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/biz/ - Business & Finance

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13862313 No.13862313 [Reply] [Original]

Can someone explain calls and puts to my retarded ass?

>> No.13862334

>>13862313
Let me explain something else about them. Do not get into it if you do not hold the underlying asset.

>> No.13862373

>>13862334
Thats a call right? If you dont hold the security then a call has limited upside and unlimited downside?

>> No.13862411

Imagine a contract that you could sign that gives you the option to trade a stock at a specific price in the future. You can exercise that contract at any time and purchase the shares OR you can sell the contract for more than you bought it.
Because the the contract is just the right to purchase it only costs a fraction of what a normal share would cost. But you have to purchase a minimum anmount (normally 100) this means your are exposed to owning 100 shares for only a small investment. But watch out for theta because as time goes on it’s less likely your options will be profitable so the market price decreases. Also because they are just options if the price doesn’t reach the option you own then the contract is worthless

>> No.13862460

>>13862373
They're both used for hedging your asset to the right price. If you're thinking about bitmexing/getting into crypto options to make money, honestly just don't. And obviously don't play with options in the stock market, because thats exactly what its gonna be - playing. There are teams of quants with physics PhDs building models on how to profit frpm it, you're not gonna beat them.

>> No.13862468

>>13862411
Interesting, thank you anon. I will go research about theta I didnt realize that.

>> No.13862487

>>13862313
You CALL me, come over and I PUT my dick in your butt

>> No.13862528

>>13862468
Sure thing

I use a tool like this https://www.optionsprofitcalculator.com/

>> No.13862598

Don't use it to gamble its only for minimizing risk really. Say you manage a hedge fund. You want to invest a lot of money in Nvidia because you know it will moon, but if it drops too much you will go out of business. You will buy a put option that for a premium will give you the right to sell Nvidia at some price per share, so if it drops a lot you won't go out of business.

>> No.13862618
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13862618

>>13862460
>you're not gonna beat them