Selling options is just playing. Is Duan Yongping optimistic about Apple going to 200?

Following the sale of Pinduoduo Put and New Oriental Put, Mr. Duan made another covered call combination today. Although he is selling calls, he has stock in his hands, so he formed a group.

This is the order details. No transactions have been made yet. The order was placed to sell 9999 Apple Call cards due on December 31, 2021 (exercise price 205). The price limit is 0.28, and the total amount is 27.3W US dollars. I'm guessing this order will probably be sold tonight after fermentation during the day. This option traded 4,155 lots last night.

Next, let's talk about what a covered call is. This combination is usually made because they are worried that the stock price will not rise to a certain price, so they earn a portion of the premium by selling the call. Take the example of Teacher Bian Duan.

If the price of Apple is less than or equal to 205 US dollars before December 31st,Then Mr. Duan will be able to earn a steady income of 27.3w (so I doubt that Apple will pay 200 US dollars this month; otherwise, the pressure level of 200 US dollars is high enough. It is also a relatively stable price, and the premium is higher, but Mr. Duan chose 205, which actually had some considerations). At this point, the person who buys the call will lose all of the premium.

If the price of Apple is higher than 205 US dollars on the expiration dateThe person who bought this call will definitely ask to exercise the right. The buyer has the right to buy 99.99w Apple shares at a price of 205 US dollars. The buyer's earnings were (price at maturity - 205-0.28). Only when the expiration price is higher than 205.38 US dollars will the person who bought the call have a chance to make a profit. The closing price of Apple yesterday was 175.08, with a 17% premium. It is very difficult to make a profit.

One characteristic of the covered call combination is that once the strategy is used, the maximum potential return is limited. Once the stock price exceeds the exercise price, it has nothing to do with the shareholder.

Covered calls are more suitable for fluctuating ranges or short-term increases that are too large and are worried that they will not be able to raise the price you want, and earn a portion of the premium in advance through sell calls.

5% of the capital was used to sell the put. Yesterday, Pinduoduo and New Oriental received a premium of 3.6 million US dollars. If leverage is not calculated, the corresponding security deposit should be around 3,600 million US dollars. If there are only these two puts, then this account is estimated to be over 700 million US dollars in capital. But the point is, he probably sold more than just these two puts, so the funds in this account may have all started at 1 billion US dollars. That's a huge amount of funding.