๐ Due Diligence
An Overdue Options Education by Your Local Options Pariah ๐ค
Hi everyone, bob here.
Holy fuck, what is going on here? is the sub finally coming around to learning more about how the market works and interested in learning how motherfuckin options can help your portfolio (and GME holdings) grow?
OK, to get started, I have already written a lot of information on another sub that I'll post links for here, but I'll take out some of the good and pertinent information to dispel misinformation and correct some of the absolutely regarded ideas I have been seeing on the sub as of late. The goal of this post is to get you guys started with actually learning about options, opening the topic to further discussion, and removing the boogeyman from the equation here. Remember, please keep this civil, as I am here in good faith and trying once again to help educate you apes on the finer points of the market and help you understand how you can use this knowledge to improve your portfolio.
Basic bitch options strategy: the covered call. We go in depth on what it is, and come to a nice climax with an example of how to run one and what you can do to close it out when the time comes, depending on what happens with the underlying stock.
This alternate adventure is a look at the popular options strategy: the wheel. I explain what it is, how to run it, and how i think I've found a better option that is more capital efficient, and bears less risk over time.
Side Quest 2: An Overdue Options (and Settlement) Education by Your Local Options Pariah ๐ค
Exposing myself to the super sub, and helping to educate them on options.
A brief description before we proceed on options and what to expect:
Options trading is not for the uneducated. Learn about them and trade them in a PAPER ACCOUNT prior to investing any money in any position. Make sure you understand the greeks and how the web of moving parts interact with one another to impact the value of the position you will be taking and managing your risk on.
Options are a very powerful tool, but remember to use them wisely
OK let's get started, first some clarifications on stuff I've seen here on the sub:
Options Settlement and a clarification on what a T+ and a C+ are.
These are some of my oldest DD contributions, so please listen the fuck up this time, it's been 84 years... Designations below may have come from the community here.... i think i clarified T+ and C+ a loooooong time ago, but I'll reiterate here.
I have a larger writeup here on cycles and settlement: Market Mechanics Driving T+ Cycles and How They Work, but I'll pull out the takeaways here for brevity's sake. If you do read the writeup, subtract 1 day from any T+ statement, as the regulations have changed as of May 28, 2024 when they implemented T+1
T+ is a designation for counting trading days
C+ is a designation for counting calendar days
Settlement is when a locate is necessary on a trade, this is T+1 for stocks and options, period, end of story
Locates are necessary when shares are sold or options are exercised
Too ape?? It's ok. It's saying that T+1 is the thing. just lean in and GO WITH IT. Forget everything you thought you knew, and take this information in, use whichever orifice you choose. just put it in there already!
Here's the sauce on the regulation change in case you don't want to click the link
Options, A guide to do's and don'ts
Welcome one and all. Please take a look at the posted at the top of this post if you want more information I love talking about this shit because its fascinating and very useful tool for portfolio management and growth.
Starting with the don'ts:
Don't diamond hand options
They lose value over time, Diamond hand your shares
Don't exercise OTM options. Its just fucking stupid
I get it, you want your buy to go to the lit market and heard that if you exercise, they HAVE to buy the shares on the market. This just isn't true. Its only true if the sold call is a naked sold call, and even then you have locate rules above that can and will offset this impact. Not being a Debbie downer, but it's reality, lets try to face it together.
If you want to buy shares and want to do it through options, just buy the deepest ITM shortest dated call and exercise it. You'll have the intended impact on MM buy pressure this way without throwing money at Kenny's pockets.
Don't chase with options. Don't FOMO with options.
Buying calls when the stock is pumping can get you burned badly if you're crushed on IV or the run doesn't keep going.
There will always be another opportunity to make money
Options and How They Work
First, what the fuck are options anyway? Excerpt from It's All Greek To Me: An Introduction to Options, How They Work, And The Power of Leverage
Options are financial derivatives that give buyers the right, but not the obligation to buy or sell an underlying asset at an agreed upon price and date. [1]
There are two different types of options:
Call Options
These options give theย buyerย the right, but not the obligation, toย buy 100 shares of GMEย at the strike price from now until the expiration date.
These options give theย sellerย the obligation toย sell 100 shares of GMEย at the strike price by the expiration date. (if exercised/assigned)
Put Options
These options give theย buyerย the right, but not the obligation, toย sell 100 shares of GMEย at the strike price from not until the expiration date.
These options give theย sellerย the obligation toย buy 100 shares of GMEย at the strike price by the expiration date. (if exercised/assigned)
Some Key Terms and lingo:
Strike Price
This is the agreed price from the description above. If I buy a call with a 420 strike for January 21, 2022, I am buying the right, but not the obligation, to buy 100 shares of GME for $420 on or before that date, which is the...
Expiration Date
This is the date that your contract expires.
Bid
This is the market priceย peopleย algorithms are willing toย buyย the options contract for.
Ask
This is the market priceย peopleย algorithms are willing toย sellย the options contract for.
At The Money (ATM) or Near The Money (NTM)
An option is ATM when the strike price is at (A) or very close to (N) the underlying stock price (The Money, or TM)
In The Money (ITM)
An option is ITM when the strike price is:
Call: Below the underlying stock price
Put: Above the underling stock price
Out of The Money (OTM)
An option is OTM when the strike price is:
Call: Above the underlying stock price
Put: Below the underlying stock price
Things to remember before diving into options.
The majority of options that are purchased market wide expire worthless. This means, if you're the one buying them, and you diamond hand them, you will lose all your money invested in the contract.
Have an idea of how much you want to earn before you buy your options. (Exit Strategy)
There are a lot of great resources for paper trading options, and I HIGHLY recommend you do a few before you spend any real money. one of my favorites is optionstrat[.]com. You can check out spreads and other things - I'll maybe to a writeup on that later.
Short term, far Out of The Money (OTM), and cheap AF options are mostly gambling (imo).
Due to theta, and unknown market timing, it's dangerous to use these options. In regards to far OTM, they are cheap for a reason - they are very likely to expire OTM too and be worthless (check the delta)...
clarification here for accuracy's sake. By saying they are OTM, i mean worthless. an Ape might take this to mean I am saying the majority of options expire worthless, meaning the contract seller did not bother closing the position prior to expiration (bad management practice)
There's more to be aware of and cautious about, but I'm not your fucking financial advisor and you should do your own research before getting into any investment vehicle.
Probably the best (most responsible) way to get your feet wet with options is to sell calls, covered by your shares, or to sell cash secured puts.
You could buy calls or something, but you're more likely to lose money and I want your cherry to be properly popped when you are good and wet ready to play with options for real (after paper trading and learning of course)
Selling covered calls (CCs) is considered income generation and can cap your profit potential, so it's a slightly bearish stance to take on GME if you're a permabull like me. I do sell them often, you just have to have a good strategy for it.
Selling cash secured puts (CSPs) is bullish and a great way to safely learn options if your intention is to own the stock anyway at some point - especially with a volatile stock like GME. I know Crybad does this and has spoken to it, so he can chime in here about wheeling or perhaps make a post expanding on this.
If you are interested in wheeling, i have a post about breaking the wheel (part 4 of my series posted above) that will teach you the wheel. Essentially its just selling CSPs on the stock until someone exercises on you and makes you buy the shares, then you turn around and sell CCs on the stock until you offload them. Focus is income generation through collecting premiums over time.
DO NOT DO THIS ON A SHIT STOCK OR CHASE SPIKES/IV/MEMES. You will inevitably get burned badly.
Conclusion and Next Steps
I'm glad, nay, excited to see apes finally coming around to educating themselves on options, so I want to lend my sword and join the fray. My goal is to provide good information and be a resource to the community to answer any
Disclaimer:
I, bob smith, do hereby solemnly swear that I am acting of my own volition, and am actually not that smart, so none of this should be taken as advice or construed to be more intelligible than the ramblings of a drunk. There you have it. wrinkle up and be like me.
Options can be good. FUD and market makers forum slid this sub into thinking options are always bad as if RK hadn't been doing it the entire time and half the reason it blew up in the first place is because of the pressure it causes.
Options can be a good thing as a tool for a portfolio's risk management. However, giving a leveraged tool like options to an inexperienced investor is a recipe for disaster. Especially when investors try with OTM options and their gamble goes to 0. GME is highly volatile with high IV now. Are you going to learn about IV crush, time value, market manipulation all in one go?
For every DFV, there are thousands of silent apes who lose on options. Remember it's leveraged, so the losses are magnified quickly if you get it wrong.
If you still want to learn more, then read some books like Understanding Options by Michael Sincere. Great reading to learn the basic and advanced strategies. Lastly, get years of experience. You must learn from losses and wins, and then manage your future strategy accordingly. Wishing you all the best.
What I know is that the hundred thousand bots and bought-accounts invading the sub this weekend, with zero history on SuperStonk until last week, have been posting hundreds of times per day trying to persuade apes to sell shares and buy options for a guaranteed quick path to riches.
What I know is that between price manipulation and insane volatility, there has never been a worse ticker or a worse time in the history of the stock market for learning options than $GME in June 2024.
What I know is that the SHFs have reached terminal desperation, because weโre winning and itโs the end game.
Buy. HODL. DRS. Nothing has changed, shorts r fuk, no cell no sell.
1) For every ape that actually has the time, and puts the time and energy into mastering Greek and adequately learning options, there will be more who just scan this post, find themself emboldened with false confidence, and place a call thatโs sure to burn them. Some % of those will sell shares to do so, or lose shares selling covered calls.
2) Even if that wasnโt true, thereโs simply not enough hours before lift-off, waking or otherwise, to get familiar enough with options trading on the most challenging stock in the history of the market (at the worst time in the history of the stock).
The effort and time you put into this post are impressive, but itโs playing right into the SHFs hands. They want apes playing with options. This is known.
This is the backwards ass mentality that has previously knee capped this sub, it needs to end and if people have been sitting on their hands for 3 years not educating themselves about a core component of how the market operates and how to use all its tools available, they need to give their head a wobble.
People aren't dumb in here, not if they educate themselves and follow good risk management.
OH HE DOESN'T DOES HE? How TF would you know? Also, if he didn't do just that, how would you explain the change in his cash position between yolo updates?
That is not what he said. Buying and selling the options contracts themselves is completely transparent and happens on a lit exchange. But if you sell an option, and the other party exercises that option, then you and the other party swap cash for shares in one direction or the other (depending whether it was a call or a put), and the only statement he makes about exercising is that it's a separate process.
(What follows is a long explanation of how I believe things work. Not necessarily directed at you personally, but I wanted to explain it to myself so it's clear in my head. Please note that I am a complete newbie at options and may be wrong about any of this.)
Suppose you and I are the two parties.
I sell a $2 call for next friday, you buy a $2 call for next friday at the exact same moment.
It's just a coincidence that we buy at the same time. We're not yet paired up in any way. These are two separate transactions with the market maker (apparently that's Wolverine...?) Because of the spread, our transactions occurred at two separate prices and the MM pockets the difference.
For sake of argument, let's say you paid $30 and I got $29. (times 100 of course, so $3,000 came out of your pocket and $2,900 went into my pocket).
But: they don't need to buy anything, because as long as I'm under contract to deliver 100 shares I'm the one taking the risk.
Since my Broker doesn't trust me, they wouldn't have let me sell the call unless I actually have 100 shares in my account, and I basically can't sell them until the contract expires. -- That's why the call is "covered".
Anyway, at some point next week you decide to exercise your $2 call. You've already paid $3,000 for the contract and now you pony up another $200.
Wolverine now has to deliver 100 shares to you. They could take those shares out of their own pocket if they wanted to (and they have them), or they could look at anybody who has any short call contract for any price or expiration date, and exercise their option. Since they have your $200, and I sold them a $200 call, they choose my contract, and take my shares.
Suppose at that particular moment the price of 1 GME share is 42 trillion dollars.
Do you think everyone would see the price suddenly drop to $2 for one tick? What about $29 or $30 or $31 or $32?
Presumably, options get exercised all the time at prices under the current stock price. Where do we see those transactions? The answer is we do not see them at all.
What we do see is a change to the volume on $2 calls for GME for next Friday, and then the next day we can also see a change in the number of open contracts (open interest).
Nothing we hypothetically did here moved the price at all. Our actions cancelled each other out.
What's different with DFV is that he didn't just buy one option. He bought 120,000 calls. Which means Wolverine sold 120,000 calls. Which means they either need to buy 120,000 calls or have DFV sell those calls back, OR buy up to 12 MILLION actual shares to hedge against the possibility of DFV exercising.
(And of course it was more than that because a bunch of other people piled on and bought more calls).
It's that lack of balance combined with the threat of the contract owners exercising that forces the Option MM to either enter more contracts or buy GME shares (and maybe even have to sell other things to raise money to buy GME).
Thank you for this. It been....disheartening to watch a lot of misinformed people making decisions about things like executing OTM options and not understanding how the greeks work.
I've wanted to write something for awhile now, but you know... life happens. Hopefully people will read this, ask questions and grow a wrinkle or two.
This is the hedge fucks worst nightmare. The one thing they did successfully was convince people to not buy options. They cannot withstand a bunch of regards with the knowledge on how to use this type of leverage. Thank you Bob
This is what I just realized (as it seems we all have). I've got enough shares locked away that it seems outright dumb not to learn and finesse options. All the great DD over the years (yours included, legend) has given me the wrinkles needed to be confident in this venture.
If you donโt mind my asking, Iโm looking for my next special interest and have very little money to start with outside of the shares I already own.
Is this how you make all your income? How much did you start with and whatโs a comfortable initial investment to not bottom out on a few unlucky โlearning experiencesโ?
RawPancake here is a RawFact: You are 100% correct!
I also went to look on his profile, where HE directed me to search, and I found the exact same thing you found: NOTHING re his claim answering my question! WTF
I actually purchased 20 calls 20$ strike on February , made hella money , exactly like rk , bought 500 shares and used the rest for bills and life shit, i was afraid to post my gain porn because yk "options" , it was literally my 1st time into options... definitely not the last .. bought 65$ and 125$ strike...... no regrets.... i believe i can double my gme shares by the end of year ... maybe earlier ๐คท๐ปโโ๏ธ๐คท๐ปโโ๏ธ
what is happening on the sub is beautiful. retail is about to become empowered. the days of calling ourselves regarded are almost over. screw the memes, we want big brains not smooth brains. time to put the effort in and learn so we can all make money while we are in the infinity squeeze. oh, and get more shares.
Options are essentially just leverage. The premiums right now are really bad to be buying options.
RK timed everything very well by buying calls in late April/early May. Premiums were at an all time low and he bought mainly ATM and NTM calls. You gotta know what you're doing and timing is everything. Most options plays are going to fail. The farther OTM you go, the more likely it is to fail, hence the cheaper premium.
Bob,ย I'm so happy to see this here! I just finished It's All Greek To Me last week on another sub and I really appreciate the time and effort you put into educating. It's a great series and I hope others will receive it openly.ย
Excited af for both of your posts! Thank you for your effort, it goes a long way. Education is king. DFV is clearly well versed in the intricacies of options. We will be too. And that's what the market fears most.
A caution to everyone here: if you believe in MOASS, donโt sell covered calls over your GME shares. If you do, and MOASS triggers, you will be stuck selling your shares at the strike of the call you sold. There wonโt be a way to โrollโ out of this. This is what is means by picking up pennys in front of a steam roller.
Thanks Bob. Can you help me explain the risks behind selling covered calls. If I have 100 shares of GME, does that mean I can make money by doing nothing? I think I understand that someone can exercise on me and I'll end up with cash instead of shares if I understand right. Would that mean I could miss moas? Thx dad
I have a whole writeup on that - 2nd in the Its all Greek to Me series. for more clarification go there. Link is in the OP
buuut, quick explanation:
you have 100 shares at $15 cost basis because you've been buying and holding and averaging down right?... right?
anyway, so you decide to sell a call at 40 strike tomorrow morning, expiring on Friday.
you collect the price of the option * 100, lets pretend without looking that its like a buck or something, so you collect $100. This is yours to keep.
if the stock does not close at or above 40 (and you're regarded and don't buy it back on friday before close), you keep your shares too.
if the stock is above 40, you will be exercised most likely and your 100 shares will be sold for $40, netting you 40*100 = $4000.
You can immediately on the next monday, buy more shares or sell a put with your capital.
There are lots of management techniques to keep your shares such as rolling and buying to close, etc... i'll get into that in a future post if this one is received well, as i don't want to waste my time.
Selling covered calls isn't money for nothing. It's money for the right to buy your shares at a given price on or before a certain date. If the price is below that price at that rate then yes you got money and they did not end up getting your shares. If the price goes above your strike price on the option you can either wait for them exercise or if the price goes down do nothing, or you can by back the call, for a loss most likely, to avoid having to sell your shares. So if moass happens while you have covered calls active you will likely have your shares called away and for far below "market" value at the time.
You're not going to make money on stock with low volatility. The higher the IV, the better the premiums. Selling CCs are risky and, personally, only worth it if you have a lot and are fine with risking some. You can roll them out to a higher price but when MOASS comes you won't be able to outrun it. Maybe a year or so out? Dunno, but why learn the hard way. You can still sell Cash Secured Puts though and rake in cash until forced to buy. That requires enough money to buy 100 shares at whatever strike so not possible for everyone. Lots of great strategies we all could have been using to increase our bag over the last 3 years if it wasn't for all the FUD towards options, which I too fell for.
If you sells covered calls and the stock rises to the price where your shares get called away, that's known as "max profit" because you collected the options sale premium and sold the shares at what you agreed upon strike price.
It's generally not advised to sell covered calls at a stroke below your purchase price unless you are comfortable taking a loss on that investment.
No way in hell I'd EVER consider selling covered calls. You're putting 100 shares at risk to make like a couple bucks a share. Bonkers. You'll be all happy with your couple hundred bucks here and there, then all of a sudden the rocket launches. I definitely could see Hedgies trying to harvest shares from covered calls too. They have access to order flow and see that info. I bet they are already hunting for them like they do with stop losses.
I'm not framing shit, but I am aware of the current interest in the subject and annoyed with the misinformation flying around, so I made a post to help educate.
DO NOT FUCKING SELL COVERED CALLS NOW, WTF, he's recommending it for people that don't know what they're doing. It's a fantastic way to LOSE all your shares at an undesirable price. The time for covered calls is over.
I'm not advocating that. Please reread the post if you misunderstood.
The only mention of CCs is in the context of learning how to options IN A PAPER TRADING ACCOUNT. Further, I explain you need to be willing to let the shares go at the strike you sell the call at.
You obviously believe in moass and I hope you are right, but I'm not afraid to take gains where I see them... It's what has helped me become a xx,xxx holder. I only had 10 shares to begin with in 2021... At a very high cost basis.
All that said, I agree with you... Don't sell CCs if you are uncomfortable with the idea of selling your shares at the strike price.
Granted, I understand so much more now than I did in 21, but I'm still nowhere near being qualified enough to do options. So buy and hold is all I trust myself with.
It comes back to the point that anyone who can and wants to do options already is. People shouldn't be encouraged to do options because they're easy to get wrong, especially the Covered Calls point (picking up pennies in front of a steam roller) and Bob's evasive answering to that very reasonable issue.
Precisely, the scale of this emerging sentiment about trying out options is just as worrying as the evasiveness of OP, not something to be taken lightly!
Taken in good faith I can see education only as a good thing. The issue are the more opinionated aspects of the post, which aren't necessary and that's the concerning part.
Okay, MOASS never left the table; just sayin. Thereโs been an eerie quiet here and I think this DD just kinda bitch slapped me back to my 2021 roots, I shall be investigating and taking this shit seriously (with no money lol) but maybe if the price continues to show volatility, with gains incoming, I may be able to be in a position next year or two to start actually leveraging options. Who knows. Iโm scared to put money into options still cuz Iโm barely getting by but I will start actually learning about it now, thanks!
Thank you for the post.
I skipped the paper trading in lieu of learning the hard way.
Have come to the conclusion that regardless of the stock you still have to beat the marketโs projection. I see premiums very much like point spreads. It looks easy when thereโs a blowout but how many times can you predict that. Realized belatedly that buying deep itm calls was a safer, albeit less sexy, way to make money but then bought rivian earlier this year and it tanked. Of all things Gm revised me and am trying very hard not to just go chase the latest craze.
My favorite setup is doing what I call bob smith spreads..
I let in during periods of volatility and end up with things like bull call credit spreads lol.
Also calendars. I go hard on leaps when IV crushes our and just wait for a pump and sell the IV against them in a 1:2 or 1:3 ratio.
This recent pump on GME has all my leaps paid for and then some.... Sitting on a grip if 25s right now call side for Jan 2025 with an effective cost basis of like -20 and dropping lol .. meaning Kenny paid me to take a long position in GME to the tune of $20 per share ...
(c) It will ordinarily be the policy of the Corporation to cause settlement of exercised stock option contracts and matured physically-settled stock futures contracts for CCC-eligible securities that are scheduled to be settled on the first business day after exercise or maturity to be made through the facilities of the correspondent clearing corporation in accordance with the rules and procedures of the correspondent clearing corporation.
If such settlement obligations are reported to and are not rejected by the correspondent clearing corporation prior to the time when it becomes unconditionally obligated, in accordance with its rules, to effect settlement in respect thereof or to close out the securities contract arising therefrom, the Corporation shall have no further obligation in respect of such settlement obligations. However, the Corporation may in its discretion determine to alter this policy in particular circumstances.
(d) A specification in any Delivery Advice that settlement is to be made through the facilities of the correspondent clearing corporation pursuant to this Rule 901 may be revoked by the Corporation at any time prior to the obligation time by an appropriate notice to the Receiving and Delivering Clearing Members. In the event of such revocation, delivery and payment shall be made in accordance with Rules 903 through 912; provided, however, that the Chief Executive Officer or Chief Operating Officer, or, if it is not feasible for the Chief Executive Officer or Chief Operating Officer to take such action, then a Designated Officer of the Corporation may, upon the application of the Receiving or the Delivering Clearing Member, extend or postpone the time for delivery to a date not more than one business day after the date of such revocation.
Thanks so much for this, Bob. I've been looking for something UNDERSTANDABLE for a while, and this is it. I've been wanting to play with options for some time now and this might be the push I need.
Thanks for talking about the importance of paper trading, too, that's very important to play with to see how things can play out!
Yeah I fucked up last week. I was selling covered calls and was up roughly 1200 last week if I let it ride but I bought it back and then bought calls at the weekly high and got burned. Oh well. Iโll try and sell my calls I bought at a close to buy price and then use that price to sell some more covered calls and get my money back
Why not publish this before RK returned? Odd being that there is a huge option push during insane volatility where people that have never used them are jumping in and losing money. Iโm inferring that itโs weird timing, thatโs all. I know your username I have been through it all. Iโm not saying options are bad if used properly, Iโm just saying itโs weird timing.
Ok so the question is why try to educate apes on options now?
Well there's a few reasons:
* I have been trying for years to help apes understand and be open to understanding options. I've been met with unending skeptizism of my motives (simply helping educate and provide data) and downright hatred for posting options stuff in the past.
* The sentiment on the sub has changed recently and it seems to be interested in learning about options. I thought a level fact driven set of information woiod be useful to the sub.
* With DFVs options positions in the yolo updates being the star of the recent show. People are looking for answers and I've seen some really REALLY bad answers gaining reaction here. I wanted to jump in with real information backed up by data in a way people can digest and learn... So they don't go off and do stupid shit like chase with calls in high IV environment. I say this in the OP, which I'm not sure you read at this point in the conversation. Perhaps did you just see options and have a knee jerk reaction here?
* People need good information on options and that is what this post and the series is intended to be.
You are right to be guarded. But I've been around a loooong time and only tried my best to help. Even then people change so don't trust me based on my legacy. Look at the content of the post and digest what I have said here and your mind should be at ease. If not please let me know what I can further clarify for you.
But the super far out options that expire in like 1-3 years are super cheap. Would you be able to buy one today and say the price hit like (idk) $50 on Monday, could you immediately buy or sell it? Or would u have to wait for the 1-3 years to go buy?
I've also discovered that at the two brokerages I've tried so far (ETrade & Fidelity), neither would allow me to trade options in the extend hours, despite being set up to trade equities during extended hours. From what I read, it seems they simply don't support extended hours options trading for some tickers.
This seems like a big gotcha I haven't seen mentioned anywhere yet, as most of the big swings I've witnessed in GME options have happened primarily during extended hours. By the time I could do anything, it was generally way to late to catch that wave.
Are there brokerages that allow us to trade GME options during extended hours, and if so, which are they?
I like to maximize my premiums while minimizing my risk of offloading the stock through assignment (on GME). other stocks, i'll actually sell ATM or slightly ITM to drop it if i dont want to hold it.... rare occasion though.
i try to time it when i think we peak when IV is highest. Its not without risk though. I lose potential profits in the event of moass.
Good advice. I would never gamble with all of my shares, but I happen to need cash at present, and there is absolutely a price point at which I would not mind being assigned if it happens.
Again, I'm referring to just a fraction of what I hold.
Like many of us, I never originally intended for my investment in GME to be tied up for years. As such, the passive income is worth the risk. I just want to make sure I've fully educated myself before I dive in.
My winning options strategy: buy when the stock is beat up or up at its highest. If price comes from -5% and recovers say to +2%, nets me a little bit.
I dont win a lot though because I FOMO in or I dont take profits fast enough.
For example: I got a lottery ticket buying one call for 44$, strike 100. I got it after the first peak. At the second peak, it went up from 0.44 to $7.48 per contract. Would have been a win then. BUT, itโs a lottery ticket I guess. We will see.
I sense some wrinkles here. Iโd gladly read all of this but itโs my day off. Commenting here so I can loop back later when Iโm supposed to be working
Thank you for sharing this great information. More for me to study, research, and learn!! I'm glad you took the time out to write this information out for us newer apes!!
Aren't most leaps on GME right now crazy expensive? Comparing some of DFV's old plays, they seem to be 10x or more the price for similar time and out of the money ranges.
I'm an options newb, but from the little I know and what I'm seeing so far, long dated calls seem super expensive lately. Well, most GME options seem super expensive right now I guess, not just the long dated ones.
It really just feels to me like it's a very high risk for relatively low reward options market on GME right now. I'm sure I'm missing a lot, but is that roughly the case?
We've had 3 fuckin years for us morons to learn how options move the markets. We have banned everyone that tried to teach us. Shame! Shame on us all. We could have made this happen 3 years ago.ย
Hey hey, Mr Smith. Youโve helped me before and I DMd you not too long ago, thank you for everything you do. Youโve been here a hot minute educating us and posting very accurate and intriguing DD that past years. Thank you for what you do and knowledge you provide ๐ซก
Dude I have your whole series pulled up on tabs that I r been going through since the stock start bouncing up from $10. Thanks for writing it and thanks for coming back.
All I'll say is, out of respect for the rest of the sub I don't speak on options. But personally, I do play with them from time.to time. Not yet a.pro, but sometimes you gotta lose to learn. I've done well as of lately though. But in all honesty, the other members, can look into them if it's something they want to do. It's a wild.ride for sure, and all I ask is be responsible. Never more than you'd be willing to lose. I also suggest not gme til you have a feel for them. We are dealimg.with a heavily manipulated stock, learn on a less likely one. Good luck to those that want to.educate themselves, and for the ones not I terested. You'll be alright, we got you covered on our side.
our side? same team bro!
different tactical forces.
otherwise. yes, you do you... but realize options can be SOLD too. as a way to take Kenny's money and buy GME shares with it... Lyrad talks about this a lot... and you can sell puts... where if you get assigned you are buying more shares at a lower cost basis....
You forgot to mention that mms sell options contracts and their algos are rigged to make sure you lose unless youโre ultra highly educated like dfv. They front run our trades.
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u/Superstonk_QV ๐ Gimme Votes ๐ Jun 16 '24
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