Understanding Call and Put Options in TradersPost
TradersPost allows traders to select calls, puts, or both, with specific rules for how buy and sell actions are handled. The system automatically flips sell signals for puts, though a future update may allow traders to customize this behavior.
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Reviewed by Mike Christensen
Fact-checked by Mike Christensen
What Do “Both,” “Call,” and “Put” Mean in TradersPost?
When trading options in TradersPost, users can select from three option types:
1. Both (Call & Put) – Trades both call and put options based on the signal.
2. Call Only – Trades only call options.
3. Put Only – Trades only put options.
Each of these settings determines how TradersPost interprets buy and sell actions for options trading.
How TradersPost Handles Options Trades
• Both Call & Put:
• Buy Signal → Buys a Call (Bullish).
• Sell Signal → Sells to Close the Call & Buys a Put (Bearish).
• Call Only:
• Buy Signal → Buys a Call (Bullish).
• Sell Signal → Sells to Close the Call (No Put trades).
• Put Only:
• Buy Signal → Sells to Open a Put (Bearish).
• Sell Signal → Buys to Close the Put (Reverses the initial trade).
The key point is that puts work in reverse—a buy signal opens a short position (sell to open), and a sell signal closes it (buy to close).
Why This Matters
• TradersPost originally based its options behavior on underlying stock movements. If Tesla drops, a sell signal means entering a bearish put position (buying a put), not shorting a put.
• Some traders prefer direct control, where a sell signal actually sells a put rather than buying one.
• TradersPost is considering making this behavior optional so traders can choose how put orders are handled.
Future Improvements
• A possible new setting may allow traders to disable the automatic inversion for puts, giving full control over buy/sell signals.
• More clarity in the dropdown descriptions to ensure traders understand how orders are processed.
Conclusion
TradersPost handles options based on whether a trader selects both, call-only, or put-only trading. The system automatically flips sell signals for puts, which may be adjustable in future updates. Understanding these mechanics ensures traders execute their strategies correctly.
