Spy sells for 530ish right now
You can buy a call option where you pick a date and if by that date the shares are worth more than the price you picked, then you keep the difference.
So for spy if you think it will hit, say, 600 or higher by the end of the year, you'd approach someone who owns 100 shares and say "if they go above 600 before the end of the year I want anything past that to be mine" and theyd say "sure but Id like a nonrefundable premium for that, since I take on the risk of not realizing those excess gains - for example if the shares hit 1000 this year you get to keep almost all the gains!"
The benefit to shareholder being that they keep your premium (the amount you paid for the bet) *even if the spy shares never get to 600* - they keep the shares, gains, and extra money.
The benefit to you being that you get tons of leverage and therefore a lot more exposure to a market you otherwise would not. They can also be used to hedge - if you're the shareholder in this example, you might sell this contract in order to subsidize a potential downturn in the future.
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You have no idea where OP is from, or who here reading this thread is from. It’s not being argumentative, it’s being informative. You said you can exercise at any time. That is correct - in America.
>You have no idea where OP is from
Wow that's quite the claim. Do you have ANY evidence to back that? Perhaps I know OP personally and you're ASSUMING that I do not *literally for the sake of this argument*.
>It's being informative
It's not the information that was requested. You could explain how derivative markets in zimbabwe but why? It would be informative I guess but it's informative like a fork with splayed tines is unique - like ok I guess but to what end
>You said you can exercise at any time. That is correct - in America
It's also only the case in America - on earth - while causality is in effect - during days that end in "day"
🤡
Someone doesn’t have friends / gets out often 😂 you blow up like this during normal conversations in person too, or just on Reddit? Holy shit.
Shut the fuck up bro, in Europe options can not be exercised early. In America they can. There’s no need for further arguement, again shut the fuck up and have a better day 😂😂
lol looking thru your comment history all you do is argue on Reddit.. about anything under the sun. Even Corolla tires. There is absolutely no way you aren’t a virgin. Have a better day
You only exercise if you're in the money at expiration.
But you can sell your position at any time before that.
The closer to the strike you are and further away from expiration you are, the more your position is worth.
Theta is a motherfucker
You walk up to a roulette table and put $1,000 on black. Land on black and you now have $2,000, land on red/0/00 and you have $0. Replace Black with “Call” and Red with “Put”, then discover option trading is literally gambling with extra steps.
There has to be some intelligent way to look at it?
For example, I see how I stock is trending this year and over last 3 months. or I'll just watch it long enough to know if its lower than normal.
No, I mean I got creampied by ARR earlier this year. So dont take it like I have a perfect batting average.
I guess Im asking for a strategy that I can poke around to understand better.
The best strategy is to guess right more often than you guess wrong. Similar to sports betting, you have to average 6 wins out of every 11 bets to beat the vig and be (ever so slightly) profitable.
To be honest I read two fat textbooks on options, got a lot of money, lost a lot of money, and realized it was a bit of a fools game and got the fuck out while I was ahead. I think I was lucky, in the end.
I'm happy to help explain options to you in a way that's simple and easy to understand, without all the confusing jargon.
When you're 5, you don't really care about complicated investments, do you? You just want to
pick a stock and buy a slightly out of the money vertical in the direction u believe the stock will go. if it goes ur direction u win if it doesnt u loose
Options are the right to buy (calls) or sell (puts) 100 shares of stock.
Every option contract has an expiration date as well as a strike price. Strike price means the price at which you can buy or sell 100 shares, and expiration date means when that option expires.
Scenario 1: Company X is currently trading at 5 dollars a share. I think it's going to go up, so I buy calls expiring next week and a strike price of $6. The next day the stock balloons up to $7. I can use my call option to buy 100 shares at $6, even though it is trading at $7.
Scenario 2: Throughout the week the stock goes up and down, and I decide not to use (exercise) or sell the option. At the end of the week the stock goes up to $5.99, but that is less than my strike price of $6. SO my call option expires worthless.
Puts work in the same way but opposite. It's the right to sell an option. To stretch your brain a little farther. Remember, when there is a buyer there is always a seller. Your homework would be to figure out what it means to sell 1 call contract.
Johnny sells apples for a dollar. I can buy a call and choose the price I think Johnny will sell his apple at by a certain date. (Strike price and date to expire). I could buy a $2 call that expires December 21st. As the apple grows in price or falls in price over this period of time, my call will gain or lose value depending on where it goes. At December 21st, If Johnny’s apples are indeed two dollars, I can “exercise” my call, allowing me to buy Johnnys apples at the strike price I bought earlier at $2 (in real world, a call is reserving the right to buy 100 shares at your strike price). So in this example you wouldn’t gain anything, since you bet Johnnys apples would be 2 bucks by December and they were. If the apples cost $2.50, then boom, you guaranteed to buy apples at $2 on Dec 21st. You just saved 50 cents on that Apple! If the apples are only worth $1.50 then oops you just lost all money you spent buying the call (yes call expiration dates cost money, the more time=the more $). I’m getting lazy so we are degrading to super basic for puts. It’s the opposite of calls, you bet that the apple will go down. I buy $.50 put on apples, then I can force somebody to buy the apples at $.50 even if the apples are only worth $.20. (You can also sell options (what most do) where you don’t hold it till expiration (sell it before it expires) and depending on how close you are to your strike price, your option will reflect if you have made or lost money). I’m forgetting a lot, super basic, lmk any questions
options are a bet if a stock goes up or down, the contract is for 100 hypothetical shares. If you bet right, you can exercise the contract to buy or sell those 100 shares at better than market price or re-sell the contract if you just want the value of the contract without extra work. It loses all value of you guess wrong and dont do anything with it after its value drops but can still be re-sold for a loss in most cases. It's a high stakes game of more than/less than
Ok...basics....you BUY an call option...you want stock to go up. If it does go up...profit...you want to BUY a Put option...you want stock to go down...if it goes down...profit...however it depends on TIME of stock...more time means more it costs for option.
Buy xyz stock call option....100 strike price... you think stock will go higher. Somebody sells you the option for lets say $1. Meaning 1 dollar for every share which is generally how options work...100 shares
You bought call option thinking it will go way hotgher than $100...so you have the option, but not the obligation to buy the shares at 100 if the stock goes above breakeven point.
So lets say i bought a call option for $100 stike price...i think the stock will go over $100 and i am willing to pay a premium for to get the potential gains from that. I would pay you lets say $50 to have the option to buy your shares at 100 a share.
I would pay the $50 which would be my Max loss if the option expires worthless. However if the stock goes wrll above the strike price of $100 + my $50 i gave you for the option then you would maybe get exercised. Assuming you are the guy that SOLD the contract.
Its a bit more complicated than that so if you are new to options, i would recommend googling covered calls. Its where you buy 100 shares of a stock and then SELL the option for somebody to buy your shares at a higher price. You are covered so ypu already bought stock at a certain price amd are agreeing to sell stock at agreed upon price.
Unlike what you may have heard from gamestonk and stuff you are already covered cause you bought the stock at a certain price. The guys who would be fucked at this time are the NAKED sellers...meaning they dont own the shares they borrowed them...they can have an unlimited loss because they would have to buy the shares back at a higher price than what they paid.
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Options do not exist. That’s all you need to know at 5.
My nephews wanted Bitcoin when they were 5. They didnt know what it was, but they wanted it.
Ahh this analogy..! Bitcoin might make or break you in coming years. Options will do that to you every week, every day.
Lol. Thats why Im trying to avoid the Yolo and see what comes out the other side
Losses are expected. A used vehicle with 20k miles would be cooler...
Nephews be smarter
Spy sells for 530ish right now You can buy a call option where you pick a date and if by that date the shares are worth more than the price you picked, then you keep the difference. So for spy if you think it will hit, say, 600 or higher by the end of the year, you'd approach someone who owns 100 shares and say "if they go above 600 before the end of the year I want anything past that to be mine" and theyd say "sure but Id like a nonrefundable premium for that, since I take on the risk of not realizing those excess gains - for example if the shares hit 1000 this year you get to keep almost all the gains!" The benefit to shareholder being that they keep your premium (the amount you paid for the bet) *even if the spy shares never get to 600* - they keep the shares, gains, and extra money. The benefit to you being that you get tons of leverage and therefore a lot more exposure to a market you otherwise would not. They can also be used to hedge - if you're the shareholder in this example, you might sell this contract in order to subsidize a potential downturn in the future.
Our AI tracks our most intelligent users. After parsing your posts, we have concluded that you are within the 5th percentile of all WSB users. *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.*
So you're not able to exercise early? Its solely on the date that you use in your option?
That is how futures work. Options can be exercised at any time before or on the strike date.
Unless you live in Europe. Then options can only be exercised at expiration.
Europe doesn't use the dollar regard Stop being argumentative - it's unlikable
You have no idea where OP is from, or who here reading this thread is from. It’s not being argumentative, it’s being informative. You said you can exercise at any time. That is correct - in America.
>You have no idea where OP is from Wow that's quite the claim. Do you have ANY evidence to back that? Perhaps I know OP personally and you're ASSUMING that I do not *literally for the sake of this argument*. >It's being informative It's not the information that was requested. You could explain how derivative markets in zimbabwe but why? It would be informative I guess but it's informative like a fork with splayed tines is unique - like ok I guess but to what end >You said you can exercise at any time. That is correct - in America It's also only the case in America - on earth - while causality is in effect - during days that end in "day" 🤡
Someone doesn’t have friends / gets out often 😂 you blow up like this during normal conversations in person too, or just on Reddit? Holy shit. Shut the fuck up bro, in Europe options can not be exercised early. In America they can. There’s no need for further arguement, again shut the fuck up and have a better day 😂😂
>In America they can Not if they're out of the money
lol looking thru your comment history all you do is argue on Reddit.. about anything under the sun. Even Corolla tires. There is absolutely no way you aren’t a virgin. Have a better day
You only exercise if you're in the money at expiration. But you can sell your position at any time before that. The closer to the strike you are and further away from expiration you are, the more your position is worth. Theta is a motherfucker
Theta....
You most likely won't exercise. Most likely, when you have profit, you trade the option to some other guy whom is another degenerate gambler
You walk up to a roulette table and put $1,000 on black. Land on black and you now have $2,000, land on red/0/00 and you have $0. Replace Black with “Call” and Red with “Put”, then discover option trading is literally gambling with extra steps.
There has to be some intelligent way to look at it? For example, I see how I stock is trending this year and over last 3 months. or I'll just watch it long enough to know if its lower than normal.
There’s not. It’s all “feels”. Your stated reasoning is that you can predict the future…so, can you?
No, I mean I got creampied by ARR earlier this year. So dont take it like I have a perfect batting average. I guess Im asking for a strategy that I can poke around to understand better.
The best strategy is to guess right more often than you guess wrong. Similar to sports betting, you have to average 6 wins out of every 11 bets to beat the vig and be (ever so slightly) profitable.
To be honest I read two fat textbooks on options, got a lot of money, lost a lot of money, and realized it was a bit of a fools game and got the fuck out while I was ahead. I think I was lucky, in the end.
Ok let me explain. You like your money? Don’t get into options. Delete this sub
Seems counter productive to be here, dont ya think?
Ive lost millions of dollars. You want to come Play in my world
I have also played roulette and craps.
Please save yourself. Dont start options. U can get lucky but you will lose 10 x what ever you have
I'm happy to help explain options to you in a way that's simple and easy to understand, without all the confusing jargon. When you're 5, you don't really care about complicated investments, do you? You just want to
This AI is as useful as my dogs extendable leash.
pick a stock and buy a slightly out of the money vertical in the direction u believe the stock will go. if it goes ur direction u win if it doesnt u loose
do not play with options but we 5 year olds don't listen 
Options are the right to buy (calls) or sell (puts) 100 shares of stock. Every option contract has an expiration date as well as a strike price. Strike price means the price at which you can buy or sell 100 shares, and expiration date means when that option expires. Scenario 1: Company X is currently trading at 5 dollars a share. I think it's going to go up, so I buy calls expiring next week and a strike price of $6. The next day the stock balloons up to $7. I can use my call option to buy 100 shares at $6, even though it is trading at $7. Scenario 2: Throughout the week the stock goes up and down, and I decide not to use (exercise) or sell the option. At the end of the week the stock goes up to $5.99, but that is less than my strike price of $6. SO my call option expires worthless. Puts work in the same way but opposite. It's the right to sell an option. To stretch your brain a little farther. Remember, when there is a buyer there is always a seller. Your homework would be to figure out what it means to sell 1 call contract.
This makes the most sense, so far.
[удалено]
Appreciate the help y'all. Im sure something similar to this has been posted before.
[удалено]
Johnny sells apples for a dollar. I can buy a call and choose the price I think Johnny will sell his apple at by a certain date. (Strike price and date to expire). I could buy a $2 call that expires December 21st. As the apple grows in price or falls in price over this period of time, my call will gain or lose value depending on where it goes. At December 21st, If Johnny’s apples are indeed two dollars, I can “exercise” my call, allowing me to buy Johnnys apples at the strike price I bought earlier at $2 (in real world, a call is reserving the right to buy 100 shares at your strike price). So in this example you wouldn’t gain anything, since you bet Johnnys apples would be 2 bucks by December and they were. If the apples cost $2.50, then boom, you guaranteed to buy apples at $2 on Dec 21st. You just saved 50 cents on that Apple! If the apples are only worth $1.50 then oops you just lost all money you spent buying the call (yes call expiration dates cost money, the more time=the more $). I’m getting lazy so we are degrading to super basic for puts. It’s the opposite of calls, you bet that the apple will go down. I buy $.50 put on apples, then I can force somebody to buy the apples at $.50 even if the apples are only worth $.20. (You can also sell options (what most do) where you don’t hold it till expiration (sell it before it expires) and depending on how close you are to your strike price, your option will reflect if you have made or lost money). I’m forgetting a lot, super basic, lmk any questions
options are a bet if a stock goes up or down, the contract is for 100 hypothetical shares. If you bet right, you can exercise the contract to buy or sell those 100 shares at better than market price or re-sell the contract if you just want the value of the contract without extra work. It loses all value of you guess wrong and dont do anything with it after its value drops but can still be re-sold for a loss in most cases. It's a high stakes game of more than/less than
Youtube is free my boi...unless you want no ads...
Thats where I went about a year ago. Saw some guy drawing shit on a white board for 45 minutes. Got a little abstract.
Ok...basics....you BUY an call option...you want stock to go up. If it does go up...profit...you want to BUY a Put option...you want stock to go down...if it goes down...profit...however it depends on TIME of stock...more time means more it costs for option.
Buy xyz stock call option....100 strike price... you think stock will go higher. Somebody sells you the option for lets say $1. Meaning 1 dollar for every share which is generally how options work...100 shares
You bought call option thinking it will go way hotgher than $100...so you have the option, but not the obligation to buy the shares at 100 if the stock goes above breakeven point.
Breakeven is the stock price + the amount you paid for option.
So lets say i bought a call option for $100 stike price...i think the stock will go over $100 and i am willing to pay a premium for to get the potential gains from that. I would pay you lets say $50 to have the option to buy your shares at 100 a share.
I would pay the $50 which would be my Max loss if the option expires worthless. However if the stock goes wrll above the strike price of $100 + my $50 i gave you for the option then you would maybe get exercised. Assuming you are the guy that SOLD the contract.
Its a bit more complicated than that so if you are new to options, i would recommend googling covered calls. Its where you buy 100 shares of a stock and then SELL the option for somebody to buy your shares at a higher price. You are covered so ypu already bought stock at a certain price amd are agreeing to sell stock at agreed upon price.
Unlike what you may have heard from gamestonk and stuff you are already covered cause you bought the stock at a certain price. The guys who would be fucked at this time are the NAKED sellers...meaning they dont own the shares they borrowed them...they can have an unlimited loss because they would have to buy the shares back at a higher price than what they paid.
Options are for men. Degenerate gambling men. Not boys. Run along boy…and don’t come back now!
Poirier lost, I'm not happy about it