a Pattern Day Trader (Founders Guide) --- **Introductory Trading Commentary**    • **Monday School Introductory trade planning advice (PapaCharlie9)**   **Strike Price**    • Options Basics: How to Pick the Right Strike Price (Elvis Picardo - Investopedia)    • High Probability Options Trading Defined (Kirk DuPlessis, Option Alpha)   **Breakeven**    • Your break-even (at expiration) isn't as important as you think it is (PapaCharlie9)   **Expiration**    • Options Expiration & Assignment (Option Alpha)    • Expiration times and dates (Investopedia)   **Greeks**    • Options Pricing & The Greeks (Option Alpha) (30 minutes)    • Options Greeks (captut)   **Trading and Strategy**    • Fishing for a price: price discovery and orders    • Common mistakes and useful advice for new options traders (wiki)    • Common Intra-Day Stock Market Patterns - (Cory Mitchell - The Balance)    • The three best options strategies for earnings reports (Option Alpha) --- **Managing Trades** • Managing long calls - a summary (Redtexture) • The diagonal call calendar spread, misnamed as the "poor man's covered call" (Redtexture) • Selected Option Positions and Trade Management (Wiki) **Why did my options lose value when the stock price moved favorably?** • Options extrinsic and intrinsic value, an introduction (Redtexture) **Trade planning, risk reduction, trade size, probability and luck** • Exit-first trade planning, and a risk-reduction checklist (Redtexture) • Monday School: A trade plan is more important than you think it is (PapaCharlie9) • Applying Expected Value Concepts to Option Investing (Option Alpha) • Risk Management, or How to Not Lose Your House (boii0708) (March 6 2021) • Trade Checklists and Guides (Option Alpha) • Planning for trades to fail. (John Carter) (at 90 seconds) • Poker Wisdom for Option Traders: The Evils of Results-Oriented Thinking (PapaCharlie9) **Minimizing Bid-Ask Spreads (high-volume options are best)** • Price discovery for wide bid-ask spreads (Redtexture) • List of option activity by underlying (Market Chameleon) **Closing out a trade** • Most options positions are closed before expiration (Options Playbook) • Risk to reward ratios change: a reason for early exit (Redtexture) • [Guide: When to Exit Various Positions]( https://www.reddit.com/r/options/wiki/faq…) • Close positions before expiration: TSLA decline after market close (PapaCharlie9) (September 11, 2020) • [5 Tips For Exiting Trades (OptionStalker)]( https://www.reddit.com/r/options/comments…) • Why stop loss option orders are a bad idea --- **Options exchange operations and processes** • [Options Adjustments for Mergers, Stock Splits and Special dividends; Options Expiration creation; Strike Price creation; Trading Halts and Market Closings; Options Listing requirements; Collateral Rules; List of Options Exchanges; Market Makers](https://www.reddit.com/r/options/wiki/faq…) • Options that trade until 4:15 PM (US Eastern) / 3:15 PM (US Central) -- (Tastyworks) --- **Brokers** • USA Options Brokers (wiki) • An incomplete list of international brokers trading USA (and European) options --- **Miscellaneous: Volatility, Options Option Chains & Data, Economic Calendars, Futures Options** • Graph of the VIX: S&P 500 volatility index (StockCharts) • Graph of VIX Term Structure (CBOE) • A selected list of option chain & option data websites • Options on Futures (CME Group) • Selected calendars of economic reports and events --- Previous weeks' Option Questions Safe Haven threads. Complete archive: 2018, 2019, 2020, 2021, 2022, 2023, 2024, 2025, 2026 ---

4 comments held Reddit says 0 on reddit ↗

u/I_HopeThat_WasFart 1 1 day ago

love it would also like to see something around share anchor wide bid/asks are a pain and legging in our out of a position is expensive 9/10 times via multi-book order holding shares while you wait for a price to come to you then selling those small spread shares saves quite a bit
u/klipsetrades 1 1 day ago

This is insanely helpful and an awesome resource. Huge respect for putting all of this together — basically an options starter library in one post. I think a lot of people that are new to options could save themselves a lot of pain by working through these links first
u/drewbagel423 1 18 hours ago

I always hear the expression, "sell options when they are expensive, buy when they are cheap." But how does one actually make that determination? Is it just looking at VIX? Comparing IV to HV? What about skew across strikes and expirations? And what is a good way to scan for stocks with high volatility?
u/GammaWinsSam 1 12 hours ago

There are some aggregate measures of an underlying's volatility, the most commons is just "ATM IV", which takes the 30D ATM contract's volatility. You can look at that to get a general sense of where volatility is, but an individual contract can have a very different IV. OTM puts generally have higher IV because the jump risk makes it harder to hedge them, and hence dealers command a higher premium. OTM calls on the other hand generally have a lower IV. Individual stocks have high IV in expiries on and after their earnings report, especially if it's happening soon. Contracts before the earnings report generally have much lower IV. On ETFs and large indices, it's usually macro announcements and major political events that have such an impact, but the impact is generally smaller than earnings announcement. But none of the above is actually an edge, they are just different risks priced differently. You can't sell options on the earnings day and buy options on the days before. You can, but you are not hedging the risk. VIX is just a measure of 30D volatility on SPX options. It's not even capable of saying whether shorter or longer dated options on VIX are relatively cheap or expensive, let alone other underlyings. They are of course correlated though. One way to know if an individual contract is trading at a relatively low/high IV is to look at that specific contract's rank and percentile. There's probably other tools you can use, but I will mention the one I built myself: https://www.gammawins.com/calc When you select a contract, you can click on "skew" or "term" to see the IV for the contracts of the same expiry or moneyness. It also shows the IV range of contracts with similar dte and moneyness in the past year. IMO this is the best way to know if a specific contract is priced relatively low or high. But remember that all the factors I mentioned in the beginning impact the current volatility range. Once you look at each one of the charts for 1 minute, it hides behind a paywall. You can either start a 7 day trial to continue looking at the charts, or simply start incognito mode in Chrome or private browsing in Firefox to reset the 1 minute deadline.