BIG220819C00022500 Option on Big Lots


USD 15.95  0.36  2.21%   

Big Lots' option chain provides insight into all available option contracts written on Big Lots' stock. Investors can see outstanding put and call contracts with pricing information and greeks for a given expiration period. In addition, each of Big Lots' stock options below provides a detailed picture of the payoff. Comparing vital and dynamic information of various option contracts across diverse expiration periods will help you make an educated decision on your market timing strategies around investing in a given Big Lots option contract. View S&P 500 options
Purchasing Big Lots options can give investors a meaningful hedge against losses and, therefore, could be used conservatively to decrease the volatility of your portfolio. However, many options could also amount to little more than gambling, significantly enhancing your overall portfolio risk. One simple example of these aggressive strategies is the sale of "uncovered" Big Lots calls. Remember, the seller must deliver Big Lots stock to the call owner when a call is exercised.

In The Money vs. Out of Money Option Contracts on Big Lots

Analyzing Big Lots' in-the-money options over time can help investors to take a profitable long position in Big Lots regardless of its overall volatility. This is especially true when Big Lots' options are deep in the money. These options can be identified using deltas that are over 0.75. Deep in-the-money Big Lots' options could be used as guardians of the underlying stock as they move almost dollar for dollar with Big Lots' stock while costing only a fraction of its price.
Big Lots' latest option contracts expiring on 2022-10-21 are carrying combined implied volatility of 83.67 with a put-to-call open interest ratio of 0.87 over 36 outstanding agreements suggesting investors are buying slightly more calls than puts on contracts expiring on 2022-10-21. The current put volume is at 1397, with calls trading at the volume of 990. This yields a 1.41 put-to-call volume ratio. The Big Lots option chain provides detailed quote and price information for the current Big Lots option contracts. It shows all of Big Lots' listed puts, calls, expiration dates, strike prices, and other pricing information.

Open Interest Against 2022-10-21 Option Contracts

Big Lots option prices can potentially be used to forecast stock returns because most option chains provide information not only about the current prices but also about the future conditions in Big Lots' lending market. For example, when Big Lots' puts are not actively trading or completely missing in the marketplace, investors can use it to internalize expected shorting costs. So if an investor is writing a put option on Big Lots, he or she must hedge the risk by shorting Big Lots stock over its option's life.
The chart above shows Big Lots' distribution of open interest by maturity on contracts that have not yet been settled. The area between the two highest points is the projection of the price at expiration. Big Lots' open interest chart also provides vital information regarding the liquidity of an option. If there is no open interest for Big Lots' option, there is no secondary market available for investors to trade.

Big Lots Maximum Pain Price across 2022-10-21 Option Contracts

Max pain usually refers to a trading concept that asserts that market manipulation can cause the market price of particular securities such as Big Lots close to expiration to expire worthless. According to most research, approximately 10% to 15% of all stock options are exercised, while about 35% expire worthlessly, with roughly 50% traded out before the expiration date. So, Max pain occurs when market makers reach a net positive position across all options at a strike price where option holders stand to lose the most money. By contrast, option sellers may reap the most after selling more options than buying, causing them to expire worthless.
Big Lots' stock options are financial instruments that give investors the right to buy or sell shares of Big Lots common stock at a specified price for a given time period. Generally speaking, an option to purchase or sell Big Lots stock makes it part of the underlying stock when the option's price is tied to the movement of the underlying stock. If Big Lots' stock price goes up or down, the stock options follow.
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Please note that buying 'in-the-money' options on Big Lots lessens the impact of time decay, as they carry both intrinsic and time value. So, even if Big Lots' value remains static through the expiration date, the investor can sell to close an 'in-the-money' option to avoid a potential loss. However, in-the-money Big Lots contracts are usually more expensive to enter than their out-of-the-money counterparts. So keep in mind that while the payoffs on an in-the-money trade can be high, the investors could ultimately experience a more consequential loss if Big Lots Stock moves the wrong way.

Big Lots In The Money Call Balance

When Big Lots' strike price is surpassing the current stock price, the option contract against Big Lots stock is said to be in the money. When it comes to buying Big Lots' options that are 'In the Money' or 'Out of the Money', the choice depends on your outlook for the underlying security, financial situation, and what you are trying to achieve.
While 'out-of-the-money' option contracts written on Big Lots are typically viewed as the more aggressive, there are potential upsides to purchasing these types of options contracts. For one, the cost to buy an 'Out of the Money' option is lower than the cost to buy an 'In the Money' option. This cost-benefit is due to the fact that at the time of the purchase, 'Out of the Money' contracts have no intrinsic value. So, while the potential for a 100% loss is more significant, the cost and risk to enter the trade are lower.

Big Lots Current Options Market Mood

Big Lots' open interest and total value indicators provide investors with the necessary information to digest the overall options buildup for its expiring contracts. In addition, it helps Big Lots Stock's traders understand whether a recent fall or rise in the market is unreasonable and if the time has come to take contrarian positions. These ratios are calculated based on options trading volumes and current open interest.

Put-to-Call Open Interest

Put-to-Call Volume

Most options investors, including buyers and sellers of Big Lots' calls and puts, are not very successful. It is estimated that an average options trader loses somewhere between 80% to 90% of the time. Big Lots' option open interest and volume spread between outstanding puts and calls are regarded by many investors as reliable indicators of the overall future market direction. Using current Big Lots' option volume and open interest to make an investment decision is considered a contrarian-sentiment measure that can be utilized in many timing strategies in both derivative and spot marketplace.

Rule 16 of the current Big Lots contract

Base on the Rule 16, the options market is currently suggesting that Big Lots will have an average daily up or down price movement of about 5.23% per day over the life of the 2022-10-21 option contract. With Big Lots trading at $15.95, that is roughly $0.83. If you think that the market is fully incorporating Big Lots' daily price movement you should consider buying Big Lots options at the current volatility level of 83.67%. But if you have an opposite viewpoint you should avoid it and even consider selling them.

Big Lots Option Chain

When Big Lots' strike price is surpassing the current stock price, the option contract against Big Lots stock is said to be in the money. When it comes to buying options that are ITM or OTM, the choice depends on your outlook for the underlying security, financial situation, and what you are trying to achieve.
Big Lots' option chain is a display of a range of information that helps investors for ways to trade options on Big Lots. In general, an option chain provides a helpful tool for investors to see all available option contracts, both puts, and calls, for Big Lots. It also shows strike prices and maturity days for a Big Lots against a given expiration period. The table below combines all the option information in the form of a chain but before you use it, remember that it entails significant risk and it is not for everyone.
DeltaGammaOpen IntExpirationCurrent SpreadLast Price
2022-10-21 CALL at $10.00.93030.0216102022-10-216.3 - 6.79.73In
2022-10-21 CALL at $12.50.88040.048622022-10-213.9 - 4.27.9In
2022-10-21 CALL at $15.00.68640.100942022-10-212.0 - 2.151.8In
2022-10-21 CALL at $17.50.39590.12711772022-10-210.8 - 0.90.82Out
2022-10-21 CALL at $20.00.15640.07865642022-10-210.2 - 0.30.23Out
2022-10-21 CALL at $22.50.0720.04066302022-10-210.05 - 0.150.1Out
2022-10-21 CALL at $25.00.06090.028810532022-10-210.0 - 0.10.1Out
2022-10-21 CALL at $27.50.02190.01337822022-10-210.0 - 0.150.03Out
2022-10-21 CALL at $30.00.02930.013694272022-10-210.0 - 0.050.05Out
2022-10-21 PUT at $12.5-0.11480.04842662022-10-210.15 - 0.250.25Out
2022-10-21 PUT at $15.0-0.30810.103812342022-10-210.7 - 0.80.75Out
2022-10-21 PUT at $17.5-0.60670.12116832022-10-211.95 - 2.052.3In
2022-10-21 PUT at $20.0-0.88260.073611702022-10-213.7 - 4.04.08In
2022-10-21 PUT at $22.5-0.92950.039237372022-10-216.1 - 6.36.6In
2022-10-21 PUT at $25.0-0.93810.028285102022-10-218.4 - 8.86.5In
2022-10-21 PUT at $27.5-0.94340.0224982022-10-2110.9 - 11.310.75In
2022-10-21 PUT at $30.0-0.99410.0025952022-10-2113.4 - 14.011.8In
2022-10-21 PUT at $32.5-0.93720.018612022-10-2115.9 - 16.616.34In
2022-10-21 PUT at $35.0-0.9520.0146272022-10-2118.6 - 19.018.8In
2022-10-21 PUT at $37.5-0.95380.013212022-10-2121.1 - 21.421.3In
2022-10-21 PUT at $40.0-0.95510.012202022-10-2123.4 - 23.820.6In
2022-10-21 PUT at $42.5-0.97160.008512022-10-2125.9 - 26.623.5In
2022-10-21 PUT at $45.0-0.97210.00802022-10-2128.4 - 29.126.0In
2022-10-21 PUT at $47.5-0.99180.003132022-10-2130.9 - 31.526.4In
2022-10-21 PUT at $50.0-0.89610.0158432022-10-2133.2 - 34.125.5In
2022-10-21 PUT at $55.0-0.93680.011562022-10-2138.4 - 38.921.1In

Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Big Lots in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Big Lots' short interest history, or implied volatility extrapolated from Big Lots options trading.

Pair Trading with Big Lots

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Big Lots position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Big Lots will appreciate offsetting losses from the drop in the long position's value.

Moving together with Big Lots

+0.72JPMJP Morgan Chase Earnings Call  Next WeekPairCorr
+0.7PGProcter Gamble Earnings Call  In Two WeeksPairCorr
The ability to find closely correlated positions to Big Lots could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Big Lots when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Big Lots - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Big Lots to buy it.
The correlation of Big Lots is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Big Lots moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Big Lots moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Big Lots can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
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Is Big Lots' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Big Lots. If investors know Big Lots will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Big Lots listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Big Lots is measured differently than its book value, which is the value of Big Lots that is recorded on the company's balance sheet. Investors also form their own opinion of Big Lots' value that differs from its market value or its book value, called intrinsic value, which is Big Lots' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Big Lots' market value can be influenced by many factors that don't directly affect Big Lots' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Big Lots' value and its price as these two are different measures arrived at by different means. Investors typically determine Big Lots value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Big Lots' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.