How to Buy and Close a Put Option on Webull App

How to buy and close a put option on Webull app. Today, I’m going to show you a live example of how to buy a put option, and then closing or selling the put option on Webull, so you don’t have to let the option expire. Because if you do let it expire, some brokerages will make you buy the stocks and then sell it, which could get a bit messy. Especially if you don’t have enough funds to cover your position. So that’s why in some cases, it’s probably a good idea you exit out the put option instead of letting it expire. Of course, at the end of the day, it depends on what strategy you have in place. And just a reminder that when you’re buying a put option, you’re banking the stock will go down in price. When it does go down in price, you’ll make money, but if it goes up in price, you’ll lose money.
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Legal Disclosure: I'm not a financial advisor nor a certified public accountant. These videos are for entertainment/educational purposes based off of my personal opinions. Investing in any type of investment involves risk and you need to do your own research or seek out a licensed professional if necessary. There is no guarantee that you'll gain or lose on investments.

[@captainkirkmusic]

This is the only video out of the 7 different youtubers I watched that actually answered my question. Thank you sir.

[@benzyllion]

Thanks for the feedback! :D

[@DearApolloZ]

Thank you for showing you actually closing them. This cleared the air for me.

[@benzyllion]

No problem! Glad it helped!

[@gabrieleduarte9034]

Thank you for this. I have been studying charts for option trading and didn't realize that the physical buying and selling was a bit tricky. Thank you for your clear explanation.

[@benzyllion]

Glad it was helpful!

[@tomsmith3886]

Thank you. Lots of us newbies never did an option, so we appreciate how someone does it who actually did one. Many "seminars" and such focus on placing the trade without CLOSING the trade.

[@abigailw7194]

I’ve been needing videos like yours for MONTHS!! THANK YOU!

[@benzyllion]

No problem, Abigail!

[@amordelrey]

@@benzyllion hey man do you have a patreon? Can I pay for an informal 30 minute class? You know what I mean?

[@Vmarapacuto]

In Truth they all cover many aspects but they do not inform what one is really looking for, which is what you have just done in this video! Thank you...

[@benzyllion]

Thanks, shazzan!

[@minervahollingsworth2957]

This is the only video that has show me to the point, without going around about buy and sell put options. thanks

[@benzyllion]

Thanks, Minerva! :D

[@OscarFlores-db6jm]

I love how you respond to peoples questions. Great KZbin! Thanks Ben

[@benzyllion]

Thanks, Oscar! :D

[@Hyperion760]

Very helpful. I actually just did my first put and didnt realize I needed to click on the "Do not fill tab". You saved my ass. Thanks

[@benzyllion]

You're welcome!

[@johnsample9640]

If your confident the price will go down, would it make more sense to purchase the put closer to the current price? as in your example, you purchased at $21 when the current price was 23.13. why wouldnt we want it closer to that price, say the 23 strike price?

[@Hyfehyfe]

So if the target price is hit do you make your money on puts or do you have to wait till the end of the day at market close?

[@amirzeb3800]

Can you please make a short video on stop loss on Webull because I never do it right and I’m new. It will be greatly appreciated. Thanks

[@benzyllion]

like this one? How To Set Stop Loss For Options On Webull App kzbin.info/www/bejne/m6qTnouKlLejaZo

[@amirzeb3800]

Thank you

[@titusmo6476]

This is nugget. Worth subbing...you erned it

[@benzyllion]

Thank you! :D

[@thevegandrummer83]

My Webull options tab says, "15 min delay. Click to subscribe real time quote". Should I subscribe for that? I don't see it on your screen.

[@benzyllion]

I think if you trade options a lot, you'll get the real time quote subscription, but I'm not 100% sure. I'm subscribed to their service that's why.

[@thevegandrummer83]

@@benzyllion Yeah, I went ahead and subscribed the OPRA to get the non delayed charts.

[@adrienne3802]

what is that do not exercise option mean? what happens if you don't sell before expiration? is there only the limited risk of your initial investment for puts?

[@benzyllion]

It'll either expire worthless or you'll have to execute the option if you don't sell before expiration. If it's in the money, then you'll need to have the shares (1 option = 100 shares) ready to exercise.

[@SageTrader007]

The contract expires at market open on exp date? Should we not use DNE?

[@benzyllion]

Use DNE if you don't want to exercise it. If I'm low on funds, and I know the option is about to expire, and I'm in the money, I just simply exit it out without having to wait. But that's just me.

[@ericnirenberg5019]

Hi! Thanks for the video; question! $24 was what I thought you just have to pay initially to have the OPTION to do anything; did you net $1 (meaning you made 25, - 24 for the price of buying the put) or did you lose 23 (24 - the 1 dollar you made). I hope that question is clear, Im just wondering where you paid the 24 dollars. Thank you!

[@benzyllion]

Hi Eric, in the video, I set my limit to buy the put at .24 (basically for $24), but it actually got filled at .23 (basically for $23). So I bought for $23 and I sold for $24. The difference is $1. So during the recording, I made $1 off of that trade. Hope that makes sense.

[@MrSensationman]

If you bought at $.23 and sold for $.24, the price went up. I thought ours were supposed to go down? I’m new to this and would like some more information on this. Thanks.

[@BSConservativeGOAT]

So same question as on the call video. Say you bought a put for 50$....the stock drops to 45$....do you need to buy 100 shares at 45$ first? Thanks!!

[@benzyllion]

You don't need to buy it in the beginning. It's when you get near expiration and decide to let it expire, then you'll need it. Most of the time, people would just need up closing their position and take the profits so they don't need to deal with buying the 100 shares because buying 100 shares on a stock could be costly. Hope that helps.

[@BSConservativeGOAT]

@@benzyllion so if you bought a put at $50 and the stock dropped to $45 youd just let it expire and you make the profit? Or youd close the position?

[@benzyllion]

If you let it expire, then you'll need to have the 100 shares ready so then you can make the profit. If you just close out the position before expiration, then you won't need to buy the 100 shares, basically you can still make a profit. Hope that helps.

[@pappafrodoproto4325]

my question is does it sell the shares that you already own when you sell the contracts

[@benzyllion]

No, when you buy the option and selling it back, you're just selling the contract. It cancels it out.

[@enriquevalencia678]

Hell yeah it was helpful.

[@benzyllion]

Glad you found it helpful!

[@Beto19-72]

Thank you 🙏 your videos have helped me a lot

[@benzyllion]

Thanks for the feedback, Carlos!

[@blakejohns9474]

I’m trying to understand. So you bought the contract at .23 but because the stock dipped in price now the sell price for the contract is .25, so that is why you profited?

[@benzyllion]

Yes, a put option is when you are banking the stock price is going to fall.

[@blakejohns9474]

@@benzyllion ok thank you!! what would happen though if you bought a put option above the current market price?

[@benzyllion]

No problem! The put option will just be more expensive since you're in the money.

[@fruit.jamz23]

Quick question, if you buy a position on a put out of the money, and your profit percentage is up like 600%, but the actual stock value doesn’t drop to your put number . Your basically going to lose money right ? Because you never hit the break even spot even though your percentage is high , they won’t let you close the trade with the profit

[@benzyllion]

Oh wow that's good. I'm assuming you bought way out of the money. You'll make money. Cash out before expiration or else that option that you're holding will be worthless. Hope that helps.

[@fruit.jamz23]

@@benzyllion I know this is extra, but if you could help me cash out that would be great. Because everytime I try the orders never fill and I’m assuming it’s because I bought way out of the money ($3-$4 out).

[@benzyllion]

Also, there might be low volume. This happens a lot when there's low trade volume. I've dealt with it a couple of times when I'm making money, but when it gets time to sell, no one is buying so now I'm stuck with the option. :( You can buy way out of the money and still make money, but as long as there's volume. Next time when trading, turn on "volume" and "open interest." Then you can see if there's any action at all for a specific option. Hope that helps.

[@fruit.jamz23]

@@benzyllion yea they’re low volume , I learned that while watching your vid.thanks man that helps

[@RippinLyons]

Thank you for the video!

[@benzyllion]

No problem!

[@JuanPablo-gr5pp]

Great video

[@benzyllion]

Thanks!

[@worddancer-howtowriteascre9144]

That was great!

[@benzyllion]

Thanks!

[@lostfan5054]

Also, what if the price drops a ton while I'm holding that contract? When I go to sell the contract to someone else, does it go up in value since the share price is so much lower than the strike price and whoever buys it from me is bound to make a big pile of money when they exercise the option and force someone to buy the shares from them?

[@benzyllion]

When the price drops a ton, then you will be making more in premium when you sell. When you sell it off, the other person won't be making a lot initially, because you already made the money... Hope that makes sense.

[@sedotossou]

Hi! Thank you for the video. There’s something that I didn’t understand. I thought that when you buy put you make money if the stock goes down. You got filled at $23 and sold at $24 meaning it went up $1 right? So how is it not a loss ? I didn’t get that if you can please explain

[@benzyllion]

The $23 and $24 is referring to the contract price. Not the stock price. So I bought the contract (1 option) at $23 and sold the contract (1 option) at $24. If the stock price goes down in value, the contract that I'm holding will be worth more... so instead of $24, hypothetically speaking, it could be sold at $26, $28, or even $30 if the stock price goes down more. Hope that clarifies it. :)

[@sedotossou]

@@benzyllion oh okay! So there’s no mathematical link between the price of the contract and the price of the stock. It’s not like stock goes down $0.10 = contract goes up $1 (for example) ? And also, in what case would you have had to buy the 100 shares ?

[@benzyllion]

There is a mathematical link to the price of the contract and stock price and also you have to factor in the market (what people are willing to pay). It gets complicated because there are greeks involve and understand the greeks and knowing how much the price will change if the stock price moves $1, time decay, etc... But in layman's term if you buy a put option and the stock price goes down, you can make money. As for when you have to buy the 100 shares, is when you start selling a put option and if the stock price is below your strike price, you'll need to buy the shares if you decide to hold it until expiration. Hope that clarifies it. Yes, I know it could get complicated, but once you learn a couple of the basic things down for options trading, you'll get it. :)

[@sedotossou]

@@benzyllion I understand way better. Thanks for explaining I’m gonna subscribe to your channel. So the 100 shares thing, is it only when you SELL a put ? When you buy a put basically the only thing you’re risking is the premium to go up or down ?

[@benzyllion]

Thanks! Going back to the 100 shares, when you sell a put and it's below your strike, you'll need to buy if you hold it until expiration. Also, as for buying a put (it depends, case by case). If you have 100 shares of the stocks available, then you don't need to go back to the market to buy it (if you let your put option expire in the money) because those 100 shares in your hands will be sold off to the seller anyway. If you don't have the 100 shares available and you bought a put option (and you're going to hold it until expiration because it's in the money), then you'll need to go to the market and buy 100 shares so the seller can buy back the stock from you at a higher price. Sometimes people who buy a put option (that's in the money) usually just close out their position before expiration because they might not have a lot of money to buy 100 shares to begin with. So in that case, you're just trading contracts and trying to make money with the contracts. Does that explanation help little?

[@johnsample9640]

Kinda getting it. I get the call option much better, but the puts are still confusing to me

[@benzyllion]

They have paper training for options too

[@tonykaenchan1794]

Thanks man

[@benzyllion]

No problem. :)

[@lostfan5054]

Wait what happens if you just let it expire? Is Webull gonna make me buy 100 shares of whatever? Or does the contract just expire worthless and I lose my premium? I'm okay with losing my premium but I really don't wanna be forced to buy 100 shares of something I can't afford.

[@benzyllion]

If your put option is out of the money, then you just lose your premium. If it's in the money, and it's about to expire, then your best bet is to close out your put option. It's starts to get complicated when your put option is in the money and you let it expire, because you'll need to have the 100 shares in hand to sell.

[@alan933]

Everybody has a different view of this on webull than I do, are there multiple views of this info? I have no idea what is going on trying to match this to mine.

[@benzyllion]

The idea should be the same. Understanding the basics of options will help too. :)

[@OohGii]

Omg thank you!!!!

[@benzyllion]

No problem. :)

[@ericnazario8486]

Awesome!!

[@benzyllion]

Thanks, Eric!

[@benwhite4743]

What about selling a put?

[@benzyllion]

Yes, I have a video on that. Selling a cash secure put, basically selling a put. In this case, you get a premium up front. :)

[@kebac3941]

Thank you.

[@benzyllion]

No problem. :)

[@hongthuyvn]

And what if you click the buy to close instead of sell to close?

[@benzyllion]

If you click "buy," then you'll be buying an option. Instead of selling to cancel the first option, you'll end up with 2 options. Hope that helps. :)

[@hongthuyvn]

So helpful:)

[@bfeldman17]

I set a sell limit (for put) $0.75 on a $0.80 initial entry. It filled at $0.89!!! So my profit was destroyed. Webull claims their LIMIT orders don’t know which direction it’s going so it will take the ‘best’ available which for the put option is opposite what we want. Anyone else seen this? It’s insane to me…

[@mando9993]

This doesn’t make sense to me since the market went up to make profit, but it’s a put option, he said it needed to go down but it went up

[@mando9993]

If someone can help me out with this, would appreciate it because I just bought a put option and I thought it meant you make money when the market goes down but in my position it’s showing I’m making money when the market is going up and loosing when market is going down so I’m a lil confused

[@sliphere011]

Your understanding of what happens when an option expires is wrong. You only loose the money you spent to buy the option. When options expire, they only auto execute remaining options when you are in the money, aka in the green where you make profit. If you are out of the money, aka the stock price does not give you profit, the remaining options simply expire and you loose the money you spent on the option initially. The whole point of call options is they are not shorts. Shorts you loose infinitely if the stock keeps going up. Basic Options exist specifically to limit loss you would get on shorts.

[@johndownes602]

Mine says “Sell to close” and not “close”

[@benzyllion]

Yes, they updated that. It's the same.

[@johndownes602]

@@benzyllion Thank you! Made my first profit from an option! Your videos are great but I feel the best way to go is trial by fire.

[@benzyllion]

Sweet! Yep!

[@benzyllion]

Hope this helps! :D

[@yaybenjamin]

You didn’t make a dollar you bought it at 24

[@MrSuperman90304]

Was thinking the same thing. He mistakenly said "click on call" and then corrected himself. Yeah he lost 1$. Lol. Good stuff though I appreciate the vid.

[@internetenforcers2042]

Good Lord, you need to redo this video amigo...lot's of 'uh's' and correcting what you just said and repeats...normally you have great clarity. Not so here.