/biz/ - Business & Finance

[Anonymous No.17681298]

Am I actually missing out on all these opportunities to make millions in an afternoon doing weird WSB tricks with puts and calls and etc? I hear this shit happening occasionally but I figure it's the same selection bias bullshit that goes on when you hear about a guy who 10000x's his money pulling a 100x leveraged short on bitcoin at the right microsecond and I'm just not hearing about the 99% of traders who tried the same thing and got liq'd.

Am I right or wrong? Are normie-tier reddit fags all getting hilariously rich on robin hood right now while I've got my thumb up my ass? I've got 75k link and basically stopped tried to swing or trade shit at all anymore.

[Anonymous No.17681312]

stopped buying crypto and started buying options. return is great if you’re not a fucking idiot

[Anonymous No.17681318]

>>17681298
anon most people are just roleplaying like they actually trade

[Anonymous No.17681326]

>>17681298
From what I've learned from my own research and being on this board and r/wallstreetbets for 3 years is that most of these fuckers are just gambling. Unless you are trained in this field, and actually have some sort of algorithm or autism, you're likely to lose more money than you gain when using leverage.

[Anonymous No.17681334]

>>17681312
How is it different from any other kind of trading where there is always a loser, always a winner, the house always takes its cut and 98% of traders aren't long term profitable?

I think I'm smarter than the average retail normie but I wouldn't fool myself into thinking I'm some elite financial genius.

[Anonymous No.17681341]

>>17681298
Wait until 2 months of sideways or you're gonna get burned. All in low cap shitcoins, today. Ferrum is a good one.

[Anonymous No.17681361]

>>17681298
I got into stocks a month and a half ago. Currently a student so I only deposited 1K into RH. Other than how volatile the market’s been the last two weeks I’m doing okay, been up well over 10% in gains at points. I don’t know anything about calls and puts I just go crazy with research in my free time and just wait. My best investment so far has been shorting SPCE at $18. Waiting on INO and AMD to really pan out so I can really make it.

[Anonymous No.17681371]

>>17681298
Options are basically liquid insurance. You'd normally want to be the one selling the insurance, not buying it. Right now, for example, premiums are insane since we've got peak IV.
What the folks at WSB do is buy shitloads of short term insurance, and hope for a big swing. It's basically gambling.

[Anonymous No.17681372]

>>17681334
idk man. it’s all just luck I guess but you can double your money weekly if you just watch trends and pay attention to what’s down/up on a certain day and don’t get fucked on premiums

[Anonymous No.17681496]

>>17681372
What's your largest loss compared to largest gain?

[Anonymous No.17681580]

>>17681298
Options can definitely return faster than crypto pnds, but you have to hunt for underpriced (low-IV) options on stocks that are likely to go up. I made a bundle on SPCE, for instance, because WSB was hyping it up and causing it to moon. 4xed money easily. But the opportunities are few and bets often fail. Meme stocks with promising DDs are good plays. So...Informed gambling.

[Anonymous No.17681588]

>>17681371
>premiums are insane since we've got peak IV
See I don't know shit about stonks. The fuck is IV? Is it like funding rates you pay when you're riding leverage on bitmex?

>>17681372
>just watch trends
sounds generic. Isn't everyone else by definition watching trends too, if they're playing in the stock market? Why should I presume I have any special information at my command? The only reason I have a fat stack of LINK is because I scooped it all up in 2018 when I had a firm belief that I'd stumbled upon information that none of the rest of the crypto market was privy to yet (thanks to breadcrumb threads on /biz/). I don't have access to anything like that for stonks.

[Anonymous No.17681611]

>>17681580
How do options differ from leveraged long/shorts? Is their risk/reward profile any better? Is there not always a winner and a loser to every trade made on options, and if so, how is it any better than just buying a thing and hoping it goes up (or shorting a thing and hoping it goes down)?

[Anonymous No.17681675]

>>17681611
the key difference with options is it lets you take advantage of people's greed more than trading other instruments. you just have to tap into your inner jew. spent all last week studying options before coming to this understanding, and i'm up 400 bucks so far

[Anonymous No.17681693]

>>17681611
Options are basically stocks leveraged 100x with a limited max loss and limited lifespan. You potentially get the payoff of buying stocks with 100x your investment. It's even more leveraged than typical leveraged stock trading, but with a max loss.

Yes, there's a winner and loser in every trade - whoever sold you the option.

Basically, if you want to gamble on the directions of stocks, you trade options (or leveraged ETFs).

[Anonymous No.17681715]

>>17681588
No, it's implied volatility, it measures the volatility in both directions of the asset measured. It gives you an idea of how likely the price of the asset is likely to change drastically.

[Anonymous No.17681735]

>>17681298
Basically you need to get into oil stocks (halliburton, SLB, etc.) Asap while they are tanked.

[Anonymous No.17681743]

>>17681675
>spent all last week studying options before coming to this understanding
Where's a good place to start, and what do you use to trade?

[Anonymous No.17681763]

Am I an idiot for thinking nothing can go wrong with going balls deep on calls with a 2 year expiration date once this market bottoms? I really don't see any way the stocks don't recover considering the underlying businesses are still the exact same albeit with an extremely temporary supply chain shortage. The absolute worst case scenario is a year long bear market until the vaccine comes out. I'm fully prepared to lose everything but fuck opportunities like this come around maybe once a decade.

[Anonymous No.17681810]

>>17681743
I trade with schwab, was about to use robinhood but thankfully they exposed themselves as incompetent retards before I moved any money over. off the top of my head, this guy helped a lot https://www.youtube.com/user/tradersfly

[Anonymous No.17681833]

>>17681298
Many of the WSB traders are getting crushed today.

The WSB playbook:
>sell deep oom puts to get cash
>there's no way this stock is going to drop 20% in the next month, man this options thing is just ez money
>use cash to buy dirt cheap oom moonshot calls on meme tier stonks like NVDA or TSLA

98% of the time both the call and the put expire worthless so the idiots just fire again. 1% of the time the stock actually moons for some reason and they post robinhood screenshots. And the last 1% of the time is what we just witnessed last week. Those "foolproof" puts that they wrote are now in the money and the WSB people are on the hook to buy 10000 shares of whatever meme stock.

[Anonymous No.17681860]

>>17681833
>oom puts
what is an oom put? it's all greek to me.

[Anonymous No.17681918]

>>17681860
i-i-i-is that a pun on the Greeks?
https://en.wikipedia.org/wiki/Greeks_(finance)

If not, OOM means "Out of the Money", aka a put option lower than the current stock price.

Buying a put option costs money, but it gives you the right to sell a stock at X price. Selling a put option will earn you money, but now you have the obligation to sell the stock at X price.

If you own a put option at $100 and the stock's price is $70, you're a big winner because instead of selling at 70 on the market you can sell at 100 to the sucker who wrote/sold the option. If you're the schmuck who sold the put option, now you're forced to pay $100 for a $70 stock.

[Anonymous No.17681929]

>>17681860
https://www.tastytrade.com/tt/learn

[Anonymous No.17682011]

>>17681298
options by themselves are a major risk and reward
You can also use them to make shit tons of money on positions you own that move sideways.

[Anonymous No.17682037]

>>17681298
you can buy crypto options
it's just as stupid as in traditional markets

ofc some people make big money (most are prob just robinhood insiders posting to reel in dumb money) but 99% of positions are losers

[Anonymous No.17682044]

>>17681810
Thanks a lot anon

[Anonymous No.17682058]

>>17681693
An important difference for us biz fags from crypto: lack of wick liquidation

[Anonymous No.17682102]

>>17681371
This.
Options used properly are a form of insurance, where the option writer assumes an obligation for the benefit of the holder, and collects a premium for doing so.
To flip it around, you can think of your home owner's insurance as a "put" option on your house.

[Anonymous No.17682174]

>>17681763
Yes, options decay daily. It is called theta decay, as the time of your option decays, you lose money. A 2 year + call option will have a HUGE premium and will lose money every single day.

So say you want to buy a 2 year contract on X. X currently trades at 100$. The premium on such a contract depending on IV could be ~30-40$ if you are buying the 100$ strike price. So you’d need your stock to hit 140$ to BREAK EVEN. It is not free money in the slightest.

[Anonymous No.17682355]

>>17681588
> I dont have any information about stocks
what is Google and what is the news? this maybe was a problem before information wasnt readily available at your fingertips.

[Anonymous No.17682399]

>>17681763
These are called LEAPS and are absolutely not a stupid investment idea. You see senators holding these. Get em on companies you believe in while they're cheap and the market is down.

[Anonymous No.17682441]

>>17682355

it's the same information everyone else has access to. I do not have special, priveleged insights into the stock market and I'm sane enough to acknowledge it.

>>17682399
>>17681763

why wouldn't you just buy the stonk if you were long term bullish, instead of playing these smoke-and-mirror contract games?

[Anonymous No.17682517]

>>17682441
not him, but you could just buy the stock and sell covered calls to decrease your basis if you're bullish

[Anonymous No.17682535]

>>17682441
>why wouldn't you just buy the stonk if you were long term bullish, instead of playing these smoke-and-mirror contract games?
This is what I want to know. What's the difference between buying calls and just going long?

[Anonymous No.17682557]

>>17682535
This pls

[Anonymous No.17682560]

>>17682441
>>17682441
> it's the same information everyone has access to.
stonk company a announces new groundbreaking tech
> buy calls
stonk a is not paying its debts, filing for bankruptcy and is going out of business and or anything negative that you think will affect price.
> buy puts
it's that easy

[Anonymous No.17682654]

>>17682560
>> buy calls
>stonk a is not paying its debts, filing for bankruptcy and is going out of business and or anything negative that you think will affect price.
>> buy puts
>it's that easy

But what is the difference between replacing "calls" with "long", and "puts" with "short"?