Boiler Room: The Official Stock Market Discussion

[无名的]

I'm reading this now for some input. From what I gather, you have to be accurate about a stock's price on the expiration date or you lose the premium.

So in your example, would LINE have to be exactly $20 by the expiration date in 01/17 for me to make a profitable call? Or just somewhere above the strike price * premium?

Check out the CBOE book on options. It was my Bible in learning.

You just said if it reached the $20s, so I just arbitrarily used $20.

But if you bought a $10 call and the premium was $3.60, your breakeven point is $13.60. Anything beyond that is profit. So if it finished at $20, you'd be $20 minus $13.60 for a profit of $6.40 per contract.

That's a 2017 contract though, so time value is huge. If LINE was around $20 a year from now and you had a year left until expiration, your profit would probably be much more than $6.40 per contract.

I done copped a nice amount of Feb monthly SPY puts right before the close. I expect a good dip soon. @Brady Hoke's Artery thoughts?

What strike and how much per contract?

 

[GoPro]

Check out the CBOE book on options. It was my Bible in learning.

You just said if it reached the $20s, so I just arbitrarily used $20.

But if you bought a $10 call and the premium was $3.60, your breakeven point is $13.60. Anything beyond that is profit. So if it finished at $20, you'd be $20 minus $13.60 for a profit of $6.40 per contract.

That's a 2017 contract though, so time value is huge. If LINE was around $20 a year from now and you had a year left until expiration, your profit would probably be much more than $6.40 per contract.





What strike and how much per contract?

Boss! Good looking. shyt is kinda simple then. It's the accurate guessing that can make or break you. Posters on the msgboard of a stock I've been following kept mentioning how it was being manipulated to hit put/call targets. This stocks shyt is some shiesty shyt.

 

[无名的]

Speaking of those number correlations on the shale stocks (assuming it works for others)... just updated my chart. Looks like the spike in oil pushed the prices up to the overinflated side of things.

Over 265 trading days, EPE has averaged about 51.69% of USO. Today it traded at 63.2%. Only the 2nd time above 60%. Traded at a low of 33.71% 7 days after the OPEC decision / panic.

Now trading about $2 higher than when oil was at $68 a barrel.

If oil continues to jump higher, maybe we see a little more irrational exuberance, but I'd expect the individual shale stock prices to fall back the next few days.

If I were a betting man, I'd be buying puts or shorting.

 

[lightbearerchef]

Could 1 of yall put me on to this stock shyt? Anyone get any books, sites, courses, anything 2 suggest?

 

[Swagaveli]

I got 198 Feb 20th puts avg price 1.25. 20 of those bishes

Check out the CBOE book on options. It was my Bible in learning.

You just said if it reached the $20s, so I just arbitrarily used $20.

But if you bought a $10 call and the premium was $3.60, your breakeven point is $13.60. Anything beyond that is profit. So if it finished at $20, you'd be $20 minus $13.60 for a profit of $6.40 per contract.

That's a 2017 contract though, so time value is huge. If LINE was around $20 a year from now and you had a year left until expiration, your profit would probably be much more than $6.40 per contract.





What strike and how much per contract?

 

[无名的]

I got 198 Feb 20th puts avg price 1.25. 20 of those bishes

The market is volatile as hell, so it's possible, but just my personal opinion, I'd be scared. I hate short-term options because it's just so hard to predict with the constant influx of news.

Reasons I'd be scared...

• You only have 12 trading days for an almost 5% drop
  
• I don't know when you bought or what you use to trade, but Ameritrade says the market value of those options are 89 cents right now
  
• Time value is quickly eroding the contract value, so you're dropping 6 cents a day. You buy last week?
  
• The last time the market breached $196.75, your break even point, was October 28
• Ameritrade number crunching says only 15% chance you're below $196.75 by expiration

If it were me, I would trade out and take my $800 loss or because the market is choppy and a trader's market, hope the price quickly goes down a couple bucks by the end of the week and reduce the losses.

But again, market is choppy, so who knows?

 

[Swagaveli]

Well first off, I appreciate the thorough answers you give to people here, always great when brehs share insight and build.

I got these Mon and Tue (averaged down yesterday near EOD). I use IB, and yeah .89 is what I see on those also. I first got em at 1.8, avgd down to 1.52 and then to 1.25 yesterday. Will def not avg down on plays like this one in the future, lol.

But if SPY goes below 203 today or tomorrow, I should be near breakeven. Yesterday when it dipped to 203 zone, those p


6 cents a day though, for real ?

The reason I avg'd down was the fact that I believe I have until Friday until time decay really becomes my enemy, no?

But yeah, getting out on a dip with minimal loss is looking the likeliest for me here.

These news could work in my favor though:

http://www.marketwatch.com/story/oi...-as-inventory-data-show-huge-build-2015-02-03

http://www.reuters.com/article/2015/02/03/us-eurozone-greece-idUSKBN0L71NC20150203

The market is volatile as hell, so it's possible, but just my personal opinion, I'd be scared. I hate short-term options because it's just so hard to predict with the constant influx of news.

Reasons I'd be scared...

• You only have 12 trading days for an almost 5% drop
  
• I don't know when you bought or what you use to trade, but Ameritrade says the market value of those options are 89 cents right now
  
• Time value is quickly eroding the contract value, so you're dropping 6 cents a day. You buy last week?
  
• The last time the market breached $196.75, your break even point, was October 28

If it were me, I would trade out and take my $800 loss or because the market is choppy and a trader's market, hope the price quickly goes down a couple bucks by the end of the week and reduce the losses.

But again, market is choppy, so who knows?

 

[Swagaveli]

Oh and how about those GPRO calls as a pure earnings play?

 

[Ohene]

Oh and how about those GPRO calls as a pure earnings play?

i wouldnt

the volatility of GPRO is too high on a normal day nevermind surrounding an earnings release. Volatility affects time value greatly and affects the premium you pay for out of the money options so with it being an earnings play i'm sure the stock would have to move a bunch in whichever direction. If it doesnt move enough, youll probably end up losing a bunch of your value the morning after the release because the earnings being done will lower the potential volatility given the time horizon greatly

i can elaborate if you tell me when the earnings date is and which option youre looking at

edit: its actually not that expensive.

 

[Ohene]

i'm telling yall to keep an eye on this stock for the longterm

I'm hoping to get in before Q1 earnings release cause i probably wont be able to before its Q4. I dont know when its going to blow...but eventually it will and itll be magic

I see a downside of 30% down to $6 a share but absolutely no less. I'm willing to risk that for the upside of possibly tripling in the next couple years

 

[GoPro]

I personally expect turbulence but apparently US suppliers are cutting production which bodes well. Some canadians such as my Cenovus Energy have as well so this has helped the price rise.

I hope it can rise steadily but its too volatile so I'm being conserative

And of course I miss the oil rally and a nice quick profit.

 

[Ohene]

And of course I miss the oil rally and a nice quick profit.

it hasnt been missed but like i said it will dip and dive every now and then. Crude futures was up 10% yesterday at one point so conventional wisdom says the next day will experience some profit taking. hopefully it can rebound once the market opens though

overall there is a lot more to gain in the long term. if you are long options you should be looking for January 2016 expiry at the EARLIEST...September MAYBE

 

[Ohene]

as far as linn,...doing a quick scan it looks like a growth stock in this space so companies of its kind will be the first to get knocked if oil continues downward.

It reminds me a lot of Canadian Oil Sands and Surge Energy.

Trading below its book value.
Great revenue growth YOY
Doesnt keep much cash on hand

Only difference is that it has immense debt and relies on debt for capex. If I were you I'd look into safer options because if that Linn dividend gets cut it could be an issue

Might even wanna look into foregin firms with the USD heading up

 

[Domingo Halliburton]

Could 1 of yall put me on to this stock shyt? Anyone get any books, sites, courses, anything 2 suggest?

check out the sidebar on the right: reddit.com/r/investing

bunch of threads asking the same question you're asking as well as lists of books.

 

[GoPro]

it hasnt been missed but like i said it will dip and dive every now and then. Crude futures was up 10% yesterday at one point so conventional wisdom says the next day will experience some profit taking. hopefully it can rebound once the market opens though

overall there is a lot more to gain in the long term. if you are long options you should be looking for January 2016 expiry at the EARLIEST...September MAYBE

Luckily I was somehow able to sell LINE at 11.87 (and that was my error cause I hit Limit instead of Stop Limit), even though it opened lower than that . Made a nice little day trade profit of 600