0.50Open0.98Pre Close327 Volume551 Open Interest25.00Strike Price18.34KTurnover118.67%IV6.61%PremiumNov 29, 2024Expiry Date0.00Intrinsic Value100Multiplier3DDays to Expiry0.70Extrinsic Value100Contract SizeAmericanOptions Type-0.3273Delta0.1365Gamma43.37Leverage Ratio-0.1941Theta-0.0006Rho-14.20Eff Leverage0.0080Vega
JennyLeitch : If only I understood all that.. it sounds smart.
Sean Parker JennyLeitch : he's just saying buy put options for now because he thinks the price will drop soon. if you can afford it, maybe not a bad idea.
10baggerbamm OP Sean Parker : I'm not saying buy put options. it's important to understand that when you buy a put or buy a call you're making a bet and that bet it must be right on two fronts. if it's a call the stock must rise to that strike price or close to it or exceed it within the time frame before that option expires and even if it goes up you can still lose because of the decay Factor which is the time that erodes every second of every day up to expiration so even if the stock goes up but it goes up very slowly you're losing the time value.. and same thing with the put it needs to fall within that time frame and a faster that stock falls the more money you'll make because you still have time value left. so statistically 90% of the people that buy puts and buy calls lose their money. because even if the stock does go up or down if it takes too long to get there your option goes to zero.
by selling a put you pick the strike price that you think you would want to own that stock at you pick the time frame and somebody else places the bet. so you're playing the casino you're playing the house you're letting the person on the other side make the bet with their money that the stock will fall to your strike price or less than it within that time frame and in exchange they pay you a premium like an insurance premium they pay it to you right up front and it's yours to keep no matter what happens.
if on the expiration day which is a Friday at 4:00 p.m. that stock is at the money at that price of the strike or in the money below then you own that stock and your cost basis would be the strike price minus the premium that you received..
if the stock never reaches that price on expiration day you kept the premium for free and you get to do it again the next Monday if you choose to.
so by selling puts on companies that you want to own you get paid up front and most of the time the other person they lost their money because the stock doesn't close at or below that strike price on expiration day.