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I bought my very first option today
So I watched this cute twink on Youtube explain what are options and with a very basic understanding, I decided to buy an option contract for SWBI.
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Few things I know so far.
ITM Options as very nice and fluffy
Dont look at any Delta under 35Last edited by onestep; 02-09-2021, 04:05 PM.Comment
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at the risk of repeating myself or being otherwise boring this is probably the most important single page to have bookmarked if youre going to tuck into option-fu:
https://www.optionsprofitcalculator.com/Comment
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http://opcalc.com/ofFOriginally posted by sonatine View Post
This definitely shines a whole lotta light on what I should be expecting. So if it hits $19.90 on Feb 28th, I make $146 bucks or 34% profit once I sell said option. Very much eye opening showing how time decay can even destroy profits of a stock that shoots up.
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by comparison; if you had done a credit spread instead of a straight call:
http://opcalc.com/ogJ
less capital at risk for a higher yield and a much broader cushion against stagnancy / reversals.
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Ironically that's what I learned today. So much info to digest and wrap my head around in short amount of time. Going to rewatch credit spread youtube again tomorrow.Originally posted by sonatine View PostComment
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https://www.youtube.com/watch?v=Me4oVDoGdz8
this channel has some great information on spreads. i really no longer fuck with straight calls / puts, i only do spreads.
like on long term positions they lose a lot of their advantages and they are worthless for scalping, but for weeklies or monthlies they are absolute witchcraft.Comment
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related vaguely; webull and rh dont charge fees for options. in the 5 weeks ive been dicking around with this $600 challenge, ive probably spent more on options fees than ive made in profit.
i think about that a lot.Comment
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Originally posted by sonatine View Post
For a quick flip I can understand your point. But if you're looking at the Firearm/Ammo sector, or the Pot Sector, or even the Electric Vehicle sector which has huge tremendous growth potential throughout 2021 , having long term calls with extrinsic value that wont decay the moment you take a piss, might be good no?
I will def check this out. tyComment
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I've been watching IntheMoney Youtube.
He's pretty cute and is shirtless in one of his vids which is always a plus
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i guess my point is, you can get really significant returns comfortably on historically average stock growth in a month. but as you extend that further into the horizon, its less miraculous.
example:
$ ./net_month.py nflx | tail -1
average percent change: 5.395882352941176 average change amount: 14.792941176470586
ok so lets see what sort of profits we earn on a 5.4% 1 month target:
nflx current price x 1.05 = 587
http://opcalc.com/ogX
tldr expected return on a $630 580/585c march 12 spread is $1360 profit.
so you triple'd your bankroll on something thats statistically going to happen on any month with an average or greater positive gain.
spoiler alert nflx had a batshit crazy earnings surge which fucked up the IV, plus the whole complexion of the market is changing right now so the actual math is more subtle/complex there but hopefully you see what im getting at.Comment
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Im reading it but its just not clicking. Get the 1st part just not the short option. Ill have to circle back to this. Your buying a 580 call and then writing a 585 call. You pay 5760 for one and you receive 5120 for the other, risking 640, to make 1360. However, your profit is capped at 1360. I just dont understand why you'd limit your upside. Is it cause this is the best chance to gtr money without risking losing the entire amount of the option?
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also im very tired and im not sure what my point is.Comment
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im pretty sure jesus was a black man tho.Comment
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