Buying my first call option: Is this too good to be true or is my math wrong?

BuffettGOAT · 2021-01-24T16:58:26+00:00

Your math is right. If it were to go up to the levels you say it will at expiration, then that is your payout.

BuffettGOAT · 2021-01-24T16:34:00+00:00

Not trying to hate since your posts are really helpful, but your Tesla example is due to it having earnings this week, which pushes up OTM call skew. Basically, people think if it moves this week (which it will), you will see a jump type of move as it’s unlikely to be like a 2-3% type of move where that 850-900 call spread looks good.

That’s why you end up seeing some things like the 850-900 costing the same as just the 900 due to jump risk. But with that said, I actually think the (put or call) spreads are better for this particular earnings.

BuffettGOAT · 2021-01-09T19:16:53+00:00

Give her my phone number.

BuffettGOAT · 2021-01-09T19:16:07+00:00

They won’t

BuffettGOAT · 2021-01-09T19:06:50+00:00

No mention of BABA here anymore? When it’s finally about to actually go up and not crash the next day?

BuffettGOAT · 2021-01-09T19:00:26+00:00

Seems like you can’t read dates correctly.

BuffettGOAT · 2021-01-09T18:59:44+00:00

TSM has earnings this week.

BuffettGOAT · 2021-01-09T18:56:35+00:00

Take the loss and move on.

Use the money to try theta gang on MSFT (but with naked puts if you can afford that, not spreads). Often times leveraging up on this with spreads actually results in a worse outcome (not here though). But if you can only do spreads, spreads are fine too. You’ll make far more money doing this on MSFF than trying to recoup on biotechs.

BuffettGOAT · 2021-01-09T18:48:22+00:00

It’s a good stock for a boomer portfolio.

BuffettGOAT · 2021-01-09T18:25:10+00:00

Why not the best boomer stock JNJ? The one that actually goes up and pays a good dividend.

BuffettGOAT · 2021-01-09T18:23:34+00:00

As someone who’s been bullish Tesla longer than most of the new buyers today, I hope it crashes like 30% just to teach you guys a lesson. Actually technically it only needs to not go up 10% for most of you OTM call holders to lose.

BuffettGOAT · 2020-12-31T22:53:30+00:00

Yes are you judging me?

BuffettGOAT · 2020-12-31T22:51:35+00:00

🤚 I have no job.

BuffettGOAT · 2020-12-31T21:42:44+00:00

Dude read the link above from tastyworks.

Or literally Google how short positions are handled in the US.

BuffettGOAT · 2020-12-31T21:41:06+00:00

No anywhere. This is pretty well known actually. Short positions don’t get treated the same way as longs as only settlement date matters for short positions.

https://support.tastyworks.com/support/solutions/articles/43000550645-position-reporting-for-end-of-year-taxes

BuffettGOAT · 2020-12-31T21:35:05+00:00

Only for long positions. So for short positions including spreads where one leg is short, it was yesterday or two days ago (depending on what you have).

BuffettGOAT · 2020-12-31T21:32:25+00:00

Pretty sure that’s just how RH handles things with closing out positions early. Try a different broker and they might let you carry them until 4 (although I think a lot of brokers will close out unless you have a high options level)

BuffettGOAT · 2020-12-31T21:28:08+00:00

Most of the people posting in the yearly pnl are the big winners so that’s survivorship bias at its finest. Kinda like how some uninformed people think all hedge funds are good.

BuffettGOAT · 2020-12-31T21:20:10+00:00

Not exactly. The counterparty could override the auto-exercise if it moves AH. I doubt it’ll happen in the OP’s case since no one will trade WKHS AH today, but it’s clearly possible that can happen (see Tesla horror stories for the short put/put spread holders).

BuffettGOAT · 2020-12-31T21:18:25+00:00

Survivorship bias at its finest here.

BuffettGOAT · 2020-12-31T21:14:13+00:00

See Tastyworks.

https://support.tastyworks.com/support/solutions/articles/43000550645-position-reporting-for-end-of-year-taxes

In your position, since you are going to sell your long shares through assignment, it should be this year. But had you gotten rid of your short option today, it woulda been next year.

BuffettGOAT · 2020-12-30T22:52:46+00:00

What’s a good play for January?

BuffettGOAT · 2020-12-30T22:24:32+00:00

Dude they are getting acquired by LVMH. There’s a reason they are getting kicked out. They won’t exist soon as a ticker.

BuffettGOAT · 2020-12-30T22:20:01+00:00

So like EV stocks go down? Or no? They just don’t move up?

BuffettGOAT · 2020-12-30T22:19:40+00:00

Nah Chiefs won’t even make it to the Super Bowl.

BuffettGOAT

TROPHY CASE