Investment BS Thread - Stocks/Futures/Mutual Funds/Bonds/Commodities/Options/ETFs/401ks/Etc

Can the VXX drop to $28.50 by close tomorrow so my $1.49 $30 puts can wash

 

It's THE best way to dump when you've reached your exit point..You have a $$ you're happy with and don't NEED the cash today...

You can also set up a bear call spread if you think it's going to drop...but have lots (groups, not A LOT OF ) 100 shares to play with. All options are based on 100 shares. So if the premium is $0.50 it's actuall $0.50 x100 shares $50.
An easy one is the selling of a call and the buying of a LONG but much lower put to protect against a loss...When I had 150 shares of DIS and it was rolling in the 140+ pre covid...I would sell the 1 month $150 call (I owned DIS at an avg price of something like 80 and as low as $47 a share) and then buy the $85 put. The call would get like $180 to $200 and the put would cost $30...So if the stock crashed I would still have the right to sell at $85 and make $5x150 shares $650. And if the call exercised (stock over $150) I would have my max profit of 150-80=$70x150=$10,500. Unfortunately I did not have one of these in play when the crash happened because I was on a cruise in mid February and didn't want options in play while I was mostly off grid...Oddly it would have been a great play as the stock hit a low of $79 so the $85 put would have gone from $30 to about $650 in value and the Call sold for $180 would have been worthless...so that play would have netted $830...which could immediately be used to buy another 10 shares...
https://www.investopedia.com/articles/active-trading/030414/what-bear-call-spread.asp

https://brilliant.org/wiki/call-and-put-spreads/

 

that stuff confuses me

 

Yes.

 

There in lies the rub...
It's really not as complex as you think it is and that's why the "Rich get richer"....people don't want you to understand it.
A call is a contract between 2 people, say you and me. I have 100 shares of Tacomaworld Stock (Symbol TCW ) Let's say it's trading at $10 a share so I have 10x100, $1000 in TCW. I think that TCW is going to stay $10 for the foreseeable future. So I decide to sell a call option to...YOU. You think that TCW is going to go UP in value but don't have $1000 sitting around to buy 100 shares...You were reading that Toyota sold a ton of tacomas and you think membership will spike on the site...All you have is $100....Well I am selling the 21SEP20 $10 call for $1.00...You buy that call...For $1.00x100 shares $100.
I SOLD TO OPEN 1 $10 Sep 2020 Call for $100
You BOUGHT TO OPEN 1 $10 Sep 2020 Call for $100
Now you own a contract for 100 shares of TCW @$10 a share expiring 21 of SEP 2020. The reason it costs $100 for something that's technically worth 0 (the right to buy shares at $10 when the shares are already 10) is because of factors like Time and volatility...Let's say TCW stock never fluctuates...it's always trading around $10....the right to buy at $10 is not a very big risk....But if the stock wildly fluctuates from $8 to $12 frequently that right to buy at $10 would be worthless at $8 but 2x the value ($100) if the stock were trading at $12 (because you have the right to buy at $10 and it's trading at $12 and the contract cost $100 you're making $100)
So you hold the contract and we sit and wait and watch...
I'm hoping that no matter what the stock just isn't over $10 on 21 of Sep.
You're waiting for the stock price to rise...because if it goes to $11 in 2 weeks...your contract to buy at $10 is now worth $100...but wait...that's what you already paid for it...aha! It's actually going to be worth about $150....because of TIME...Time and the underlying stock price mostly determine contract prices...
So the contract is now worth $150...You own it. You could say "Hey, I've got a 50% profit here...I want to sell this contract to someone else" So you can SELL TO CLOSE for $150 and make $50....
or I can get nervous that I shouldn't have sold my TCW stock and want to BUY TO CLOSE the contract....

That's how they work...it's a contract to buy or sell 100 shares of a stock at a set price on a set date....and it gives you 100x the buying/selling power...So it's good way to make money on stocks that are to expensive...

BUT IT'S A FANTASTIC WAY TO LOOOOOOOOOOSE money too...
I've taken it on the chin in the past and made money too...
I BOUGHT TO OPEN on June 12 (Because the VXX spiked to $41 that day) 4 $30 July 17, 2020 PUT (the right to sell a stock at a price) contracts for $1.49 ($1.49x100x4=$646) about a month ago...I was shit ass sure that VXX would settle under $30 AT SOME FRIGGEN POINT in that time frame....but it's not going to happen...I have the right to sell at $30 but with the stock at $31+ it will cost me more than the shares are worth to sell at $30 so the PUT is going to expire worthless...If the shares had fallen to $28 I would have the right to sell at $30 and the puts would be worth (with no time value added for simplicity) $200 each after paying $149 each...

But alas...we wave bye bye to that $$$ and hope we can wash it with some profits by tax time...

 

Oooh....wish I had some NFLX puts..
a $500 17JUL20 PUT was $950 today...and is going to be worth about $1500+ by tomorrow....But I don't have the balls to spend that kind of $$$ on PUTS...

 

How did they miss on EPS? They beat on revenue. Tomorrow will be interesting for them. I've got no skin in the game but it'll still be fun to watch.

Oh, and I picked up 3 more NVDA JULY 31 $215 calls today in my play account. That makes 4 total. I just need one classic NVDA run in the next two weeks. I'm pretty sure I'll get it. I hope. lol

 

Wow...that's some $$$...at least they are deep in the money. Do you find you make more buy going so deep or is there no difference in the return if say you bought 4 or 5 $375 31JUL20 calls instead of 1 $215?


Oh and NFLX was down on GUIDANCE for the next quarter...and profits being lower than expected and growth being less than what people thought...It's probably a buy now

 

Nice catch. Did I say $215? Yeah, I meant $415. lol

 

OHHH!!! Ok...I was like..."Wow...that's like $80K worth of options...that's some heavy cash..."

 

Not in the play account. Not yet at least.

Are you still holding NAIL?

 

I like to buy the 1 or 2 month AMD $55 whenever it hit's $50...they seem to always make some $$

 

Going to dip my toe in F...I have an order in for 5 $6 18SEP20 calls for $1.20...we'll see if they hit...can make $100 if it touches $7 in the next few weeks

 

of course MVIS is up another 18% this morning lol, I think I caught that luck someone else in here has

 

JEEBUS! Of all the luck...
Just remember if it was down 30% you'd look like a genius.

 

Well barring an end of day sell off I will lose 100 shares of ABT today at a total price of $98.50 a share...it's trading at $99.50...If I lose them I will have a nice offset of some losses to book the gains...I own long term @$39.72 and will yield a profit of over $5,800 and 150% gain...and I'll sit on that 10K for a few days and see what nature provides...But I will close the option if it dips before close.

 

Mexican standoff market today...Not liking the fact that VXX is literfuckingrally going to be $30 on monday...and not today...almost time to buy my $40 20NOV20 Call for the Election volatility...

 

Flat market for the most part. I picked up a couple SPCE calls this morning. I'll dump them in few and take my 10% and run. Still watching NVDA do nothing. Very uncommon for that stock. Usually it's got big swings to trade in and out on. I might just go take a nap. lol

 

I bought the election insurance 1 $40 20NOV20 VXX call for $500 today...

 

annnndd....I bought a DIS 16OCT20 $110 put for $498....I think it's got a dip coming. The recent rise was on hope and not facts...And the NFLX dip is going to carry over into other streaming markets.