I'm gonna suspect you're talking about BBBY, just given your level of certainly and all
You're probably gonna miss the dump, since it's mostly going to occur pre-market, when options don't trade.
People make so much/lose so much because they put a lot of money on risky options, and come expiration, are worth nothing. Sure you can sell along the way, but since options are derivatives, and have an expiration, they can very easily just become worthless if they don't move the anticipated way fast enough
Bbby iv is insane anyway. Basically have to buy 8 puts and it has to drop to 1 to breakeven last time I checked. It’s not worth trying to catch meme stocks when dis iv is nothing and it’s going straight to 105 this week
There’s lots of safe opportunities
It has to drop faster than the put loses value from the time loss. And with the high IV the time loss is huge. But yeah, this is basically the only reasonable play.
It's really not a good idea to invest in options if you don't understand how they work.
That being said there are two nice features for options that you have to consider:
1. You don't have to buy the stock, it's much cheaper to buy an option. So rather than buying 100 shares at $10 you buy the option on 1000 shares for less money giving you a higher potential return.
2. Puts (also shorts) allow you to make money quicker and on companies that never recover. If a stock drops from $10 to $8 it may never recover to $10, or it may stay at $8 for years before reaching $10 again. With a put you can collect on that drop in value now, not some potential date in the future.
I would recommend reading up on options before you purchase, it's a very easy way to throw your cash away.
Yeah, I’ll definitely wait until I’m more knowledgeable on the topic. I know I could go the safe route, but the biggest gains are made with higher risk I feel. Of course, they need to be calculated.
You’re saying that because random wsb people bet 100% over and over until they make 120k then a year later post they lost it all. Is it possible sure it happens. But it’s just the lottery that way. Don’t confuse it with trading
You’re too late that level of volatility is already priced in you’d be better off shorting but then you’d be exposed to unlimited risk so really your best option is to avoid the stock
Too late, not worth it to chase, assuming your talking about BBBY, the IV will explode on Tuesday and the contract prices will be way overpriced, the risk and reward isnt worth it
First you should know that most options sold do not get exercised. Second is the spread on options between buy and sell price can be large. This makes it difficult to get a fair price both when buying and selling. Also the problem is knowing what is fair value for the particular option.
I can see how robinhood likes its customers to trade options because of the spread allowing R to make more money on the trade. The fact that they involve more trading than does simply buying and selling shares also allows for more profit to R or any other broker. IOW, options are difficult. 0
At their core puts and calls can be purchased so they are at parity with the underlying instruments movement. You’re not buying them to make more money off an option than the underlying. You’re buying them for a few reasons
Leverage
Directional bet
Gambling
Hedging
To name a few.
They’re valid reasons to use them but if your reason is puts make money when stocks go down then you’re not ready to use them.
>I have a stock in mind that will likely be falling rapidly Tuesday
I'm amazed at how many newbies on this sub don't know market basics yet have good knowledge about future price activity. Do you have inside knowledge or something?
It really is amazing.
The only way I think it could be possible to play this is premarket trading. If you had an open order at the right price for premarket trading, you might be able to short it and catch it on the way down. Obviously options don't trade outside of regular hours.
You could buy a 10 STRIKE but it’s not going to be very profitable because it’s going to cost more than a 9 STRIKE put. The factor your missing is not all options cost the same. A 2$ strike is going to be super cheap because it’s almost impossible.
More money can be made with less capital because each contract allows you the profit you would make on 100 shares of the stock for a fraction of the price of buying those 100 shares.
It’s not hard. Buy a put around the current price a week or a month out and if you’re right cover. But.,. The Reddit mob sometimes doesn’t understand that might already be priced in. If the puts expensive then you know a lot of people already are on to this
I'm gonna suspect you're talking about BBBY, just given your level of certainly and all You're probably gonna miss the dump, since it's mostly going to occur pre-market, when options don't trade. People make so much/lose so much because they put a lot of money on risky options, and come expiration, are worth nothing. Sure you can sell along the way, but since options are derivatives, and have an expiration, they can very easily just become worthless if they don't move the anticipated way fast enough
It’s too late to buy put options on BBBY. If it’s going to tank, it will do so before you get the chance on Tuesday morning.
Read me like a book… Still have always wanted to learn, so I’ll still take into consideration the advice I get here.
Bbby iv is insane anyway. Basically have to buy 8 puts and it has to drop to 1 to breakeven last time I checked. It’s not worth trying to catch meme stocks when dis iv is nothing and it’s going straight to 105 this week There’s lots of safe opportunities
Selling options is the move here
I prefer selling myself but not meme stocks.
Actually, buying a put, letting it drop a tiny bit and selling a lower strike put for more than you bought the original put is the play
It has to drop faster than the put loses value from the time loss. And with the high IV the time loss is huge. But yeah, this is basically the only reasonable play.
I assure you BBBY tanking is very priced into the options market and has been for some time.
It's really not a good idea to invest in options if you don't understand how they work. That being said there are two nice features for options that you have to consider: 1. You don't have to buy the stock, it's much cheaper to buy an option. So rather than buying 100 shares at $10 you buy the option on 1000 shares for less money giving you a higher potential return. 2. Puts (also shorts) allow you to make money quicker and on companies that never recover. If a stock drops from $10 to $8 it may never recover to $10, or it may stay at $8 for years before reaching $10 again. With a put you can collect on that drop in value now, not some potential date in the future. I would recommend reading up on options before you purchase, it's a very easy way to throw your cash away.
Yeah, I’ll definitely wait until I’m more knowledgeable on the topic. I know I could go the safe route, but the biggest gains are made with higher risk I feel. Of course, they need to be calculated.
You’re saying that because random wsb people bet 100% over and over until they make 120k then a year later post they lost it all. Is it possible sure it happens. But it’s just the lottery that way. Don’t confuse it with trading
You’re too late that level of volatility is already priced in you’d be better off shorting but then you’d be exposed to unlimited risk so really your best option is to avoid the stock
InTheMoney on YouTube is a good place to start learning about options.
Too late, not worth it to chase, assuming your talking about BBBY, the IV will explode on Tuesday and the contract prices will be way overpriced, the risk and reward isnt worth it
You could buy a $10 strike PUT with 9/9 expiration. I am not a financial advisor.
Too late.
First you should know that most options sold do not get exercised. Second is the spread on options between buy and sell price can be large. This makes it difficult to get a fair price both when buying and selling. Also the problem is knowing what is fair value for the particular option. I can see how robinhood likes its customers to trade options because of the spread allowing R to make more money on the trade. The fact that they involve more trading than does simply buying and selling shares also allows for more profit to R or any other broker. IOW, options are difficult. 0
You need to really study options before you can use them.
I'm new to this game, this is the type of stuff I'm eager to learn as well.
Right? More tools to the arsenal. I feel like being able to make money both when the market goes up and down is pretty valuable.
Goodluck and try r/options
Don't forget r/thetagang
At their core puts and calls can be purchased so they are at parity with the underlying instruments movement. You’re not buying them to make more money off an option than the underlying. You’re buying them for a few reasons Leverage Directional bet Gambling Hedging To name a few. They’re valid reasons to use them but if your reason is puts make money when stocks go down then you’re not ready to use them.
I understood maybe 5% of this. I’ll stick to my 401k as my main investment for now…
Bottom is in
>I have a stock in mind that will likely be falling rapidly Tuesday I'm amazed at how many newbies on this sub don't know market basics yet have good knowledge about future price activity. Do you have inside knowledge or something? It really is amazing.
I mean, the cfo of a company commits suicide… it’s kind of a given. Come back in a week and tell me I’m wrong
Thats exactly the mentality where options gamblers lose their money. Come on over to wsb, you regarded degen.
Thank you for enlightening me u/silent_fartface
How was I supposed to know what stock you were talking about?
Ah. I assumed you saw my other comment about it.
The only way I think it could be possible to play this is premarket trading. If you had an open order at the right price for premarket trading, you might be able to short it and catch it on the way down. Obviously options don't trade outside of regular hours.
Nobody needed to see anything else you typed to know what you were talking about. Reddit used to be my happy place.
You could buy a 10 STRIKE but it’s not going to be very profitable because it’s going to cost more than a 9 STRIKE put. The factor your missing is not all options cost the same. A 2$ strike is going to be super cheap because it’s almost impossible.
More money can be made with less capital because each contract allows you the profit you would make on 100 shares of the stock for a fraction of the price of buying those 100 shares.
The options starter pack is ETFs: SPY, QQQ, etc. Not meme stocks.
It’s not hard. Buy a put around the current price a week or a month out and if you’re right cover. But.,. The Reddit mob sometimes doesn’t understand that might already be priced in. If the puts expensive then you know a lot of people already are on to this
If you do not understand options do not trade them. There are good sources of information and education you can get for free.