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/biz/ - Business & Finance

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57701253 No.57701253 [Reply] [Original]

anyone here has no idea how the fuck options work?

too convoluted. all i know is you can get liq'd and end up with 0 or even howe money = do not want

this sounds retarded. its better to buy bigger amounts of shares, hold the stock for a long timer and make it. at least you cannot get liquidated

all the gamblers that do options would be rich if they just boughted and holded tsla, nvda, mstr, mara, or any other cool stock but no, you had to do options weird shit, you had to gamble for smoke and mirrors weird contracts on some dodgy platform, you haad to fucking gamble instead of stacking up shares and riding the waves.

>> No.57701255

you're brown

>> No.57701277
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57701277

>>57701255
>you're brown

>> No.57701341

I read a book like a decade ago that was extremely good, can't recall who it was by...has a white background though

>> No.57701623

>>57701253
You are an orange juice maker in Florida. Your business needs oranges to survive. If an early frost rolls through and decimates the orange crop, the price of oranges will skyrocket; at $5 an orange, you won't be able to make orange juice cheap enough for anyone to buy, and you'll go out of business. So you go to your insurance broker and buy an insurance contract on the price of oranges. You don't want to pay more than $1 per orange, so you call the price at $1. Your insurance broker has a team of actuaries who run the numbers and decide to charge you $0.01 premium per orange for this contract; if you need a million oranges, your insurance premium is $10k. The contract is in effect for one season, and you must renew it each year. Most years, the crop is healthy, and you just buy your oranges on the market for 10-50 cents a pop, and your $10k is spent on a "worthless" contract. But every once and a while, unpredictability, the frost rolls in and all the orange consumers panic. Not you though. All you have to do is file a claim with your broker, and remind them that you called the price on a million oranges for $1 each. And your broker will readily honor the agreement, and will deliver up to one million oranges and you'll only have to pay a dollar each, while your competitors and the rest of the market are stuck paying $5+.

>> No.57701645

>>57701623
> You are an orange juice maker in Florida
Fuck that give me a cooler job

>> No.57701763

>>57701623
why would I be selling anything other than cocaine in florida?

>> No.57701798

>>57701253
>>57701623
You are an orange farmer in Florida. Like all farmers, you must sell your crop each season to cover expenses. Counterintuitively, having a "good" season with a surplus of crop can be very bad for business. If there's a warm season and all orange farmers in the region have surplus of oranges, the price will plummet to 2 cents each, and there will be no demand to buy all your oranges, so you'll be unable to turn a profit and your business will fail. To avoid this, you draw up a contract with your insurance broker to guarantee you'll be able to put your oranges on the market at a minimum price and make enough to cover your overhead business expenses. You need to sell a million oranges at 10 cents minimum to stay afloat. The actuaries run the numbers and say it will cost 1 cent premium per orange. So your yearly contract is $10k. Most years, the crop will be normal and you'll be selling oranges for ~30 cents each, and the $10k you spent on the contract will be "lost". But every once and a while, there will be a warm season and as the price of oranges crashes to 2 cents, your neighbor farmers will panic and go bankrupt. Not you though; you remind your broker of your contract to put one million oranges on the market at 10 cents each and they will happily pay you 100k for 20k worth of oranges, as they are contractually obligated to do.

>> No.57701893
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57701893

>boughted
>holded
>all lowercase
>reddit spacing
>understands options so poorly he doesn't realize you can sell them for passive income
Ummmmm yeah I'm thinking retard

>> No.57703244

>>57701623
>>57701798
dont most commodity and agro business like that use futures rather than options since the pricing on those will not be as 1 way profitable to the farmer or juicer as you portray