Quantcast
So Ya Wanna Know About Options - The Basic Basics (Part 2) - Beyond.ca - Car Forums
Results 1 to 16 of 16

Thread: So Ya Wanna Know About Options - The Basic Basics (Part 2)

  1. #1
    Join Date
    May 2008
    Location
    Wildflower Ranch
    My Ride
    Neo-Liberal Anarchist Mobile
    Posts
    2,245
    Rep Power
    38

    Default So Ya Wanna Know About Options - The Basic Basics (Part 2)

    Look. I am here to save yaw by telling yous the truth. Survivorship bias may mean that you ain't broke yet, but we all know that there are some Ralph Wiggums in this group.
    Imma make this in simple terms that you can understood.

    Name:  giphy.gif
Views: 209
Size:  1.39 MB

    The Basic Basics

    BID - The dollar figure you yells out at yo' ho to get in your lifted truck
    ASK - The dollar figure ya ho hollas back at you from in front of the Spaghetti Factory
    SPREAD - The marmalade in between
    OPTION - The right, but not the obligation, to kick yo ass when you come into my domiciliary to steal my 3-ply
    PREMIUM - The cost of the option
    STRIKE - The fixed price at which the option can be exercised
    EXCERCISE - Nothing yo fat ass would know about

    Options are "simple". Like jerkin' off, there are two main tools to do it - ya right hand (CALL) and ya left hand (PUT). You can make is as complicated as you want like going inverted, ghost, or asking Aunt Becky to helps ya. You can go LONG, like when Aunt Becky shows up, or SHORT when Uncle Jesse pinch hits after hearing your voice mail on the Katsopolis answering machine.

    LONG CALL - You BUY a CALL OPTION thinking that Aunt Becks shows up (you think stonk price increases)
    LONG PUT - You BUY a PUT OPTION thinking that Uncle Jesse shows up (you think stonk price decreases)
    SHORT CALL - You SELL a CALL OPTION thinking that Uncle Jesse shows up or almost nothing happens
    SHORT PUT - You SELL a PUT OPTION thinking that Aunt Becks shows up or almost nothing happens

    I says "almost nothing" because the goal of the SHORT positions is to pocket the premium. The goal of the LONG positions is for the market value of the OPTIONS to exceed the STRIKE + PREMIUM.

    LONG CALL example: You paid $100 to buy TSLA 500 CALLS expiring this Friday because you are dumb af. Since the Strike is $500, and you are LONG CALL, your breakeven is $600 ($500 STRIKE + $100 PREMIUM). The most you can make is infinity, the most you can lose is $100.

    Scenarios on Friday:
    1) TSLA Stonk Price is $601, you make $1 ($601 PRICE - $500 STRIKE - $100 PREMIUM)
    2) TSLA Stonk Price is $599, you lose $1 ($599 PRICE - $500 STRIKE - $100 PREMIUM)
    3) TSLA Stonk Price is $500, you lose $100 ($500 PRICE - $500 STRIKE - $100 PREMIUM)
    4) TSLA Stonk Price is <$499, you lose $100 (Option not exercised unless yous a retread)

    Name:  LC.jpg
Views: 205
Size:  13.0 KB

    SHORT CALL example: You sold TSLA 500 CALLs expiring this Friday for $100 cuz you think you smart or sumthin'. The most you can make is $100, the most you can lose is infinity.
    1) TSLA Stonk is $601, you lose $1 ($100 PREMIUM - $601 PRICE + $500 STRIKE)
    2) TSLA Stonk is $599, you make $1 ($100 PREMIUM - $599 PRICE + $500 STRIKE)
    3) TSLA Stonk is <= $500, you make $100 ($100 PREMIUM - $500 PRICE + $500 STRIKE)
    4) TSLA Stonk is ∞, you lose ∞ less $100 ($100 PREMIUM - $∞ PRICE+ $500 STRIKE)

    Name:  SC.jpg
Views: 207
Size:  65.8 KB

    These are the simplest of charts. Charts will have more lines than a disco bathroom once you start combining options. Then you realize that there are no lines - more on that in the future.

    Name:  giphy.gif
Views: 202
Size:  523.1 KB
    Quote Originally Posted by 89coupe View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Beyond, bunch of creme puffs on this board.
    Everything I say is satire.

  2. #2
    Join Date
    Oct 2008
    Location
    Calgary / AB
    Posts
    110
    Rep Power
    0

    Default

    Somebody spending too much time at WSB and being a wannabe here. Get out.

  3. #3
    Join Date
    Jul 2006
    Location
    Victoria Park
    My Ride
    '16 FoRS, '09 UZN215, '90 Z32, '15 Grom
    Posts
    4,132
    Rep Power
    64

    Default

    I always had the opinion that options are one way to play the stock market for those who don't have a lot of cash to trade. If you have $$$, I rather volume trade than play with options.

  4. #4
    Join Date
    Feb 2009
    Location
    Calgary
    My Ride
    Family Hauler
    Posts
    1,131
    Rep Power
    41

    Default

    Quote Originally Posted by Disoblige View Post
    This quote is hidden because you are ignoring this member. Show Quote
    I always had the opinion that options are one way to play the stock market for those who don't have a lot of cash to trade. If you have $$$, I rather volume trade than play with options.
    Not so. They are all a part of various strategies. Options definitely have the ability to make small accounts go big, or an even bigger chance of making them go to zip.

    Not sure if a regurgitated Investopedia page on beyond is where i'd go to learn about them....

  5. #5
    Join Date
    Jul 2006
    Location
    Victoria Park
    My Ride
    '16 FoRS, '09 UZN215, '90 Z32, '15 Grom
    Posts
    4,132
    Rep Power
    64

    Default

    Quote Originally Posted by riander5 View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Not so. They are all a part of various strategies. Options definitely have the ability to make small accounts go big, or an even bigger chance of making them go to zip.

    Not sure if a regurgitated Investopedia page on beyond is where i'd go to learn about them....
    Thanks for telling me that's not my opinion :P

    "I always had the opinion that options are one way to play the stock market for those who don't have a lot of cash to trade. If you have $$$, I rather volume trade than play with options."

  6. #6
    Join Date
    Feb 2005
    Location
    calgary.ab.ca
    My Ride
    E90M3 510 Wagon
    Posts
    8,025
    Rep Power
    64

    Default

    Quote Originally Posted by Disoblige View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Thanks for telling me that's not my opinion :P

    "I always had the opinion that options are one way to play the stock market for those who don't have a lot of cash to trade. If you have $$$, I rather volume trade than play with options."
    You really are in a sassy mood today

    ...but yeah. Options can be used responsibly... one example below

    https://riabiz.com/a/2010/4/26/struc...tax-efficiency

  7. #7
    Join Date
    May 2008
    Location
    Wildflower Ranch
    My Ride
    Neo-Liberal Anarchist Mobile
    Posts
    2,245
    Rep Power
    38

    Default

    Quote Originally Posted by ee2k View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Somebody spending too much time at WSB and being a wannabe here. Get out.
    And you are?
    Quote Originally Posted by 89coupe View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Beyond, bunch of creme puffs on this board.
    Everything I say is satire.

  8. #8
    Join Date
    Jul 2006
    Location
    Victoria Park
    My Ride
    '16 FoRS, '09 UZN215, '90 Z32, '15 Grom
    Posts
    4,132
    Rep Power
    64

    Default

    Quote Originally Posted by ercchry View Post
    This quote is hidden because you are ignoring this member. Show Quote
    You really are in a sassy mood today

    ...but yeah. Options can be used responsibly... one example below

    https://riabiz.com/a/2010/4/26/struc...tax-efficiency
    No more posting for the remainder of the day. Peace, lol.

  9. #9
    Join Date
    May 2008
    Location
    Wildflower Ranch
    My Ride
    Neo-Liberal Anarchist Mobile
    Posts
    2,245
    Rep Power
    38

    Default

    Quote Originally Posted by ercchry View Post
    This quote is hidden because you are ignoring this member. Show Quote
    You really are in a sassy mood today
    So much sass on here.

    - - - Updated - - -

    Quote Originally Posted by riander5 View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Not so. They are all a part of various strategies. Options definitely have the ability to make small accounts go big, or an even bigger chance of making them go to zip.

    Not sure if a regurgitated Investopedia page on beyond is where i'd go to learn about them....
    Of course! Do you want me to go into more advanced strategies right off the bat? Why don't you take a shot at it?
    Quote Originally Posted by 89coupe View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Beyond, bunch of creme puffs on this board.
    Everything I say is satire.

  10. #10
    Join Date
    May 2008
    Location
    Wildflower Ranch
    My Ride
    Neo-Liberal Anarchist Mobile
    Posts
    2,245
    Rep Power
    38

    Default

    Quote Originally Posted by Disoblige View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Thanks for telling me that's not my opinion :P

    "I always had the opinion that options are one way to play the stock market for those who don't have a lot of cash to trade. If you have $$$, I rather volume trade than play with options."
    The thing with options is that you can mold your risk-return profile into any way or shape that you want. A higher risk profile can provide levered returns - if you are successful. The trade off is complexity.
    Look, I'm not trying to spread the gospel or anything. It's none of my business what you want to do with your money. Simply knowledge sharing and self entertainment das all.
    Last edited by The_Rural_Juror; 11-26-2020 at 05:14 PM.
    Quote Originally Posted by 89coupe View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Beyond, bunch of creme puffs on this board.
    Everything I say is satire.

  11. #11
    Join Date
    Feb 2005
    Location
    calgary.ab.ca
    My Ride
    E90M3 510 Wagon
    Posts
    8,025
    Rep Power
    64

    Default

    It would be nice to have a serious conversation about these things, especially with the current rise in popularity. Get buster in here to mansplain risk adjusted returns and the like. Really drive home bankroll management... errr... I mean... uh... not gambling, but serious investor terms... uh... capital preservation???

    But yeah, something, something... not inherently evil... something else... use correctly

    But ego aside... leveraged anything can getaway from the best of us and one really needs a solid plan and the discipline to stick to it to make wise financial decisions. Pretty easy to get stuck in an eco chamber that reinforces bad practices, along with a short term streak of luck to really boost confidence and next thing... ya broke

  12. #12
    Join Date
    May 2008
    Location
    Wildflower Ranch
    My Ride
    Neo-Liberal Anarchist Mobile
    Posts
    2,245
    Rep Power
    38

    Default

    There are some tidbits here and there if you catch them.
    Quote Originally Posted by 89coupe View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Beyond, bunch of creme puffs on this board.
    Everything I say is satire.

  13. #13
    Join Date
    Sep 2014
    Location
    Airdrie
    My Ride
    6.2 / 690
    Posts
    179
    Rep Power
    0

    Default

    Can I just give you my money and you lose it for me? That seems like a lot less work than putting in the effort to lose it myself

  14. #14
    Join Date
    Jan 2008
    Location
    Upstairs
    My Ride
    Natural Gas.
    Posts
    13,332
    Rep Power
    100

    Default

    Quote Originally Posted by tcon View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Can I just give you my money and you lose it for me? That seems like a lot less work than putting in the effort to lose it myself
    E-transfer to me bro, I'll take care of you.
    Quote Originally Posted by killramos View Post
    This quote is hidden because you are ignoring this member. Show Quote
    You realize you are talking to the guy who made his own furniture out of salad bowls right?

  15. #15
    Join Date
    Feb 2005
    Location
    calgary.ab.ca
    My Ride
    E90M3 510 Wagon
    Posts
    8,025
    Rep Power
    64

    Default

    Quote Originally Posted by ExtraSlow View Post
    This quote is hidden because you are ignoring this member. Show Quote
    E-transfer to me bro, I'll take care of you.

  16. #16
    Join Date
    May 2008
    Location
    Wildflower Ranch
    My Ride
    Neo-Liberal Anarchist Mobile
    Posts
    2,245
    Rep Power
    38

    Default

    Quote Originally Posted by tcon View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Can I just give you my money and you lose it for me? That seems like a lot less work than putting in the effort to lose it myself
    Careful, you might just get $50 e-transfered to you.
    Quote Originally Posted by 89coupe View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Beyond, bunch of creme puffs on this board.
    Everything I say is satire.

Similar Threads

  1. So Ya Wanna Know Aboot Options (Part 1)

    By The_Rural_Juror in forum Real Estate / Finance
    Replies: 10
    Latest Threads: 11-23-2020, 03:26 AM
  2. Any IT guys that can give a NEWB some help with wireless internet basics?

    By Kona9 in forum Computers, Consoles, and other Electronics
    Replies: 10
    Latest Threads: 01-17-2008, 09:59 AM
  3. Good site to learn the basics of turbocharging

    By cressida_pimpin in forum Forced Induction Talk
    Replies: 2
    Latest Threads: 09-30-2006, 09:52 AM
  4. lost... tire basics 101

    By B2300mobile in forum Trucks, 4x4 and Offroading Zone
    Replies: 3
    Latest Threads: 12-31-2004, 02:33 AM
  5. Audi TT - The Basics

    By NOSescalade in forum Photoshop Gallery
    Replies: 4
    Latest Threads: 10-09-2004, 11:55 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •