CSK can just bite me.
Yeah, Thanks IronMan. I likely would’ve never put myself in your place to begin with, but lord knows I will never do what you did after this thread, no matter how good I think the trade will be. I’ll stick to being the guy on the other side of the trade; limited losses, unlimited gains.
I love this thread. Options are funny things: you go short, you have a small chance to lose big and a large change to gain small; you go long, and you have a small chance to win big and a large chance to lose small. They are also pretty poor instruments if you want to have a play on a price direction of the underlying. Not only you have to be right about which direction the stock will go, you also have to be right about timing and speed. I also love how IronMan fell into every single trap. It is so much fun after reading his comments in other threads.
But at least he’s playing the game and learning - better to make all the mistakes in one go than to string them out over a career!
chrismaths Wrote: ------------------------------------------------------- > But at least he’s playing the game and learning - > better to make all the mistakes in one go than to > string them out over a career! Yeah like a friend of mine who is a bit overleveraged on housing (Aussie…so its not as bad as the US) says… I don’t mind taking this risk because I’d much rather go bankrupt when I’m 25 and learn my lesson rather than go bankrupt when I’m 45 and don’t have time to recover! and yes…props to IronMan for staying with the thread and being open to discussing it…
props to ironman on an expensive education here, but this whole thread still doesn’t make me averse to writing puts. GOOG closed 310. options expiration is next friday. good shot it does expire, if not, then you he would’ve bought GOOG at 296 or something. i think the moral of this might be don’t write puts if you’re leveraged to the point where you don’t have the funds to buy the underlying and you’re putting your back up against the wall as soon as the stock starts moving in the other direction. if he wasn’t forced by margin calls to close it out early, good shot he could’ve/would’ve made the $410 bucks. small reward for the obligation to maybe own about $30k of google, but i guess GOOG at a $296 entry point is more tempting than it was at $370 or whatever it was when he wrote the option in the first place. if i wrote this put and got assigned come this friday, i don’t think i’d be terribly upset about that px for GOOG in my portfolio.
So sell some of them now. They are selling for 8.50 or so. That means the market is placing significant probability on the idea that Goog could be 270 or 260 or … by Friday. So yes, Goog closed at 310 on yet another down 3+% day. This stock dropped 5% in the last hour of trading on Friday. This stock was at 280 on Thursday. Can you tell me you have any confidence at all that the 300 put will be OTM on Friday? I think you could still get crushed selling Goog 300 November puts (I’m not buying them either, btw).
Bump
These are 26 bucks or something now right? Goog is at 277 and looking dangerous.
chrismaths Wrote: ------------------------------------------------------- > But at least he’s playing the game and learning - > better to make all the mistakes in one go than to > string them out over a career! Definitely agree. Much easier to learn the hard way with small amounts of money than to make the same mistakes when you’re older and have a lot more capital at stake. Long on options near expiration is always a good way to shoot yourself in the foot. IronMan are you still in those contracts? GS and GOOG?
No he shut them down a long time ago. It’s in this thread somewhere. He covered Goog with GS puts and then closed that down pretty quick.
Sorry about this, but these options are $29. Goog at 259.
Thank God I closed out when I did or I’d be bent over right now.
how does one close a naked put option like this?
ancientmtk Wrote: ------------------------------------------------------- > how does one close a naked put option like this? You could buy shares of the underyling for each naked put (delta adjusted) you’re short, or just simply buy back the put. “Buy to Cover”
Buy shares?
Oops, meant sell.
Wow, I hope IronMan didn’t make that mistake with his broker. “OK, let me buy to cover those short puts” “uh, buy?” “Sure buy to cover” “OK, how many did you want me to buy?”