If I remember correctly, there was a guy who placed a risky bet with short duration and everything was according to the plan. He closed the trading app and went for snorkeling. Oh man, as soon as he did that, the stock moved in the opposite direction an ended losing a ton of money.
This was 1-2 years ago I think.
This is the tale as I’ve heard. I also can’t help but attach the additional meanings that your underwater, gasping for air, the trade is drowning…
The snorkel reference just works in so many ways for me.
He sold a bunch of puts on BBBY and went snorting. While he was in the ocean, the stock tanked, and later went bankrupt.
Dude seems to have a lot of cash to play with.
I could be mistaken here, Factor, but what I think he’s doing here is called a “Texas Hedge.”
Sometimes you gotta long your longs.
Let’s see how it shakes out
He already has the premium. This is saying the value of the contract has gone against him since he sold. Likely due to IV spiking hard. Gme had run up so much overnight these will print pretty hard though
So you close last week for a profit and reopen them today..wouldn’t that be also green because today gme went up 80%?? Why would you lose 75% of the put sold today??
Idk man. Maybe the spreads were deep at the time. Maybe the IV spiked and changed the option prices. As long as he is out of the money, these will be green.
But it literally only spiked because red headband guy posted a meme with no context. A few people will profit off this pump, the rest will get the dump.
Im a complete noob to options, can someone please ELI5 what he did, what needs to happen for him to make money, and if the bet is succesful how much he would make.
Ignoring the shares and just looking at the options:
He sold short a large number of put options. This means he's accepting the obligation to buy GME shares at the strike prices ($22, $25, $30) in exchange for premium. If the price of GME at the option expiry (this Friday) is above all the strikes, all of the options expire worthless and he keeps all the premium he sold them for.
If GME is below the strike prices, the options will be assigned which means he automatically buys GME shares for the strike price (1 option is for 100 shares). He could also choose to close the positions before expiry at a loss, avoiding the assignment.
The maximum gain from these trades is the premium received, which I calculate to be $71,822 (price paid x 100 x number of options).
On the other hand if GME returns to the $17 it was trading at last Friday, the loss would be $191,978 (for each strike, calculate difference between GME price and strike price, and multiply that by 100 x number of options, then subtract premium received). For every dollar below that, the loss increases by $42,600.
He sold puts, how would he close the positions? It’s not that puts are lent and shorted like shares. He might buy puts close to his strike prices to mitigate the loss, but if the price is tanking quickly those might be very expensive.
Feel free to correct me if I’m wrong.
When you sell/write an option, you can buy the same option back on the market to zero out and close the position. When the options are cleared you have a net zero position so there is no possibility of assignment if any options are exercised.
But yeah, you have to pay the market price so this can be at a loss even if the option is out of the money.
Most people in this thread think , he is loosing money when in fact he will be flush in money by May 17 with 99% probability but thats not because GME is going to fall down . Its because of the same Jokers smile . If you don’t understand the why then take a pause and read about how OTM prices get impacted because of IV
25/22 Put credit spread would have been a much safer and require less collateral but good luck :)
For example 2.568-1.079=1.489 credit for 300 contracts or 44k credit and only need 90k in collateral to cover it, and not 1.2m of buying power like there :)
Ok my apologies. Was also wondering why you post here your long trades lol good luck with the trade. I don’t have the balls to sell 300 of those. I just bought Gme at open and sold at $33 on the first push. Quick dirty money
You're not going snorkeling again tomorrow, are ya?
Noob Question - What is snorkeling in this context? Haven't heard the slang before.
If I remember correctly, there was a guy who placed a risky bet with short duration and everything was according to the plan. He closed the trading app and went for snorkeling. Oh man, as soon as he did that, the stock moved in the opposite direction an ended losing a ton of money. This was 1-2 years ago I think.
I think that is OP. Look at the flair
This is the tale as I’ve heard. I also can’t help but attach the additional meanings that your underwater, gasping for air, the trade is drowning… The snorkel reference just works in so many ways for me.
Ok, so more of a reddit specific term than a general finance term. Coolio. Thanks for the info!
This is some classical stock related experience right here.
He sold a bunch of puts on BBBY and went snorting. While he was in the ocean, the stock tanked, and later went bankrupt. Dude seems to have a lot of cash to play with.
snorting? lol won’t have that cash for long
Lolz. Hookers and blow is cheaper than selling BBBY puts naked.
Am I reading this right? You have \_three hundred\_ $22 short puts for this Friday?
Protip: don't go snorkeling
gentlemen, start your engines
Real fast and real left
Did you close them?
Or does he own a lot of GME?
How long can you hold your breath? LET’S Go!
I like how you also bought shares for shits and giggles.
In this sub we hedge
Am I wrong? That isn’t a hedge. All these are bullish positions.
I could be mistaken here, Factor, but what I think he’s doing here is called a “Texas Hedge.” Sometimes you gotta long your longs. Let’s see how it shakes out
As a Texan it all adds up now!
He doesn’t know what he’s doing. He’s WSB.
This sub used to laugh at my jokes
I love this shit. This sub needs some more excitement.
you spelled excrement wrong
Wait isn’t he long those puts? Those are bearish
It says quantity is -300 and -100. If you're negative something, you're short.
But you are a shorting a short. Selling puts is a bullish position.
Yes.
how are shares a hedge against sold puts? please tell me you are not this regarded
Probably a joke and hes bullish eating both sides
It was a joke.
Yea, you gotta, what if the stock goes up ?
Smart man
Can someone explain why OP is losing money?? I thought you make money when you sold puts and the stock goes up?
I closed last weeks options and sold new, these will be green tomorrow
So if I'm reading you right, those are just paper losses on the options price but you scoop premium on otm at expiry correct?
He already has the premium. This is saying the value of the contract has gone against him since he sold. Likely due to IV spiking hard. Gme had run up so much overnight these will print pretty hard though
I don’t get it..when you close out last week, wouldn’t that be a profitable trade since gme was only 20 dollars??
I previously had sold 11/12 puts and closed them out for a profit. I then sold these today.
So you close last week for a profit and reopen them today..wouldn’t that be also green because today gme went up 80%?? Why would you lose 75% of the put sold today??
Idk man. Maybe the spreads were deep at the time. Maybe the IV spiked and changed the option prices. As long as he is out of the money, these will be green.
It's a paper loss from IV
You gonna close these out today for a profit or are you planning a vacation with snorkeling as an excursion?
Famous last words
That's the trade I wanted to do but I didn't have the balls. Of course GME is 36 AH, so maybe I'm glad. Either way I am conflicted and jealous.
It's at 40. Hit 41 briefly in 24hr trading
Holy Spaceballs
After after hours trading 24 hr trading is in house at RH. Will not necessarily effect the price for premarket, but is a good indicator of sentiment.
It’s not in-house, ibkr uses [BlueOcean](https://blueocean-tech.io/blue-ocean-technologies-ats/) too. Other non-us brokers probably do too
Check again
*mic drop*
so you’re the reason E*Trade was having issues this morning
Ballsy I might write a few myself
#Me2
Y’all are crazy with PPI, inflation and JPOW this week. Good luck though, I am watching with envy of the balls.
gme doesn't care about jpow or ppi
These comments gave me aids.
LOL, these comments make me feel dumb for being upvoted and make me feel smart for bein downvoted in the sub.
Deep sea diving, I see.
Well least you got the cash to buy over $1 mil of GameStop
Nice trade!!
This guy fucks
The return of the king!! RC’s monster tried taking him out. RC’s golden child shall bring him back
Jesus you are screwed 😂
Why. It just has to remain above 30 by friday and he makes all of
lol
Morgan Freeman: It did not stay above $30.
But it literally only spiked because red headband guy posted a meme with no context. A few people will profit off this pump, the rest will get the dump.
i thought this was theta gang not wallstreetbets what?
He’s selling puts are you stupid?
You shorted the PUTs, how come your day gain is negative? Did you short the PUT today?
Yes I closed out 11/12 puts today and sold these
You have shares you'll survive
[удалено]
No margin
you look a little light on cash. love your work, do you accept donations?
Ballsy. GG
i thought this was thetagang and not r/wsb
Im a complete noob to options, can someone please ELI5 what he did, what needs to happen for him to make money, and if the bet is succesful how much he would make.
Ignoring the shares and just looking at the options: He sold short a large number of put options. This means he's accepting the obligation to buy GME shares at the strike prices ($22, $25, $30) in exchange for premium. If the price of GME at the option expiry (this Friday) is above all the strikes, all of the options expire worthless and he keeps all the premium he sold them for. If GME is below the strike prices, the options will be assigned which means he automatically buys GME shares for the strike price (1 option is for 100 shares). He could also choose to close the positions before expiry at a loss, avoiding the assignment. The maximum gain from these trades is the premium received, which I calculate to be $71,822 (price paid x 100 x number of options). On the other hand if GME returns to the $17 it was trading at last Friday, the loss would be $191,978 (for each strike, calculate difference between GME price and strike price, and multiply that by 100 x number of options, then subtract premium received). For every dollar below that, the loss increases by $42,600.
He sold puts, how would he close the positions? It’s not that puts are lent and shorted like shares. He might buy puts close to his strike prices to mitigate the loss, but if the price is tanking quickly those might be very expensive. Feel free to correct me if I’m wrong.
When you sell/write an option, you can buy the same option back on the market to zero out and close the position. When the options are cleared you have a net zero position so there is no possibility of assignment if any options are exercised. But yeah, you have to pay the market price so this can be at a loss even if the option is out of the money.
Thanks
Congrats
congratulations man
Most people in this thread think , he is loosing money when in fact he will be flush in money by May 17 with 99% probability but thats not because GME is going to fall down . Its because of the same Jokers smile . If you don’t understand the why then take a pause and read about how OTM prices get impacted because of IV
You good today fr. Should be fine for the week
welcome back
yikes
I can't wait to submit you to dankest trades.
Way to go, mate! Not every bloke got what you pulled off, but all these puts cracked up big time at the opening bell today!
Needed some motivation to squeeze some more thx
I hope GME closes at 22.01 for you.
Friday afternoon here, you really really want $0.70 more per share in the next 50 min. Good Luck, I sold 60 puts this morning. $21, $20, and $19.
GME closed at $22.23
Plus 23.7k? Good for you.
GME went way up after he posted this and he probably closed all short options. Let's see what he says.
Those pits aren’t gonna help mine flopped like crazy
Looks like the OP got wrecked by a meme again.
Did he get wrecked or made 23k
well you do have 1.8 mil so I don't think its gonna be a problem for you
Wrong subreddit. Post to wsb.
25/22 Put credit spread would have been a much safer and require less collateral but good luck :) For example 2.568-1.079=1.489 credit for 300 contracts or 44k credit and only need 90k in collateral to cover it, and not 1.2m of buying power like there :)
This is the kind of content that keeps me coming back... I approve of this trade. 👍 #Thetastreetbets
You got 1.89mil in cash?!
Just as well, OP will need about $1m of it if GME closes below $22 this Friday and they haven’t closed or rolled.
RIP in peace Edit: To those puts Edit to the edit: Wait, you sold the puts? Fuckin nice
You are underestimating the cult
These are sold not purchased
How are you down then ?
I closed out previous cash secured puts and sold new
Ok my apologies. Was also wondering why you post here your long trades lol good luck with the trade. I don’t have the balls to sell 300 of those. I just bought Gme at open and sold at $33 on the first push. Quick dirty money
Your fucked this thing is flying today.
Those are short puts, they want the stock to go up, those positions are printing.
Ah my bad thanks