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24717945 No.24717945 [Reply] [Original]

>buy a stock
>the most I can lose is literally everything

>buy vertical spread call option
>the most I can lose is the cost of buying the option

>"options are more high risk"

What the fuck is this shit?

>> No.24718012

>>24717945
>the most I can lose is the cost of buying the option

Sounds like everything to me, retard.

>> No.24718035

>>24717945
>stocks = up to a maximum of 100% loss

>buying a losing option = always a 100% loss

>> No.24718056

>>24717945
if normies lose too much on options we'll have the sec fucking shit up. most of the people saying options are scary are just trying to prevent that and keep premiums reasonable

>> No.24718203

>>24718012
>>24718035
>think TSLA is going to go up
>spend $627,000 buying 100 shares of TSLA
>stock drops 10%
>lose $62,700

>think TSLA is going to go up
>spend $6000 for the option of buying 100 shares of TSLA
>stock drops 10%
>lose $6000
>stock drops 50%
>still lose only $6000
>stock loses 99% of its value
>still only lose $6000
>stock gets delisted and Elon Musk is executed
>total loss on my end: $6000

>> No.24718238

>>24718203
yes but
>stock drops 10%
>next month stock goes up 5%
>month after that stock goes up 15%
>you are now up 10%

>> No.24718393

You realize options have expiration dates right?

>> No.24718463

>>24718393
this, you are trying to guess the direction the stock is going to go and have a limited timeframe for it to happen.

options are risky. i think certain memestocks like tsla have given a bunch of inexperienced traders a warped view of option trading,

>> No.24718585

>>24717945
Buy index funds of the sp500 or total stock market. Basically impossible to go to zero. And historically it's only dropped at most about 60% and recovers on avg less than 5 years

>> No.24718626

>>24718203
You're looking at this wrong.
>spend $6,000 for the option of someone else buying 100 shares
>stock goes up 10%
>your break even price is not met and expiry date rolls over
>you lose money
You're putting 6k at risk in the options case and 627k at risk in the stock example. You could choose to put 627k at risk on options and lose it all, or choose to put 6k at risk in the stock example

>> No.24718650

>>24718203
Lol

>> No.24718698

>>24717945
some options you can lose more than everything. if you buy a short you can lose more than you put in if it goes up high enough.

you can put a stop loss and sell it at a certain price point to stop your losses. But realistically the stock market is where the very big fish play. You are up against people who transact faster than you, have the best and brightest minds, and the trading platforms all take a piece of the pie the whole way through.

>> No.24718728

>writes call
>gets direction wrong
>goes bankrupt

>> No.24719172

>>24718203
You fucking IDIOT

>> No.24719353

>>24719172
That's literally how buying calls works.

>> No.24719434

>>24718203
this is priced in to the value of the contract fren
if you have thinkorswim installed you can compare different strategies with options and stocks and see for yourself how it works. It's in the analyze tab, try it out.
there is no free lunch in finance

>> No.24719450
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24719450

>>24717945
Don't fuck with stocks while crypto can still give you 1,000% returns in 6 months.

ARPA + Bella Protocol, anon. Dig deep. Accumulate for 6 more months.

>> No.24719796

What's the issue with buying options that you actually plan on executing. If you have faith in a particular company and are willing to wait you can invest a certain amount to get a nice discount later down the line and you don't gotta actually have money held up in actually purchasing the stock until the stock is about to execute and so you have money free to invest in other investments while you can sit on those options. Any arguments against this?

>> No.24719820

>>24719434
I love thinkorswim and how it pulls back the curtain on options. Too bad it doesn't have Robinhoods little green line though.

>>24719450
Whoa man, fucking awesome. Got some white papers to read. Thanks. Just when this place seems dried up, now I remember why I keep coming back.

>> No.24719866

>>24718728
Ok nobody is that retarded