Why Can Open Interest in Options Be Negative? | #OptionsHandbook EP005

Option_Lab
07-31

In options trading, you’re not just limited to buying—you can be the seller too! Take Sell Call as an example: once you sell a call, your position shows “-1”.

Many beginners stumble when it comes to the seller’s role. That’s why the Options Handbook breaks it down clearly—

▶ Welcome to the Writer's Seat!

You can sell an option in the options market even if you do not own one. Like short-selling stocks, you do not need to hold the asset to trade it.

In fact, selling an option is simpler than shorting a stock; you do not need to borrow anything. Instead, you "write" the option, which is why selling options is often called writing options.

▶ How It Works?

  • You post a sell order for an option on the platform.

  • The moment a buyer takes it, the contract is created.

  • You receive the premium upfront.

  • You're now the seller, with all the obligations that come with the contract.

▶ Risks of Being a Seller

Your position will be negative because you've committed to deliver something if the buyer exercises this option.In return for the premium you receive, you're taking on the risk of the buyer's future decision.

Explore seller strategies across all kinds of market conditions—only in the Options Handbook! Available at Tiger Coin Center!

>> Redeem Options Handbook Now <<

>> Click here for the Simplified Chinese version <<

Market Amplifies Earnings Moves, Can a Strangle Make You Money?
This week marks the most volatile earnings week of the season. The market is punishing bad earnings and rewarding good ones—yesterday, some strong performers surged over 20%, while certain earnings misses dropped more than 20%. Is this the perfect time to use a strangle strategy—betting on volatility instead of direction? What’s your go-to options strategy during earnings season? Do you focus on steady returns or look to capitalize on IV crush? And which stocks do you think are best suited for options trading?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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