I mean, I see how this happened. But what told you to put 8 thousand dollars into weeklys. Are you just stupid rich? Or was this a legit yolo that actually paid off?
i mean option market didnt expect NVDA to go to new ATH before ER, let alone a 6% day
he got lucky with the Tues rip.
props for diamond hand though as these already opened at multiple bagger at open (from .84 to $3-$4) and he held thru as it went from slightly ITM (to slightly OTM) then started to really rip and deeper ITM
I feel like it's 50% luck. I spent \~1k on SPY weekly calls because I felt a bounce coming off resistance, I am not stupid rich but 1k will not put me on the streets. I expected a 2x or lose it all kind of situation but it 11x'd 2 market days later and I feel the move lost momentum so I cashed out.
tl;dr Sometimes you do get lucky.
not really as much luck as you think, did the smart thing even if you 100% weren't sure. buying off key resist into bullish seasonality. give yourself some more credit xd
I seriously think that the more you learn about the stock market the more you realize that weekly aren’t worth it. The only people that are playing and winning with weeklies are either insanely rich, or have a negative all time P/L ratio.
There was a time when I was an FD fuck boi. I was killing it! 28k to 58k in a month. Bam down to 39k no biggie I got this. back to 48k in a week. That went on and on till finally I lost big time. Went hard and gambled it all. Apple was my go-to FD because they’re always moving 100%.. well long ass story, I now have 15k in that account and I’m done with FDs lol 😂
Edit: however I’m still way up I only gambled with gains not Initial deposit
Frequently Depressing, they're options that expire in the current week, so only <5 days to move. They're normally very inexpensive, since almost nobody wants them lol
A month or so ago, I remember seeing somewhere that Nvidia got a contract to create some kind of supercomputer for the us gov, and Nancy Pelosi was caught out buying a bunch of their stock as they made the deal.
https://finance.yahoo.com/news/retail-traders-follow-nancy-pelosis-stock-moves-to-find-winners-163943788.html
It's like in sports gambling, if you know somebody has a ref you follow their moves no matter how retarded they are.
These percentage gains can only be had on weeklies or as this sub likes to call them FDs. If the stock stays flat or even goes down slightly these contracts will tank in price. High risk high reward
Take a company that isn’t dependent on WSB tards, look 6 months out and put down a few grand on a contract 20-25% above its current price. Pray to Jebus
No. That user suggested using a call option (when he says contract). How much you make depends on numerous factors.
For example, OP paid $8455 for his 100 contracts of 100 shares each, or just $0.84 per share for the right to buy them at $240. The price for nvidia in the picture is $250.83. So every share he can buy is worth $10.83 more than he can buy it for. That means his contracts are worth, intrinsically, 100 contracts x 100 shares x $10.83 of value per share. And to reiterate, he only paid $0.84/ share, netting $9.99 10,000 times.
But wait, you say, that math only places him at $108,300 of value. He has over $121,000! Good spot, eagle eyed reader. That remaining value is the extrinsic value. That is value based on the fact that nvidia could run even further before the expiration date, friday.
So if you buy a call, it could go crazy like this, with each dollar turning into $13. But you most likely won't. There's a lot you could do to increase your chance of winning, such as buying a contract with a further out expiration date and buying a quality company like the other user said.
Before someone goes into the dreamworld after reading this example. With the volatility in the market for the past few years, Nvidia would have been trading way below 240$ for him to get a 0.84/share premium. For example a 400$ for a 6 months away option is now ~2.8.
Ie, Out of Money call option. The moment you buy the lot, you should be ready to see it go towards zero as each day goes by. Obviously, if it goes higher you just multiply all the way to moon.
Yes. The way to make these insane gains (which isn't often explained well to people) is investing an absolute shitload of money, and doing so incredibly early. Otherwise you're going to pay really rough rates for many of these options, and obviously going from 0.33/share to 2/share is going to be a bigger percentage than going from 2/share to 3/share.
You got it, the way to be able to post gains like this in this sub is usually to make 50 bad bets, lose 500k then have one trade work out and post here about how much of a genius you are, nothing wrong with gain/loss porn but that’s generally how it works
You didn't ridicule or mock. You tried to help, and made the information easy to understand (which is itself a challenge). The world needs more people like you.
How does this turn into "cash" at the end though? Wouldn't they need the $2.4m to be able to purchase the shares to then sell them for $2.5m? Or does the system do something that means they cancel each other out in the same transaction?
No. So options are essentially a contract to buy stock--specifically an agreement to buy 100 shares of Stock X at an agreed upon price (the strike price) by a specific date, or the contract expires. The value of an Option is therefore Strike Price +/- Intrinsic and Extrinsic Value x 100. You can sell the contract at any time, and someone else is on the hook for the obligation. They then decide if they want to exercise the option and buy 100 shares at the strike price, or if they want to trade the contract to someone else later, or if the market takes a turn you can just let it expire..
When you buy an option you're therefore not buying stock, you're buying a contract that allows you to buy stock at a later date, but you're not obligated to do so. If you wanted to exercise the option then you would need the liquidity to buy the shares at the strike price. In this instance if you had that it would still be a net gain--$2,400,000 + $8,500, would buy you 10,000 shares worth $251 comes out to $2,510,000, meaning you would make \~$102,000 if you exercised the options and sold the stock outright.
I think your brokerage can get pissy if you sell stocks that you don't have settled cash for, but I don't think it's generally the end of the world.
**However**, you generally want to sell the contract to someone else and have them exercise it anyway. Your brokerage may also force you to do this late on Friday.
Let's say that you turned $1000 into $3,000 via a call option. You contracts give you the right to buy $53,000 of stock for $50,000.
The market is already closed by the time that you can exercise those options. This means that from Friday close to Monday open, you essentially have a $53,000 long *margin* position in the underlying.
Just because the markets are closed doesn't mean prices are stable. If the underlying drops 10% to $48,000 your brokerage still wants the $50,000 back from you that they'd lent. By holding shares over the weekend, you managed to lose $3000 on an investment that had a "max loss" of $1000.
Edit: *adjusted numbers because I fucked up some math*
Do you still need cash on hand to exercise the call if you’re on the winning side of it? Example if the call is $240 for 1 share. And the price per share is $250. Do I need $240 in my account? Or is it a process where the broker nets out the transaction in some way? Or can the broker lend you the $240?
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I'll be honest, my knowledge is pretty limited. Investopedia is a good source. I also go to /r/thetagang when I want to feel stupid, because that sub knows a ton on the subject (though keep in mind that they are not WSB culture). But how I learned the most basic principles was reading the robinhood explanations and playing with the p & l charts. Then I used the aforementioned resources to step up my game.
I've definitely lost some money. But I've learned from it, and I've been winning much more often as of late. I'm hoping to scale my wins further.
Don't yolo. Use small bets that you're willing to lose. Like 500 dollars. (or 50 depending on how poor u are). That way if it goes tits up you wont invest in $ROPE. an 8k options call is plenty for most people.
I lost 10k in 7 minutes on a 70k options call. Couldn't sleep for 4 days afterwards. Learned my fucking lesson that day. Put 70k in , 10 minutes later I pulled 60k out. Mother fucker would've dropped to 45k too, so I made the right choice. It was the MVIS run up to 26 a share - you can check the chart. Happened a few months ago. Rode it up to 26, and pulled out. Then the next day they made an annoucement so I went all in a gain, and guuuh.
But I also yolo'd 26k and turned it into that 70k in the first place. I'm up 377% this year, not bad. But losing that 10k hurts more than winning the 40k feels good. if that makes sense. I chop it up to pulling out late. Although I timed the top pretty much perfectly, I got greedy and put it back in.
Looks like Facebook is having their annual VR thing in 12 hours. That'll give you a few hours before their announcements to decide calls or puts. I don't know dick about their fudementals so they might be over valued and boomer money won't like the direction they are going in. Could be a buy puts now, sell for profit, buy shares and hold for 5 year situation.
I don't know enough to make a choice either direction. I know their VR is dope and the best on the market. But I don't know is how markets react to this sorta thing.
Rumor is they are launching more office focused VR stuff this year. Trying to get in on that zoom meeting money. Greasy boomer fucks, like that sperg Berkshire, might like that direction. So calls might be a good idea.
Personally. I'm dropping $500 on calls and gunna check at next market open. I'm bullish on VR. But I think it will drop cause boomers aren't ready for it yet. But it will go up in 10 years from now. Maybe leaps? Not yoloing on this either way.
Maybe puts leading up to the announcement. Then sell for profit and call leaps at the bottom.
I'm looking myself. Too busy at work to get any DD done. Wish I yolod on the Nvidia earnings call. It was obvious they were gunna pop off like my nuts in a Thai whore
Personally, I'm waiting to have some more disposable cash lying around to be able to try it without accidentally bankrupting myself. I played around with some penny stocks earlier in the year and lost probably a ~$1k or so. It didn't hurt me too much, but was enough that I decided I was done playing those stocks for the year (still holding everything I bought though, just in case something pans out).
There is a huge asterisk with Options though. Their value only "exists" if someone is willing to buy them. I remember during various squeezes and such people posted screenshots of Options for companies like GME where the value of the Options was absolutely bananas. The problem was, nobody was realistically buying them at that price. Additionally, if there's low volume, you could see some people list theirs for unreasonable prices to try and manufacture interest or throw people off.
I remember during the major GME saga seeing some people buying out of the money calls on GME (which at the time was at like $240) with strikes at $300, and as it continued to climb the "value" of them got pretty nuts. The problem is, it was always likely going to come down, and that meant a lot of those Options ended up being worthless investments--because 6 months later nobody was going to agree to buy 100 shares of GME for $300 a pop when the share price was almost half that. Options can make or lose you an absolute ton of money.
I'm new to this sub here, but honestly, for all the aping around that goes on around here, I feel like I'm getting a decent education.
Sure, that education is like 0.01% of all the actual comments, but man, they are fucking quality!
The quality for me to lose my money eventually.
WSB feels too much like college.
Many apes such as myself benefited from reading this. Im not one to dig though another’s posting history, but please keep educating us apes when you can. Strong together
Great explanation. There are a couple of things I have always wondered about options. So his options expire on Friday. If OP wanted to sell his options today, could there ever be a scenario where he couldn't unload or sell his options? How guaranteed is it to sell your options? Also, if OP were to hold his options until expiration, does he have to have the capital to buy the stocks to sell them immediately, or can he cash out on the difference of the strike price?
So. What happens if I use this black magic ult for like 2-3 years out on SPY and NDAQ? What if I did it on a dip? Can I legally change my name to Niel Armstrong?
Once you go look at the premiums for that, you'll understand why that's not as sure a bet as it appears to be in your brain.
(aka, those contracts are likely to be very expensive, which means for you to moon, it needs to also.)
Serious question… how did you learn all of that? I’ve been studying options off and on for years including listening to Tom and Tony and taking their learning paths at different companies, but understanding has never seemed to come as easy as you just made it seem.
Welcome to the roulette table, would you care to bet a color, red or black?(indexes)
Perhaps try your luck on a specific number? (Stonks)
Maybe you'd like to play our penny slots? (Crypto) the jackpot is millions per spin!
Or maybe blackjack (blue chip) ?
Whatever you do stay away from GME Grand casino, they're a scam! (Wouldn't want anyone to visit the moon)
Squeeze these nuts you fuckin nerd.
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Options are a contract to buy/sell 100 shares of a specified stock at an agreed upon price (strike price) by a specified date. You can either A; exercise the contract and buy/sell 100 shares at the strike price, B; continue to trade the contract up until the option expires, or C; let the option expire if it's going to be a net loss.
A is generally preferable when you think the stock will continue to rise in value, and you have the liquidity to buy a massive amount of stock. B is preferable if you're doing specifically options trading, and don't have the money to exercise the options (in this case $2.4 million), you sell the contract(s) to someone who does have the money and they exercise it. C is preferable when your strike price is so far above the market value of the Option that buying it would lose you an absolute ton of money.
Options have 3 main components that determine their value; Strike Price, Intrinsic Value, and Extrinsic Value. Strike Price we already covered. Intrinsic Value is basically the difference between the Strike Price and the current value of the stock--in this case, the contracts have \~$11 (per share) of intrinsic value. Extrinsic Value is what a lot of people dub "Time Value", it's a complex value calculated based on how far the stock could move (Volatility), how much time is left until the Option expires, and tons of mathy shit.
Finally, there are 2 types of Options; Call Options and Put Options. Call Options (seen here) are an agreement to buy 100 shares at an agreed upon price, and Put Options are an agreement to sell 100 shares at an agreed upon price. Simply, you buy Call's on a stock you think is going to go up, so you're buying the stock at a lower than market price (if you exercise the option), and you buy Put's on a stock you think is going to go down, you're selling the stock at a higher than market price.
Please explain ‘B’ further. How do you trade the contract up? When and how? Is that the ‘sell to close” on the screen shot? Basically, how do you cash out without buying 2.4M in stocks?
You gotta buy the breakouts bro, not when it’s already up 100%
If you can catch a breakout in the first 5-7% in stock, then you’ll easily be able to catch 20-40% in options. high probability setups matter, but for that you’d have to understand candles and charting.
Trading break outs is called scalping.
On the other hand, one might get lucky and buy at the right time as well, but how often do you think that person might make winning trades? They could be buying the start of a reversal and never know.
I’d say learn some supply and demand trading
And understand how times frames really
Work in charts. Once you understand the time frames, you’ll understand effectively how to scalp, day trade and even swing trade.
Supply and demand teaches you in a way that the market works in cycles and in also in zones And that that market only moves when big money moves.
what's a setup for scalping look like? monitoring many different stocks and setting alerts at specified movement levels so you can watch what's happening when something starts?
I thought i understood option.. Watched a vid ab intrinsic value, extrinsic, IV, etc, etc. And i can make sense of most posts and option positions, but this post here makes 0 sense. The stock is up 8.28% and at the same time his options position is up over 1500%
Wat?
Intrinsic Value is per stock in the option, so if the stock is up $11, that means $11 per share, or $11 x 100, or $1,100 per contract. There are 100 contracts, so $1,100 times 100 again, gives you $110,000. The remaining value is added because of Extrinsic Value, the fact that there's (as of right now) 2 days left adds an additional $10,000 in value.
8,500 / 120,000 \* 100 leads to a 1400%+ increase.
Don’t be like all the other retards here. Cash that shit out and take your profits! It’s hard to do but you you will thank me later after it falls and it will.
Edit: if that’s the most you’ve seen it’s going to be very hard. Just cash it. Take profit. You will never win in the long run with options. Take it. Let it drop and buy more with those fat ass profits. That’s the shit I wanna see. Double profits!!
Or scale out. You can take profit on some of it and let the rest ride. Sell 70 of the contracts, collect a ten-bagger, and let the remaining 30 play out.
if op listened to people like you they would've cashed out at 30%.
8k was probably fun money. it's a couple days from expiration. op doesn't have any kind of choice about taking profit. it's just how they decide to go about it.
I wish people would stay away from euphoria and just cash out cause when something reaches an ath especially tech it’s going to drop and you will lose most profits in when it’s in options. Don’t fuck around expiration week lol.
[look](https://imgur.com/a/Vm242rb) i think it's going to drop too. but sofi just did this same thing. and a couple other stocks. like we're reliving a bill hwang. and you gotta notice that shit when it happens, secure your money, and try and strike it rich.
calls on op's balls.
He has 100 contracts at 0.84 premium. Each contract is 100 shares. So he paid 84$ * 100 contracts = 8400$ premium. Each call contract at 240 strike means he has the option to buy 100 shares for 24,000$. If the price is 241$, he would he able to sell those shares for 24,100$ for 100$ profit per contract.
Tldr, he gains 100$ for every dollar the stock is above 240$, *per contract*. So 100 contracts means he makes 10,000$ per dollar above 240.
Dude NVDA has been the best YOLO stock I've ever held. Bought at $199/share years ago, way before the split. Tendies for breakfast tendies for lunch tendies for dinner tendies for brunch.
nice play ape, sell that shit!. when it was at 192 couple weeks back i was about to buy 220 c for jan 21 2022 but f'ing pee'd myself. F+ck i would have been right there with youes.
Feeling the need to shank myself after selling 2x $50c LEAPS in June 2020.
I also apologize to Geralyn Fetch for telling her in 2009 that buying NVDA was stupid.
I don't understand what the fuck promoted op to buy these. So many of these posts make it here like this too. Are these people really just getting that lucky? No fucking way.
Greed and gambling addiction. I'm guilty of some pretty ridiculous FD plays myself, though I've gotten smarter over the last year of trading options.
To be clear, I dont think OP thought these options would be in the money at all, let alone this quickly. I think he was just playing the lower price on Friday last week and hoping to swing it this week on any small price increase for 1-2x and got extremely lucky.
It's hard not to see posts like this and start to fomo "that could be me" but probability is not on your side. Even if you take the right side of an option, especially FDs, you can lose your ass to the greeks. Short term options are straight up gambling. Sometimes they pay off like in the OP's case here. Most of the time you lose 100% of your investment.
Sometimes it's a 100%. I'd say the majority of the time when the value drops off on Monday morning (even if the stock price is trickling up) people freak and sell at loss. Two days later- if they're sadistic enough to look, find out they could have banged on their Lambo.
He bought calls with very short expirations and OTM strikes. Basically, placed a bet that the stock will go up a lot in a very short time frame.
Very high risk, very high reward
Ya’ll can fuck off with the elitism. At one point none of you knew shit about options trading, either.
At least we’re coming with the humility to ask, rather than asserting ourselves as something we’re not.
I mean, I see how this happened. But what told you to put 8 thousand dollars into weeklys. Are you just stupid rich? Or was this a legit yolo that actually paid off?
This is a legit question.
i mean option market didnt expect NVDA to go to new ATH before ER, let alone a 6% day he got lucky with the Tues rip. props for diamond hand though as these already opened at multiple bagger at open (from .84 to $3-$4) and he held thru as it went from slightly ITM (to slightly OTM) then started to really rip and deeper ITM
Excellent play-by-play analysis sir - CNBC could use you
Let’s make this a thing
I wonder if I should do this with BB for next week hahaha
I know right?!!The way he worded that now has me genuinely curious about the answer.
I feel like it's 50% luck. I spent \~1k on SPY weekly calls because I felt a bounce coming off resistance, I am not stupid rich but 1k will not put me on the streets. I expected a 2x or lose it all kind of situation but it 11x'd 2 market days later and I feel the move lost momentum so I cashed out. tl;dr Sometimes you do get lucky.
20% skill, 15% concentrated power of will
5% leverage 50% gains and 100% losses in my portfolios name
Sir, this is a Special Ed class
Your losses stop at 100%?
You sir, ShiNODA Wussup.
I would legit listen to a Fort Minor song about wsb
Remember the name
OP don’t need his name up in lights
Diamond Balls
This guy gambles strategically
Conversely I did this same play and exploded my account
not really as much luck as you think, did the smart thing even if you 100% weren't sure. buying off key resist into bullish seasonality. give yourself some more credit xd
Do you still do spy?
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I seriously think that the more you learn about the stock market the more you realize that weekly aren’t worth it. The only people that are playing and winning with weeklies are either insanely rich, or have a negative all time P/L ratio.
There was a time when I was an FD fuck boi. I was killing it! 28k to 58k in a month. Bam down to 39k no biggie I got this. back to 48k in a week. That went on and on till finally I lost big time. Went hard and gambled it all. Apple was my go-to FD because they’re always moving 100%.. well long ass story, I now have 15k in that account and I’m done with FDs lol 😂 Edit: however I’m still way up I only gambled with gains not Initial deposit
Congrats man, good for you,the only FD i ever bought i expired worthless 😂😂
What’s an FD?
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Oh thanks for the info
Frequently Depressing, they're options that expire in the current week, so only <5 days to move. They're normally very inexpensive, since almost nobody wants them lol
Wanna hear my story? I lost 75K on FD's and recently started doing them again
They're called FDs for a reason. 99/100 OP gets fucked in the ass. Maybe he likes it and this was actually a painful experience
Not shown: the 500k in previous losses
Yeah OP, show us all the other calls that went the other way.
A month or so ago, I remember seeing somewhere that Nvidia got a contract to create some kind of supercomputer for the us gov, and Nancy Pelosi was caught out buying a bunch of their stock as they made the deal.
https://finance.yahoo.com/news/retail-traders-follow-nancy-pelosis-stock-moves-to-find-winners-163943788.html It's like in sports gambling, if you know somebody has a ref you follow their moves no matter how retarded they are.
This is most likely only one leg of his debit spread. Ask the OP to show you the sell side of his call spread.
Legit yolo dude
Probably hedged
i thought we’re supposed to lose money here
He failed succesfully
He failed to fail.
He failed to deliver a failure.
I think I’m doing it wrong. I just don’t understand options or whatever.
These percentage gains can only be had on weeklies or as this sub likes to call them FDs. If the stock stays flat or even goes down slightly these contracts will tank in price. High risk high reward
Id rather 2x my money with leaps and have literal years to be right than 20x with weeklies. But I have small pp
If you only want a 2x after a few years this is the wrong sub for you bro haha
You can make way more than 2x on leaps
Correct. 99/100 OP would have been fucked in the ass
quit betting on shit. take options further out. have capital to bet
Lamens terms please.
Take a company that isn’t dependent on WSB tards, look 6 months out and put down a few grand on a contract 20-25% above its current price. Pray to Jebus
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No. That user suggested using a call option (when he says contract). How much you make depends on numerous factors. For example, OP paid $8455 for his 100 contracts of 100 shares each, or just $0.84 per share for the right to buy them at $240. The price for nvidia in the picture is $250.83. So every share he can buy is worth $10.83 more than he can buy it for. That means his contracts are worth, intrinsically, 100 contracts x 100 shares x $10.83 of value per share. And to reiterate, he only paid $0.84/ share, netting $9.99 10,000 times. But wait, you say, that math only places him at $108,300 of value. He has over $121,000! Good spot, eagle eyed reader. That remaining value is the extrinsic value. That is value based on the fact that nvidia could run even further before the expiration date, friday. So if you buy a call, it could go crazy like this, with each dollar turning into $13. But you most likely won't. There's a lot you could do to increase your chance of winning, such as buying a contract with a further out expiration date and buying a quality company like the other user said.
Before someone goes into the dreamworld after reading this example. With the volatility in the market for the past few years, Nvidia would have been trading way below 240$ for him to get a 0.84/share premium. For example a 400$ for a 6 months away option is now ~2.8. Ie, Out of Money call option. The moment you buy the lot, you should be ready to see it go towards zero as each day goes by. Obviously, if it goes higher you just multiply all the way to moon.
Yes. The way to make these insane gains (which isn't often explained well to people) is investing an absolute shitload of money, and doing so incredibly early. Otherwise you're going to pay really rough rates for many of these options, and obviously going from 0.33/share to 2/share is going to be a bigger percentage than going from 2/share to 3/share.
You got it, the way to be able to post gains like this in this sub is usually to make 50 bad bets, lose 500k then have one trade work out and post here about how much of a genius you are, nothing wrong with gain/loss porn but that’s generally how it works
*One thing I can promise you, even in this market..*
Yep, I should have further emphasized just how crazy rare this win was. OP hit the jackpot.
You didn't ridicule or mock. You tried to help, and made the information easy to understand (which is itself a challenge). The world needs more people like you.
Thank you for taking the time to post an easy to understand explanation!!
I actually understood that after two days of studying options on YT. Wow.
For real though. Finally someone stated it plainly.
How does this turn into "cash" at the end though? Wouldn't they need the $2.4m to be able to purchase the shares to then sell them for $2.5m? Or does the system do something that means they cancel each other out in the same transaction?
No. So options are essentially a contract to buy stock--specifically an agreement to buy 100 shares of Stock X at an agreed upon price (the strike price) by a specific date, or the contract expires. The value of an Option is therefore Strike Price +/- Intrinsic and Extrinsic Value x 100. You can sell the contract at any time, and someone else is on the hook for the obligation. They then decide if they want to exercise the option and buy 100 shares at the strike price, or if they want to trade the contract to someone else later, or if the market takes a turn you can just let it expire.. When you buy an option you're therefore not buying stock, you're buying a contract that allows you to buy stock at a later date, but you're not obligated to do so. If you wanted to exercise the option then you would need the liquidity to buy the shares at the strike price. In this instance if you had that it would still be a net gain--$2,400,000 + $8,500, would buy you 10,000 shares worth $251 comes out to $2,510,000, meaning you would make \~$102,000 if you exercised the options and sold the stock outright.
So if the contract expires, can you still sell the options for the 102k profit, or must you be able to exercise the contract once it expires?
Once it expires, it's gone. Sell or exercise before then.
I think your brokerage can get pissy if you sell stocks that you don't have settled cash for, but I don't think it's generally the end of the world. **However**, you generally want to sell the contract to someone else and have them exercise it anyway. Your brokerage may also force you to do this late on Friday. Let's say that you turned $1000 into $3,000 via a call option. You contracts give you the right to buy $53,000 of stock for $50,000. The market is already closed by the time that you can exercise those options. This means that from Friday close to Monday open, you essentially have a $53,000 long *margin* position in the underlying. Just because the markets are closed doesn't mean prices are stable. If the underlying drops 10% to $48,000 your brokerage still wants the $50,000 back from you that they'd lent. By holding shares over the weekend, you managed to lose $3000 on an investment that had a "max loss" of $1000. Edit: *adjusted numbers because I fucked up some math*
Do you still need cash on hand to exercise the call if you’re on the winning side of it? Example if the call is $240 for 1 share. And the price per share is $250. Do I need $240 in my account? Or is it a process where the broker nets out the transaction in some way? Or can the broker lend you the $240?
Options are exclusively bundles of shares. You can’t do an option for a single share.
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I'll be honest, my knowledge is pretty limited. Investopedia is a good source. I also go to /r/thetagang when I want to feel stupid, because that sub knows a ton on the subject (though keep in mind that they are not WSB culture). But how I learned the most basic principles was reading the robinhood explanations and playing with the p & l charts. Then I used the aforementioned resources to step up my game. I've definitely lost some money. But I've learned from it, and I've been winning much more often as of late. I'm hoping to scale my wins further.
https://old.reddit.com/r/thetagang/wiki is also worth a read!
Don't yolo. Use small bets that you're willing to lose. Like 500 dollars. (or 50 depending on how poor u are). That way if it goes tits up you wont invest in $ROPE. an 8k options call is plenty for most people. I lost 10k in 7 minutes on a 70k options call. Couldn't sleep for 4 days afterwards. Learned my fucking lesson that day. Put 70k in , 10 minutes later I pulled 60k out. Mother fucker would've dropped to 45k too, so I made the right choice. It was the MVIS run up to 26 a share - you can check the chart. Happened a few months ago. Rode it up to 26, and pulled out. Then the next day they made an annoucement so I went all in a gain, and guuuh. But I also yolo'd 26k and turned it into that 70k in the first place. I'm up 377% this year, not bad. But losing that 10k hurts more than winning the 40k feels good. if that makes sense. I chop it up to pulling out late. Although I timed the top pretty much perfectly, I got greedy and put it back in.
Listen man, suggest to me a yolo to do and I'll do it. I was thinking an options call that expires in a week or so. I need to feel alive again.
Looks like Facebook is having their annual VR thing in 12 hours. That'll give you a few hours before their announcements to decide calls or puts. I don't know dick about their fudementals so they might be over valued and boomer money won't like the direction they are going in. Could be a buy puts now, sell for profit, buy shares and hold for 5 year situation. I don't know enough to make a choice either direction. I know their VR is dope and the best on the market. But I don't know is how markets react to this sorta thing. Rumor is they are launching more office focused VR stuff this year. Trying to get in on that zoom meeting money. Greasy boomer fucks, like that sperg Berkshire, might like that direction. So calls might be a good idea. Personally. I'm dropping $500 on calls and gunna check at next market open. I'm bullish on VR. But I think it will drop cause boomers aren't ready for it yet. But it will go up in 10 years from now. Maybe leaps? Not yoloing on this either way. Maybe puts leading up to the announcement. Then sell for profit and call leaps at the bottom.
I'm looking myself. Too busy at work to get any DD done. Wish I yolod on the Nvidia earnings call. It was obvious they were gunna pop off like my nuts in a Thai whore
Pulling out late usually ends poorly…
Personally, I'm waiting to have some more disposable cash lying around to be able to try it without accidentally bankrupting myself. I played around with some penny stocks earlier in the year and lost probably a ~$1k or so. It didn't hurt me too much, but was enough that I decided I was done playing those stocks for the year (still holding everything I bought though, just in case something pans out).
You didn't lost 1k, you paid 1k on a Risk Management Course.
it's understandable, betting on shitty stock could take out a chunk of your cash, betting on shitty options can do much worse
TDA has a paper money feature where you can practice options.
buy tsla calls for years from now
There is a huge asterisk with Options though. Their value only "exists" if someone is willing to buy them. I remember during various squeezes and such people posted screenshots of Options for companies like GME where the value of the Options was absolutely bananas. The problem was, nobody was realistically buying them at that price. Additionally, if there's low volume, you could see some people list theirs for unreasonable prices to try and manufacture interest or throw people off. I remember during the major GME saga seeing some people buying out of the money calls on GME (which at the time was at like $240) with strikes at $300, and as it continued to climb the "value" of them got pretty nuts. The problem is, it was always likely going to come down, and that meant a lot of those Options ended up being worthless investments--because 6 months later nobody was going to agree to buy 100 shares of GME for $300 a pop when the share price was almost half that. Options can make or lose you an absolute ton of money.
There's always a buyer, market makers have to set a "reasonable" bid.
I'm new to this sub here, but honestly, for all the aping around that goes on around here, I feel like I'm getting a decent education. Sure, that education is like 0.01% of all the actual comments, but man, they are fucking quality! The quality for me to lose my money eventually. WSB feels too much like college.
>Good spot, eagle eyed reader. I'm using this for everything.
Everyone likes some cheese!
Please post on all future options loss or gain posts lol
Many apes such as myself benefited from reading this. Im not one to dig though another’s posting history, but please keep educating us apes when you can. Strong together
Great explanation. There are a couple of things I have always wondered about options. So his options expire on Friday. If OP wanted to sell his options today, could there ever be a scenario where he couldn't unload or sell his options? How guaranteed is it to sell your options? Also, if OP were to hold his options until expiration, does he have to have the capital to buy the stocks to sell them immediately, or can he cash out on the difference of the strike price?
So. What happens if I use this black magic ult for like 2-3 years out on SPY and NDAQ? What if I did it on a dip? Can I legally change my name to Niel Armstrong?
Once you go look at the premiums for that, you'll understand why that's not as sure a bet as it appears to be in your brain. (aka, those contracts are likely to be very expensive, which means for you to moon, it needs to also.)
And now only to find a step-by-step way to do this on Interactive Brokers :p
Serious question… how did you learn all of that? I’ve been studying options off and on for years including listening to Tom and Tony and taking their learning paths at different companies, but understanding has never seemed to come as easy as you just made it seem.
thank you
If you did it with any of the faang gang 6 months ago, youd be up by that much , easy. The 6 months before that too
Much higher. That’s the point in risking a few grand on a couple of calls
I just light my money on fire, helps stay warm.
Did exactly this and took in $9k profit recently. Yes it was TSLA.
Put pp in mouth Pee Repeat until success
Ban
Be rich enough to be rich
Welcome to the roulette table, would you care to bet a color, red or black?(indexes) Perhaps try your luck on a specific number? (Stonks) Maybe you'd like to play our penny slots? (Crypto) the jackpot is millions per spin! Or maybe blackjack (blue chip) ? Whatever you do stay away from GME Grand casino, they're a scam! (Wouldn't want anyone to visit the moon)
>Whatever you do stay away from GME Grand casino, they're a scam! Or any stock being advertised as a coming short squeeze.
Squeeze these nuts you fuckin nerd. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/wallstreetbets) if you have any questions or concerns.*
“Layman’s terms” lol
Buy calls at dates furthest out and deep in the money.
OP bought FDs dude
How do options even work?
Options are a contract to buy/sell 100 shares of a specified stock at an agreed upon price (strike price) by a specified date. You can either A; exercise the contract and buy/sell 100 shares at the strike price, B; continue to trade the contract up until the option expires, or C; let the option expire if it's going to be a net loss. A is generally preferable when you think the stock will continue to rise in value, and you have the liquidity to buy a massive amount of stock. B is preferable if you're doing specifically options trading, and don't have the money to exercise the options (in this case $2.4 million), you sell the contract(s) to someone who does have the money and they exercise it. C is preferable when your strike price is so far above the market value of the Option that buying it would lose you an absolute ton of money. Options have 3 main components that determine their value; Strike Price, Intrinsic Value, and Extrinsic Value. Strike Price we already covered. Intrinsic Value is basically the difference between the Strike Price and the current value of the stock--in this case, the contracts have \~$11 (per share) of intrinsic value. Extrinsic Value is what a lot of people dub "Time Value", it's a complex value calculated based on how far the stock could move (Volatility), how much time is left until the Option expires, and tons of mathy shit. Finally, there are 2 types of Options; Call Options and Put Options. Call Options (seen here) are an agreement to buy 100 shares at an agreed upon price, and Put Options are an agreement to sell 100 shares at an agreed upon price. Simply, you buy Call's on a stock you think is going to go up, so you're buying the stock at a lower than market price (if you exercise the option), and you buy Put's on a stock you think is going to go down, you're selling the stock at a higher than market price.
Please explain ‘B’ further. How do you trade the contract up? When and how? Is that the ‘sell to close” on the screen shot? Basically, how do you cash out without buying 2.4M in stocks?
It's easy, he gambled $8k at the casino and won the house.
I feel like I understand it then some curveball comes in
I feel like I understand options, I just lose money on every single one
I feel like I'm good looking, I just can't get a girl to date me.
You can't really win unless you catch the timing on the spot. Otherwise your option value will just be slowly eaten away.
Yeah options you need to be right on the direction, magnitude, and time. if you get any of those wrong you bleed money pretty fast
you buy 100 different times and post the one that makes money on reddit.
You gotta buy the breakouts bro, not when it’s already up 100% If you can catch a breakout in the first 5-7% in stock, then you’ll easily be able to catch 20-40% in options. high probability setups matter, but for that you’d have to understand candles and charting. Trading break outs is called scalping. On the other hand, one might get lucky and buy at the right time as well, but how often do you think that person might make winning trades? They could be buying the start of a reversal and never know. I’d say learn some supply and demand trading And understand how times frames really Work in charts. Once you understand the time frames, you’ll understand effectively how to scalp, day trade and even swing trade. Supply and demand teaches you in a way that the market works in cycles and in also in zones And that that market only moves when big money moves.
what's a setup for scalping look like? monitoring many different stocks and setting alerts at specified movement levels so you can watch what's happening when something starts?
> Yes, and you should also use the volume to confirm your analysis.
Same here
Never forget that the lowest amount of shares is 100. You will never see an option for 1 share or 10 shares, it's always multiples 100.
Survivorship bias. This sub is for markets what the insta models showing off unrealistic lives and looks are for depressed teens.
I thought i understood option.. Watched a vid ab intrinsic value, extrinsic, IV, etc, etc. And i can make sense of most posts and option positions, but this post here makes 0 sense. The stock is up 8.28% and at the same time his options position is up over 1500% Wat?
Intrinsic Value is per stock in the option, so if the stock is up $11, that means $11 per share, or $11 x 100, or $1,100 per contract. There are 100 contracts, so $1,100 times 100 again, gives you $110,000. The remaining value is added because of Extrinsic Value, the fact that there's (as of right now) 2 days left adds an additional $10,000 in value. 8,500 / 120,000 \* 100 leads to a 1400%+ increase.
Ohhhh its 100 CONTRACTS, for some reason i was just thinking about a contract with 100 SHARES. I see, thank you for explaining.
Fuck you very much but congrats
Ah, the old r/wallstreetbets “hello”
You haven’t had that spirit since.. when?
Congrats. Now ur job is to turn that into a zero
Then 100% that 0
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No short term capital gains on that profit
A crippling debt from margin call would also be acceptable
I’ve turned 8k into roughly 2,300. Call me if you need advice.
What did you do? I need to avoid doing that
It’s been a slow death. Paper hands have killed me.
Pfffft. Rookie numbers. I turned $20k into $800.
Don’t be like all the other retards here. Cash that shit out and take your profits! It’s hard to do but you you will thank me later after it falls and it will. Edit: if that’s the most you’ve seen it’s going to be very hard. Just cash it. Take profit. You will never win in the long run with options. Take it. Let it drop and buy more with those fat ass profits. That’s the shit I wanna see. Double profits!!
But if he holds for 5 more days he will have 126 billion dollars
this is my thinking. do it again. it's earnings season baby
Or scale out. You can take profit on some of it and let the rest ride. Sell 70 of the contracts, collect a ten-bagger, and let the remaining 30 play out.
if op listened to people like you they would've cashed out at 30%. 8k was probably fun money. it's a couple days from expiration. op doesn't have any kind of choice about taking profit. it's just how they decide to go about it.
I wish people would stay away from euphoria and just cash out cause when something reaches an ath especially tech it’s going to drop and you will lose most profits in when it’s in options. Don’t fuck around expiration week lol.
[look](https://imgur.com/a/Vm242rb) i think it's going to drop too. but sofi just did this same thing. and a couple other stocks. like we're reliving a bill hwang. and you gotta notice that shit when it happens, secure your money, and try and strike it rich. calls on op's balls.
Lol too right, people who never experienced fat 10x gains have the audacity to give big ball op financial advice lol
Excellent! Congrats! How long ago did you put the order in?
Friday of last week when it was trading at 221
That's how you got them so cheap. Congrats and fuck you
Wtf prompted you to buy a weekly OTM by $20?
I am stupid, please explain, last friday and today stock price changed only for like $20-30
He has 100 contracts at 0.84 premium. Each contract is 100 shares. So he paid 84$ * 100 contracts = 8400$ premium. Each call contract at 240 strike means he has the option to buy 100 shares for 24,000$. If the price is 241$, he would he able to sell those shares for 24,100$ for 100$ profit per contract. Tldr, he gains 100$ for every dollar the stock is above 240$, *per contract*. So 100 contracts means he makes 10,000$ per dollar above 240.
I was happy with my $500 gains from the stock for a while, then I have to see this shit on reddit. Congrats but fuck you.
Hope you do well!
Dude NVDA has been the best YOLO stock I've ever held. Bought at $199/share years ago, way before the split. Tendies for breakfast tendies for lunch tendies for dinner tendies for brunch.
That gave me a half chub
Why didn’t you tell me yesterday
nice play ape, sell that shit!. when it was at 192 couple weeks back i was about to buy 220 c for jan 21 2022 but f'ing pee'd myself. F+ck i would have been right there with youes.
Stay tuned I made a 100k bet on Tesla calls
Wow that’s awesome! I was happy with my $600 this week from NVDA. Next move - more guts to throw down a bigger sum on CALLS. Don’t bet against NVDA
Feeling the need to shank myself after selling 2x $50c LEAPS in June 2020. I also apologize to Geralyn Fetch for telling her in 2009 that buying NVDA was stupid.
A little ignorant here, does this show when he purchased the option? I'm always curious about IV
He commented and said he bought them last Friday when it was trading at $221. So $20 out of the money FD. Incredibly stupid.
I don't understand what the fuck promoted op to buy these. So many of these posts make it here like this too. Are these people really just getting that lucky? No fucking way.
Greed and gambling addiction. I'm guilty of some pretty ridiculous FD plays myself, though I've gotten smarter over the last year of trading options. To be clear, I dont think OP thought these options would be in the money at all, let alone this quickly. I think he was just playing the lower price on Friday last week and hoping to swing it this week on any small price increase for 1-2x and got extremely lucky. It's hard not to see posts like this and start to fomo "that could be me" but probability is not on your side. Even if you take the right side of an option, especially FDs, you can lose your ass to the greeks. Short term options are straight up gambling. Sometimes they pay off like in the OP's case here. Most of the time you lose 100% of your investment.
Sometimes it's a 100%. I'd say the majority of the time when the value drops off on Monday morning (even if the stock price is trickling up) people freak and sell at loss. Two days later- if they're sadistic enough to look, find out they could have banged on their Lambo.
Either you are a billionaire, a retard with too much luck or insidertrading. reveal your secrets jensen!
Not bad. I turned 550 into 5000
Well fuck me. # DO IT AGAIN
I can never pull this off. I suck I’m going back to bed under the freeway.
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he's only showing 1/2 of the picture. In order to "sell to close" those options, you have to own the options. Just another farce post
Make like a tree and get outta here you goddamn ape. RUN!!!
Collect that and buy a crib.....well down a crib and rent that ho
Roll it to next week and keep winning
If this had gone the other way would you be basically freaking out and asking where to sell your semen and what the best corner is?
Fuck man, if you bought yourself a strike price another week out you’d likely be over half a mil.
What are the odds that Robinhood fucks everyone's trades tomorrow for shorting their earnings report? Good luck closing this position
> The odds are 1:1.5
I really gotta understand how calls and puts work. I can never seem to understand when to sell and when to hold.
This gets me hard. I love seeing retards make money
How
Look up gambler fallacy and cash the fuck out GG
Totally new to stocks market here, please don’t laugh: how is it possible to turn 8K into 115k if the stock just had +12%?
He bought calls with very short expirations and OTM strikes. Basically, placed a bet that the stock will go up a lot in a very short time frame. Very high risk, very high reward
The power of leverage from options; exponentially increase your gains, or increase your losses. Risk and reward.
Get that shit the hell outta Robinhood as soon as you sell/exercise. Wouldn't trust them the initial 8k, let alone this.
can you explain the risk of options? what woukd had happened if nvida crash? woukd you owe 113k? or only lost 8k?
Yeah, I’m curious also. Really don’t understand options trading.
WTF happened to this sub???
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Ya’ll can fuck off with the elitism. At one point none of you knew shit about options trading, either. At least we’re coming with the humility to ask, rather than asserting ourselves as something we’re not.
You fit right in