/biz/ - Business & Finance

Who here /not holding a single piece of AAPL/?

>>19275381
Jerome coming back from lunch break.

>>18115744
Put SPY 200 4/3 or SPY 4/3 200p

Option: You go for a put. The right to SELL a stock at a certain price to someone.
Stock: SPY
Strike price: 200$. You gain the right to sell 1 SPY at a price of 200$.
Date: The date when the option expires.

What does that mean for you:
Lets say you bought this option for 3$.
So if the SPY goes to 196$ on the 3rd of April, you could sell it for 200$. A profit of 4$ Minus the 3$ investment.
If it goes to 194$ you would make a profit of 6$. Minus the 3$ investment. A profit of a 100%.

Now there are the Greeks. Lets say the Spy goes down to 201$ an hour after you bought the option.
Can you exercise it? No.
But: The price has already risen a lot because the option has a time value. The option is worth more, if the experation dtae is further away. You can already sell the option for a great profit.

Nobody exercises options btw. We buy them and sell them. Exercising them makes no sense because even on their last day they have a time value.