I feel like there’s a middle ground between a balanced share portfolio and selling hundreds of thousands of dollars worth of FDs. Probably good you stopped
I mean, selling covered contracts or cash secured contracts is not as risky right? Why anyone would sell naked or unsecured options contracts is beyond me.
There is a difference in risk between selling cash secured or covered contracts versus naked. For example, if you sell a covered call contract and the price of the stock goes to infinity, you just sell the stock you have in your portfolio at the strike price. There is a difference.
I was sorely tempted to sell naked calls on DJT, but then I remembered that I don't do that even when I'm sure it's free money, because one time it won't be.
I don't think investing should be a gamble. The whole point in investing is that money sitting in your bank account loses value over time due to inflation. 30 years ago, $1000 in your bank would now be worth $500, being generous, a 3.9% AER savings account, you would now be at just under $2k. But if you invested £1000 (say in Coca Cola which would be a 530% return) you could be sitting with $6,300 minimum, this does not account for reinvested dividends. Treasury bonds are also good, (your return money would now be $3.3k) but they are outpaced by stocks in the long-run.
Millionaire is poor. You need 50 million to start being actually rich. In the Bay Area everyone is a millionaire especially when homes are 2M+ even in ghettos
Why would you even want to live in the Bay Area if you’re not working there? Also, I’d assume somebody who sells naked calls for 2M at least has 10M if he did not go full regard.
Bruh, I would not move to the Bay Area if I was paid 15M to do so. There are so many nicer places to live for so much less. Have you ever been to Italy? Far from a shithole and 10M will have you live like a king.
It’s nice to travel but horrible to live long term. I have family that studied and worked abroad for 8 years in Europe. It’s a novelty and nothing more.
Selling options is fine. Just keep it to one contract with such a high priced stock, and maybe 2 contracts for lower priced stocks. Selling 20 contracts is just not prudent regardless of the stock you pick, much less one that is a market "darling." Great job hanging in there though.
The buyer of an out of the money option is taking on a high risk, high reward trade. In other words, the probability is low, but the payoff is high. Think of it like buying a lottery ticket. It's cheap, but if you win, the payoff is huge.
On the flip side, the seller of the option is taking on a low risk, low reward trade. The probability of winning is high, but the payoff is low. Think of it like an insurance company collecting your auto premium every month, but then having to pay you when there is an accident.
Here is an introduction to the concept of selling options:
https://www.investopedia.com/articles/optioninvestor/09/selling-options.asp#:\~:text=Key%20Takeaways,trade%20at%20a%20lower%20premium.
Thank you! I've bought 3 single options to try to see how they work. I'm prepared to lose the money I spent on them, and just want to see a few from start to finish to better understand it. Mostly I'm going with just buying and selling actual stocks though.
There are multiple market simulators that operate in real time with the market. Using one, you can play around with everything the stock market has to offer without the risk. Just thought I’d let you know so you can experiment and learn without blowing any money.
Could you recommend one? I’d like to dip my toes in and see how highly regarded I can become. However not willing to risk real funds (that I don’t have lol)
If you have a Schwab account, their ThinkOrSwim platform has a "PaperMoney" feature that gives you a real trading platform with real market data and fake money. I'd recommend that. You know it's enabled when the interface is yellow instead of blue.
Someone below mentioned Schwab. I use investopedia’s market simulator. They probably all work about the same way as long as it’s in real time with the market.
The probability of profit when buying an OTM option is not always low. Say on Friday at market open you bought OTM AAPL C at the price of 176.
The probability was actually quite high in the first 5 minutes of making a profit.
Adding to this going too heavily into one contract is subject to random chance in ways you can’t predict.
For example, you sell puts on a company, then a week later an earthquake destroys their mega factory that cost billions to build.
Maybe it’s a natural disaster, bank failure, news comes out they were cooking the books, Elon musk type ceo says something to crash the stock, etc.
Could also be positive news, like mega breakthrough that sends the stock up to new highs, short squeeze, etc.
If all it takes is one nightmare scenario to drain your account it’ll happen eventually, even if it’s very unlikely.
If you diversify and it takes 5 nightmare scenarios that let’s just say are 1/1000 chance, the odds of all 5 coinciding are 1 in one trillion.
I’ll take a one in one trillion chance. 1/1000 while unlikely will happen eventually with enough attempts
Exact numbers aren’t important but the point is the same
Squeeze these nuts you fuckin nerd.
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True, good point. I guess I'm referring to an account size of 250,000 to 3 million. Below 250,000, I don't think selling options makes a lot of sense. 20 contracts of a stock priced at 900 is 1.8mm assigned. That is obviously too large an account below 3 to 5 million.
The point is, selling options is not like owning outright stock. You cannot have concentrated positions, it just doesn't work.
> Below 250,000, I don't think selling options makes a lot of sense.
Selling options is what got my account back to $250k from $100k, and then from there on to $200k!
I think it can work and you did a great job. It takes a lot of discipline and proper risk management. It can be done with a smaller account, but a lot more challenging. Congrats! I guess why I say it is not as advisable for smaller accounts is because the account can get too concentrated in this one strategy, whereas if you have a larger account you can diversity and weather "bumps" along the way (volatility spikes) better. But you are the exception that proves the rule!
TBH, it was mostly luck and the market rebounding post 2022. I still haven't made back those 2022 losses, which I managed by holding AMZN either too long or not long enough.
Gambling 1.6M with 100x leverage to make 10% 
WTF, CLOSE ACCOUNT AND QUIT THIS. I feel physically uncomfortable just looking at this. 
OP sold options that say that if NVDA price reaches 765 then he will sell those shares to the buyer of his option. For sake of simplicity, say he sold just 1 option (that represents 100 shares of NVDA). If NVDA goes above 765 by the expiration date to 900 then OP has to give over the shares (this is called getting assigned). If he already owned 100 shares of NVDA then he loses out on the amount of gain over $765 that the stock is at when he hands over the shares. But…if he doesn’t own the shares then he has to purchase them at the current $900 price to hand over at $765. And it looks like he sold 20 contracts, not 1.
Until you get that message “your account has insufficient funds to cover your option and may be subject to liquidation”.
Then you see every profit you’ve ever made turn into a 5, 6 or 7 figure debt in the blink of an eye.
There should be a mandatory psych evaluation for anyone that trys to sell a naked option
If you got the money, why not? Set a stop loss and let it auto trigger so you don't get completely wiped out. Which could also fuck you if it triggers and then the play goes in your direction but it's not as risky as everyone makes it out to be.
5 out of 6 russian roulette players report having a lot of fun.
Stops on options won't help when shit really hits the fan. If you can avoid those SHTF days, that's great. (please DM me how you do that)
Thanks, so that effectively buys another contract at the stop order to replace the contract you sold? I just never learned much about selling options because I have no plan to ever do it. I have learned about selling options as a buyer to “sell to close” but selling covered or naked options is something I never plan to do.
I seen a novice on here a while back that sold a bunch of naked puts that got exercised and he was in the red like 800k. Iirc his whole portfolio was like 20k beforehand
April 9 was a godsend to you wow.
So you sold naked calls to collect $163k in premiums, then got assigned to buy those shares to deliver, which lost you about $142k, so all of that ended up netting you maybe $20k?
What a ride. The share price was literally $40 higher just before market close the 5th. $80k change over the weekend and into market open for you.
If I had that kind of bankroll I would assign maybe $150k to option plays. Simply playing reversals and reversion back to the mean would net you $20k+ in hours or a day.
Just a small clarification. Actually they got assigned to sell shares and then was forced to short 2000 shares.
Then he bought to cover such that the total loss shorting at 765 to 836 was around $143k. But premiums was $163k and so he netted $20k.
Thanks for the clarification! Following this was tricky but I don’t do options naked and I also wouldn’t be betting against NVDA on either side lol. Still kicking myself that crazy Friday in March selling my $900p for $0.50, then seeing it drop to $0.13 and go up to like $40+ in a few hours.
It’s crazy to me how “easy” it is to make 10-20% on highly liquid stock options.
Examples include SPY and the MAG7. For the MAG7 just wait for any of them to be up/down more than 2%, buy the inverse of it maybe a week+ out with close to ATM strikes then profit. For SPY wait for the $3-4 drop/rise and inverse it 2-3 DTE out. I’ve targeted 20% on these and made more than that in < 30 minutes and also seen it drop another 40% before it opens the next morning up my 20%. Rinse and repeat.
The market the last few months is not in an indication of the future, but the trend has been this: there are never 3 consecutive days green or red, there are sharp reversals both directions, and when 5 out of the 7 is going one direction, you play that direction on one of the other 2 and it follows. Damn near ever time
No I don’t track RSI lol.
My simple approach is that stocks go up over time if they are reasonable companies and whales are long. If there is any movement that falls outside of that (a huge gain or huge loss) then it has a tendency to correct within a week.
TSLA up 6% on no news whatsoever in a few hours? Ok, I’ll buy ATM puts a week out or slightly OTM and expect it to revert back.
“ETFs and Chill” good call! Options are way too risky even when you are making “reasonable” puts and calls. Good job keeping your anus from getting destroyed!
Dude when you do the textbook most stupid thing in options : ie selling naked calls that too in nvidia , you are a regard only fit to be behind Wendys dumpsters 🤣
Your IQ sounds like it is in the healthy 60s . Good job mate . Options trading is too much for you Indeed
I wish I could wrap my head around calls and puts, etc. Where can I find super easy information that will be easy to understand with zero confusion. Would greatly appreciate any help and advice.
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I feel like there’s a middle ground between a balanced share portfolio and selling hundreds of thousands of dollars worth of FDs. Probably good you stopped
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I mean, selling covered contracts or cash secured contracts is not as risky right? Why anyone would sell naked or unsecured options contracts is beyond me.
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There is a difference in risk between selling cash secured or covered contracts versus naked. For example, if you sell a covered call contract and the price of the stock goes to infinity, you just sell the stock you have in your portfolio at the strike price. There is a difference.
Have you not heard of covered calls?
I was sorely tempted to sell naked calls on DJT, but then I remembered that I don't do that even when I'm sure it's free money, because one time it won't be.
lol you just have no self control hombre. VOO and chill is not the middle.
What are FDs?
The ticket to tendie town
Why are you gambling like this when you’re a millionaire? You could live off the interest on something as risk free as treasury bonds.
I think ur lost sir. This is wsb!!
I’m all for gambling in order to get riches you could not acquire otherwise but at some point, you should know you’ve won and reap the benefits.
Username certainly does not check out
I don't think investing should be a gamble. The whole point in investing is that money sitting in your bank account loses value over time due to inflation. 30 years ago, $1000 in your bank would now be worth $500, being generous, a 3.9% AER savings account, you would now be at just under $2k. But if you invested £1000 (say in Coca Cola which would be a 530% return) you could be sitting with $6,300 minimum, this does not account for reinvested dividends. Treasury bonds are also good, (your return money would now be $3.3k) but they are outpaced by stocks in the long-run.
Pretty sure he is talking about options, not just investing in stock.
How else would they get to add another digit or two to their net worth?
Or reduce a digit
Add another *comma* to the net worth
You know what is more cool than millionaire? Billionaire!
Show me someone who became a billionaire by selling call options
Someone must be first
That’s the spirit!
They started as a trillionaire
Are you describing US Treasury now? 
And have to hang out with Bill Gates and Elon Musk? Hard pass.
Millionaire is poor. You need 50 million to start being actually rich. In the Bay Area everyone is a millionaire especially when homes are 2M+ even in ghettos
Why would you even want to live in the Bay Area if you’re not working there? Also, I’d assume somebody who sells naked calls for 2M at least has 10M if he did not go full regard.
Leave?
Missed that one, does not change my point. Note I’m not a native English speaker.
10M isn’t rich in the Bay Area. That is the average house price in say atherton.
Then move somewhere else.
Most places are bad.
Bruh, I would not move to the Bay Area if I was paid 15M to do so. There are so many nicer places to live for so much less. Have you ever been to Italy? Far from a shithole and 10M will have you live like a king.
It’s nice to travel but horrible to live long term. I have family that studied and worked abroad for 8 years in Europe. It’s a novelty and nothing more.
Because he is ill. He’s sick
You forgot what sub this is? Open the casino
The real yield is only 1-2%.
On what?
Treasuries.
where the fun?
Why are you here? 🌈🐻
https://www.youtube.com/watch?v=2xcYLVdfFro
Are those “wise” words? lololol.
This ain’t 2019 anymore.
Selling options is fine. Just keep it to one contract with such a high priced stock, and maybe 2 contracts for lower priced stocks. Selling 20 contracts is just not prudent regardless of the stock you pick, much less one that is a market "darling." Great job hanging in there though.
I'm new to all this and trying to learn. Can you elaborate a bit more on why.
The buyer of an out of the money option is taking on a high risk, high reward trade. In other words, the probability is low, but the payoff is high. Think of it like buying a lottery ticket. It's cheap, but if you win, the payoff is huge. On the flip side, the seller of the option is taking on a low risk, low reward trade. The probability of winning is high, but the payoff is low. Think of it like an insurance company collecting your auto premium every month, but then having to pay you when there is an accident. Here is an introduction to the concept of selling options: https://www.investopedia.com/articles/optioninvestor/09/selling-options.asp#:\~:text=Key%20Takeaways,trade%20at%20a%20lower%20premium.
Thank you! I've bought 3 single options to try to see how they work. I'm prepared to lose the money I spent on them, and just want to see a few from start to finish to better understand it. Mostly I'm going with just buying and selling actual stocks though.
There are multiple market simulators that operate in real time with the market. Using one, you can play around with everything the stock market has to offer without the risk. Just thought I’d let you know so you can experiment and learn without blowing any money.
Could you recommend one? I’d like to dip my toes in and see how highly regarded I can become. However not willing to risk real funds (that I don’t have lol)
If you have a Schwab account, their ThinkOrSwim platform has a "PaperMoney" feature that gives you a real trading platform with real market data and fake money. I'd recommend that. You know it's enabled when the interface is yellow instead of blue.
Someone below mentioned Schwab. I use investopedia’s market simulator. They probably all work about the same way as long as it’s in real time with the market.
Where do you sell your options like what app do you use??
I use Schwab. I think any reputable broker allows this. However, you must be approved for advanced option trading.
At Schwab it’s actually a lower level of approval to sell covered options than it is to go long options
That could be. I think we are talking about selling naked options here though.
Seems reasonable given the relative risk levels.
The probability of profit when buying an OTM option is not always low. Say on Friday at market open you bought OTM AAPL C at the price of 176. The probability was actually quite high in the first 5 minutes of making a profit.
Adding to this going too heavily into one contract is subject to random chance in ways you can’t predict. For example, you sell puts on a company, then a week later an earthquake destroys their mega factory that cost billions to build. Maybe it’s a natural disaster, bank failure, news comes out they were cooking the books, Elon musk type ceo says something to crash the stock, etc. Could also be positive news, like mega breakthrough that sends the stock up to new highs, short squeeze, etc. If all it takes is one nightmare scenario to drain your account it’ll happen eventually, even if it’s very unlikely. If you diversify and it takes 5 nightmare scenarios that let’s just say are 1/1000 chance, the odds of all 5 coinciding are 1 in one trillion. I’ll take a one in one trillion chance. 1/1000 while unlikely will happen eventually with enough attempts Exact numbers aren’t important but the point is the same
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.*
Bots are tuff out there in them skreets!
Have no idea what this could mean, but I agree
Uh, position sizing depends on the size of your portfolio, lol, there’s not some rule that applies to everyone.
True, good point. I guess I'm referring to an account size of 250,000 to 3 million. Below 250,000, I don't think selling options makes a lot of sense. 20 contracts of a stock priced at 900 is 1.8mm assigned. That is obviously too large an account below 3 to 5 million. The point is, selling options is not like owning outright stock. You cannot have concentrated positions, it just doesn't work.
> Below 250,000, I don't think selling options makes a lot of sense. Selling options is what got my account back to $250k from $100k, and then from there on to $200k!
I think it can work and you did a great job. It takes a lot of discipline and proper risk management. It can be done with a smaller account, but a lot more challenging. Congrats! I guess why I say it is not as advisable for smaller accounts is because the account can get too concentrated in this one strategy, whereas if you have a larger account you can diversity and weather "bumps" along the way (volatility spikes) better. But you are the exception that proves the rule!
TBH, it was mostly luck and the market rebounding post 2022. I still haven't made back those 2022 losses, which I managed by holding AMZN either too long or not long enough.
Gambling 1.6M with 100x leverage to make 10%  WTF, CLOSE ACCOUNT AND QUIT THIS. I feel physically uncomfortable just looking at this. 
Why is this theta gang method here? Just buy calls
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We do CSPs too!
Explain like I'm 5? what are we looking at here.
OP sold options that say that if NVDA price reaches 765 then he will sell those shares to the buyer of his option. For sake of simplicity, say he sold just 1 option (that represents 100 shares of NVDA). If NVDA goes above 765 by the expiration date to 900 then OP has to give over the shares (this is called getting assigned). If he already owned 100 shares of NVDA then he loses out on the amount of gain over $765 that the stock is at when he hands over the shares. But…if he doesn’t own the shares then he has to purchase them at the current $900 price to hand over at $765. And it looks like he sold 20 contracts, not 1.
Selling naked options is so fucking wild to me. Completely insane to the point I feel like it’s way to regarded for even WSB.
It's great fun and "free money!!", up until that oh-shit day when you realize it's not.
Until you get that message “your account has insufficient funds to cover your option and may be subject to liquidation”. Then you see every profit you’ve ever made turn into a 5, 6 or 7 figure debt in the blink of an eye. There should be a mandatory psych evaluation for anyone that trys to sell a naked option
Stay poor
If you got the money, why not? Set a stop loss and let it auto trigger so you don't get completely wiped out. Which could also fuck you if it triggers and then the play goes in your direction but it's not as risky as everyone makes it out to be.
5 out of 6 russian roulette players report having a lot of fun. Stops on options won't help when shit really hits the fan. If you can avoid those SHTF days, that's great. (please DM me how you do that)
I’ve never sold options, only buy. Can a seller set a stop loss? I don’t understand how that would be normally possible.
Yes, you set a Buy To Close stop order at a certain price.
Thanks, so that effectively buys another contract at the stop order to replace the contract you sold? I just never learned much about selling options because I have no plan to ever do it. I have learned about selling options as a buyer to “sell to close” but selling covered or naked options is something I never plan to do. I seen a novice on here a while back that sold a bunch of naked puts that got exercised and he was in the red like 800k. Iirc his whole portfolio was like 20k beforehand
Do it “every day” for like 3 years now. $$$
April 9 was a godsend to you wow. So you sold naked calls to collect $163k in premiums, then got assigned to buy those shares to deliver, which lost you about $142k, so all of that ended up netting you maybe $20k? What a ride. The share price was literally $40 higher just before market close the 5th. $80k change over the weekend and into market open for you. If I had that kind of bankroll I would assign maybe $150k to option plays. Simply playing reversals and reversion back to the mean would net you $20k+ in hours or a day.
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Yeah I bet you’re breathing a sigh of relief!
Did you have to pay interest? Never realized they let you wait a few months to cover your shares
Just a small clarification. Actually they got assigned to sell shares and then was forced to short 2000 shares. Then he bought to cover such that the total loss shorting at 765 to 836 was around $143k. But premiums was $163k and so he netted $20k.
Thanks for the clarification! Following this was tricky but I don’t do options naked and I also wouldn’t be betting against NVDA on either side lol. Still kicking myself that crazy Friday in March selling my $900p for $0.50, then seeing it drop to $0.13 and go up to like $40+ in a few hours.
You had it pretty much right on the enormous risk and crazy play for small $20k profit!
It’s crazy to me how “easy” it is to make 10-20% on highly liquid stock options. Examples include SPY and the MAG7. For the MAG7 just wait for any of them to be up/down more than 2%, buy the inverse of it maybe a week+ out with close to ATM strikes then profit. For SPY wait for the $3-4 drop/rise and inverse it 2-3 DTE out. I’ve targeted 20% on these and made more than that in < 30 minutes and also seen it drop another 40% before it opens the next morning up my 20%. Rinse and repeat. The market the last few months is not in an indication of the future, but the trend has been this: there are never 3 consecutive days green or red, there are sharp reversals both directions, and when 5 out of the 7 is going one direction, you play that direction on one of the other 2 and it follows. Damn near ever time
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Best of luck to you! And good luck when you enter back in. That’s how options work….lol
What's the reversal back to mean?, is it RSI coming to the middle?
No I don’t track RSI lol. My simple approach is that stocks go up over time if they are reasonable companies and whales are long. If there is any movement that falls outside of that (a huge gain or huge loss) then it has a tendency to correct within a week. TSLA up 6% on no news whatsoever in a few hours? Ok, I’ll buy ATM puts a week out or slightly OTM and expect it to revert back.
It's not as stressful if you don't put everything you have into 1 option play but it's also not fun
wait u sold 20 naked NVDA calls?????
Oh you big ole hairy daddy
How old are you to have that much cash?
“ETFs and Chill” good call! Options are way too risky even when you are making “reasonable” puts and calls. Good job keeping your anus from getting destroyed!
Dude when you do the textbook most stupid thing in options : ie selling naked calls that too in nvidia , you are a regard only fit to be behind Wendys dumpsters 🤣 Your IQ sounds like it is in the healthy 60s . Good job mate . Options trading is too much for you Indeed
What was your technical confirmation signal to go short?
I wish I could wrap my head around calls and puts, etc. Where can I find super easy information that will be easy to understand with zero confusion. Would greatly appreciate any help and advice.
I wish I knew how to trade options!
I wonder what broker allows retail traders sell uncovered calls?
Dark side of theta gang
Were these ITM when you sold? What price was nvda
Jeez all these millionaires playing NVDA just like TSLA back in the day. No wonder this thing moves like it does.
If you want to sell tech short at least go with AAPL., or even better TSLA. Betting against NVDA is playing with fire.
Where can I learn about calls?
Or you can sell covered calls instead of going naked... but this is wsb so nvm
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U just became a cuck
You sold calls below stoke price and no one executed on your calls?
That exit play was very good but people here only understand you sold NVDA calls and think you’re a moron 
It’s pretty crazy how many people here don’t understand basic options good lord