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Off-Topic Stock Market & Crypto Discussion

miamicanephins said:
LOL! Sorry, see my knowledge... Alright try VFF closed at 5.74, would buy more at 5. Or you pick if that's a bad example.
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I have a conflict on interest on that one:)

Let's just use AAPL as an example because everyone is very familiar. FYI the prices I quote may be a little off because its the weekend.

AAPL closed right around $107 yesterday. You would happily buy 1000 shares (10 contracts), but only at a lower price, under $100. If you could get AAPL under $100, you'd load up because you think it's going to $150 in the next year. Let's use the Oct 30th chains. Looking at the $102 puts right now, the bid (what someone is looking to buy these for) is $4.10. That means someone is willing to pay you $4.10 per share for the right for them to make you buy their shares at $102 on Oct. 30. Which means you would be forced to buy AAPL at $102 if it's lower than that.

But you wouldn't really be paying $102, right? Because you already banked the $4.10 premium. So if you are forced to buy, your actual net cost would be $97.90 which you'd happily pay because you love AAPL longterm.

If AAPL is ABOVE $102 on Oct. 30, you get to walk away with your whole premium, which is in this case is $4100, so you made money just by being disciplined and not buying high. You essentially sold short at $4.10, and bought to cover at $0 (it actually just expires worthless you don't have to do anything). 100% short gain in 40 days or so.

So you either get paid $4.10 a share for doing nothing, or you get to buy AAPL for $10 less than its trading at today. Win/win.

The thing here is you 100% need to be willing to buy the stock if it does drop because you will have to, unless you buy to cover before the expiration (at a profit or loss, depending on the price of the option at trades just like a stock, bids and asks). So you need to be able to cover that amount of $ if you're called out, but you WANT the stock anyway.

This also isn't a substitute for owning the common of a stock you like, because your max profit is $4.10 per share here. Its a great complimentary strategy you can use to boost your returns on stocks you own, or stocks that you think are going to move up before the expiration date, but you aren't interested in long term.

Lots of words, sorry. Let me know if I can clarify anything.
 
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Cryptical Envelopment said:
I have a conflict on interest on that one:)

Let's just use AAPL as an example because everyone is very familiar. FYI the prices I quote may be a little off because its the weekend.

AAPL closed right around $107 yesterday. You would happily buy 1000 shares (10 contracts), but only at a lower price, under $100. If you could get AAPL under $100, you'd load up because you think it's going to $150 in the next year. Let's use the Oct 30th chains. Looking at the $102 puts right now, the bid (what someone is looking to buy these for) is $4.10. That means someone is willing to pay you $4.10 per share for the right for them to make you buy their shares at $102 on Oct. 30. Which means you would be forced to buy AAPL at $102 if it's lower than that.

But you wouldn't really be paying $102, right? Because you already banked the $4.10 premium. So if you are forced to buy, your actual net cost would be $97.90 which you'd happily pay because you love AAPL longterm.

If AAPL is ABOVE $102 on Oct. 30, you get to walk away with your whole premium, which is in this case is $4100, so you made money just by being disciplined and not buying high. You essentially sold short at $4.10, and bought to cover at $0 (it actually just expires worthless you don't have to do anything). 100% short gain in 40 days or so.

So you either get paid $4.10 a share for doing nothing, or you get to buy AAPL for $10 less than its trading at today. Win/win.

The thing here is you 100% need to be willing to buy the stock if it does drop because you will have to, unless you buy to cover before the expiration (at a profit or loss, depending on the price of the option at trades just like a stock, bids and asks). So you need to be able to cover that amount of $ if you're called out, but you WANT the stock anyway.

This also isn't a substitute for owning the common of a stock you like, because your max profit is $4.10 per share here. Its a great complimentary strategy you can use to boost your returns on stocks you own, or stocks that you think are going to move up before the expiration date, but you aren't interested in long term.

Lots of words, sorry. Let me know if I can clarify anything.
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I love the fact that the hypo assumes you have 100k to spend on one stock. CIS has more uber wealthy fans than any other message board on the internet.

I do agree with you on puts, especially in this market if you are wanting to buy 100 shares or more of a stock. There’s no risk if you have a set price you’re going to buy at anyway.
 
SweetAndSour said:
I love the fact that the hypo assumes you have 100k to spend on one stock. CIS has more uber wealthy fans than any other message board on the internet.

I do agree with you on puts, especially in this market if you are wanting to buy 100 shares or more of a stock. There’s no risk if you have a set price you’re going to buy at anyway.
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Round numbers bud, as an example. You can buy as little as 1 contract or 100 shares of stock as you mentioned. Not every stock is trading at $100+ either. You can do this with a $10 stock with a .75 premium just the same for example. Which, if you bought the minimum 1 contract, would mean a maximum commitment of $925 if you are forced to buy the 100 shares.

I've NEVER talked specific dollars or quantity on here with regards to ideas, and I certainly do not discuss the value my own portfolios. It's about the concepts, percentage return, and your own net worth and comfort level. You can scale up or down accordingly. Only an absolute piece of crap would talk about their personal net worth on a message board.
 
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Cryptical Envelopment said:
Give me another one, there are no option chains for NNOX! Something a little more established. Doesn't have to be FB or GE, but it has to have options.
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NVDA 475... or 350 sometime next yr. I don't know options either so I'm interested. I see there's a lot of interest @ 500 520 and 550, which means it may end up at any of those nxt wk , but that's about it
 
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Cryptical Envelopment said:
I have a conflict on interest on that one:)

Let's just use AAPL as an example because everyone is very familiar. FYI the prices I quote may be a little off because its the weekend.

AAPL closed right around $107 yesterday. You would happily buy 1000 shares (10 contracts), but only at a lower price, under $100. If you could get AAPL under $100, you'd load up because you think it's going to $150 in the next year. Let's use the Oct 30th chains. Looking at the $102 puts right now, the bid (what someone is looking to buy these for) is $4.10. That means someone is willing to pay you $4.10 per share for the right for them to make you buy their shares at $102 on Oct. 30. Which means you would be forced to buy AAPL at $102 if it's lower than that.

But you wouldn't really be paying $102, right? Because you already banked the $4.10 premium. So if you are forced to buy, your actual net cost would be $97.90 which you'd happily pay because you love AAPL longterm.

If AAPL is ABOVE $102 on Oct. 30, you get to walk away with your whole premium, which is in this case is $4100, so you made money just by being disciplined and not buying high. You essentially sold short at $4.10, and bought to cover at $0 (it actually just expires worthless you don't have to do anything). 100% short gain in 40 days or so.

So you either get paid $4.10 a share for doing nothing, or you get to buy AAPL for $10 less than its trading at today. Win/win.

The thing here is you 100% need to be willing to buy the stock if it does drop because you will have to, unless you buy to cover before the expiration (at a profit or loss, depending on the price of the option at trades just like a stock, bids and asks). So you need to be able to cover that amount of $ if you're called out, but you WANT the stock anyway.

This also isn't a substitute for owning the common of a stock you like, because your max profit is $4.10 per share here. Its a great complimentary strategy you can use to boost your returns on stocks you own, or stocks that you think are going to move up before the expiration date, but you aren't interested in long term.

Lots of words, sorry. Let me know if I can clarify anything.
Click to expand...
What’s your problem with GAN?
 
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Cryptical Envelopment said:
I have a conflict on interest on that one:)

Let's just use AAPL as an example because everyone is very familiar. FYI the prices I quote may be a little off because its the weekend.

AAPL closed right around $107 yesterday. You would happily buy 1000 shares (10 contracts), but only at a lower price, under $100. If you could get AAPL under $100, you'd load up because you think it's going to $150 in the next year. Let's use the Oct 30th chains. Looking at the $102 puts right now, the bid (what someone is looking to buy these for) is $4.10. That means someone is willing to pay you $4.10 per share for the right for them to make you buy their shares at $102 on Oct. 30. Which means you would be forced to buy AAPL at $102 if it's lower than that.

But you wouldn't really be paying $102, right? Because you already banked the $4.10 premium. So if you are forced to buy, your actual net cost would be $97.90 which you'd happily pay because you love AAPL longterm.

If AAPL is ABOVE $102 on Oct. 30, you get to walk away with your whole premium, which is in this case is $4100, so you made money just by being disciplined and not buying high. You essentially sold short at $4.10, and bought to cover at $0 (it actually just expires worthless you don't have to do anything). 100% short gain in 40 days or so.

So you either get paid $4.10 a share for doing nothing, or you get to buy AAPL for $10 less than its trading at today. Win/win.

The thing here is you 100% need to be willing to buy the stock if it does drop because you will have to, unless you buy to cover before the expiration (at a profit or loss, depending on the price of the option at trades just like a stock, bids and asks). So you need to be able to cover that amount of $ if you're called out, but you WANT the stock anyway.

This also isn't a substitute for owning the common of a stock you like, because your max profit is $4.10 per share here. Its a great complimentary strategy you can use to boost your returns on stocks you own, or stocks that you think are going to move up before the expiration date, but you aren't interested in long term.

Lots of words, sorry. Let me know if I can clarify anything.
Click to expand...
Why did or would you choose Oct, verses say, Dec?

If AAPL goes below 102 on Oct 1, are you forced to buy then or on Oct 30?

And if the price goes to 101.99, are you always buying at 102?

Why would you choose to buy before the expiration?

So, if you spent 4,100 on the options and the price didn't go below 102 before Oct 30, you are basically getting your money back, the net is 0.
But if the price goes below 102, you have to pay 97,900.

It seems like this strategy is to ensure you don't over pay for a stock, but you miss out on the stock because it doesn't go low enough.

I don't understand the highlighted part at all. I thought you wanted the stock to go down. And where does the 4.10 profit come from?

Sorry for so many questions.
 
Want some crypto exposure? F’ing great opp to buy BRPHF right now... $1.99 fantastic price. NOW NOW NOW CIS RED ALERT.

Basically the potential Blackstone of crypto.
 
miamicanephins said:
Why did or would you choose Oct, verses say, Dec?

If AAPL goes below 102 on Oct 1, are you forced to buy then or on Oct 30?

And if the price goes to 101.99, are you always buying at 102?

Why would you choose to buy before the expiration?

So, if you spent 4,100 on the options and the price didn't go below 102 before Oct 30, you are basically getting your money back, the net is 0.
But if the price goes below 102, you have to pay 97,900.

It seems like this strategy is to ensure you don't over pay for a stock, but you miss out on the stock because it doesn't go low enough.

I don't understand the highlighted part at all. I thought you wanted the stock to go down. And where does the 4.10 profit come from?

Sorry for so many questions.
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1. You can choose any exp date you prefer. I picked Oct for my example, I own plenty of longer term options. The farther they are out, the more valuable they are. There is time value and money value (price) and that's part of the strategy.

2. You are not forced to do ANYTHING until the expiration date. Of course the value of the option will change based on market value along the way. What can be interesting is when an option that you sold moves toward the strike price and becomes more valuable (which is bad for you since you are short) which shows up as if you are getting crushed in your account, but then the clock strikes midnight and it falls short and drops to zero. You should track some options that are near the strike prices as practice to learn more. Wild swings.

3. Yes, you will always buy at $102 (which means a real cost of $97.90 because you were already paid the premium). So if AAPL goes to $90 on the expiration date, you are buying at $102, $12 above market value. Which sucks, but you were going to buy it at $107! So it actually mitigates your loss.

4. (Why would you choose to buy before the expiration?). I don 't understand the question.

5. You didn't SPEND $4100 on the options, you were PAID $4100 to write the options! You sold them (short)! So if the price doesn't go below $102, the options that you SOLD for $4100 expire worthless, and you walk away with your $4100. That's sort of my game. Run these over and over and when they do drop, that's how I accumulate common shares as good prices. And along the way I am banking the premiums.

6. Yes, you will miss out on the stock if it doesn't go low enough to force you to buy. But you are banking premiums along the way that you can apply to the real cost when you do have one hit. In other words, lets say I bank $10 of premiums over three put sales, and then I finally buy AAPL at a good price... whatever price I paid, I have a true net cost of $10 less.

7. Stock goes up, I keep 100% of the premium and walk away. Stock goes down, and I buy a stock I really like at the strike price, MINUS the premium, which is a lot lower than the stock was priced at when I started this trade. It's win/win. How you can lose money is if you end up buying the common of a ****** stock that goes down forever, just like if you just went out and bought regular stock today. You want to do this with companies you like, and of course, there have to be what you think are well priced options there for your needs.
 
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Cryptical Envelopment said:
1. You can choose any exp date you prefer. I picked Oct for my example, I own plenty of longer term options. The farther they are out, the more valuable they are. There is time value and money value (price) and that's part of the strategy.

2. You are not forced to do ANYTHING until the expiration date. Of course the value of the option will change based on market value along the way. What can be interesting is when an option that you sold moves toward the strike price and becomes more valuable (which is bad for you since you are short) which shows up as if you are getting crushed in your account, but then the clock strikes midnight and it falls short and drops to zero. You should track some options that are near the strike prices as practice to learn more. Wild swings.

3. Yes, you will always buy at $102 (which means a real cost of $97.90 because you were already paid the premium). So if AAPL goes to $90 on the expiration date, you are buying at $102, $12 above market value. Which sucks, but you were going to buy it at $107! So it actually mitigates your loss.

4. (Why would you choose to buy before the expiration?). I don 't understand the question.

5. You didn't SPEND $4100 on the options, you were PAID $4100 to write the options! You sold them (short)! So if the price doesn't go below $102, the options that you SOLD for $4100 expire worthless, and you walk away with your $4100. That's sort of my game. Run these over and over and when they do drop, that's how I accumulate common shares as good prices. And along the way I am banking the premiums.

6. Yes, you will miss out on the stock if it doesn't go low enough to force you to buy. But you are banking premiums along the way that you can apply to the real cost when you do have one hit. In other words, lets say I bank $10 of premiums over three put sales, and then I finally buy AAPL at a good price... whatever price I paid, I have a true net cost of $10 less.

7. Stock goes up, I keep 100% of the premium and walk away. Stock goes down, and I buy a stock I really like at the strike price, MINUS the premium, which is a lot lower than the stock was priced at when I started this trade. It's win/win. How can you lose money, if you end up buying the common of a ****** stock that goes down forever, just like if you just went out and bought regular stock today. You want to do this will companies you like, and of course, there have to be what you think are well prices options there for your needs.
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And you need a margin account.. no?
 
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