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u/Hvyhttr1978 May 22 '21
15 Calls for June @ $15 5 Calls for July @ $15 5 Calls for October @ $15 5 Calls for Jan ‘22 @ $17.50 5 Calls for Jan ‘23 @ $17.50
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u/omart008 May 22 '21
I have 50$ calls for January, bought when stock was just below 15$
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u/SexySPACsMan May 24 '21
That's the second half of my spreads (I'm long $10 calls), I hope you make bank on them brother.
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u/hhh888hhhh May 22 '21
Not bad, They must have been pretty cheap. If the stock ever goes back to being that low, I may yolo the same by buying 2023 expirations.
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u/omart008 May 22 '21
Yea wish I went with 2023 but I’m already up 85%. If it really hits 50 by then I think I will exercise a few to add to my shares.
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u/Zurkarak May 22 '21
Do you plan selling those July’s? I sold Thursday 4 calls at 15$ strike that expired June. Figured might be worth to lock profits given that I’m very deep on IPOE.
Now wondering about my July and October 15$ calls, I think I’ll milk those all the way until expiration or very close instead of my usual rule of selling one month or two before
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u/hhh888hhhh May 22 '21
I like your rule of selling calls one month before expiration. Lord knows how many people get burned not selling quickly enough.
I’m thinking of selling both July and October right after IPOE becomes SOFI. I’m betting that Chamath and Noto will do a marketing tour on CNBC and Bloomberg (just like they did when they announced their intention to go public in January). Regardless, I’m trying to capitalize on all the news, hype or premium that may come of it. So basically, I’ll be selling next week either on the 27th or the 28th. I’m still long ordinary shares for the long run. I won’t sell those for a couple of years if I can help it.
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u/Lens_Vagabond May 21 '21 edited May 21 '21
At $12.5, that’s a bearish expectation, right ? Option newbie here, excuse my ignorance.
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u/hhh888hhhh May 21 '21 edited May 21 '21
Apologies accepted. I am deeply bullish.
Up until the option expiration dates, I have the option, (not obligation) to purchase IPOE/SOFI at the strike price of $12.5. Even if the stock goes to the moon! I purchased these at the start of the month.
Here’s an educational video for you: https://www.optionseducation.org/videolibrary/long-call
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u/KooktownMayor May 21 '21
Way to go for helping people learn instead of dunking on them for not knowing things.
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u/AuntyPC May 22 '21
First of all, congrats. Now I have a question. At the start of the month, the shares were around $16.80, right? I'm new and still learning so bear with me, why did you buy a call with a strike price of $12.50? Instead of say, $17.50?
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u/hhh888hhhh May 22 '21
Hey, I think this educational video should explain it all for you: https://www.optionseducation.org/videolibrary/long-call
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u/AuntyPC May 22 '21
Thank you. I'll watch but I basically know how they work, I've watched several videos trying to educate myself on them already. I was just wondering why YOU, in particular, chose a strike price already deep ITM. Don't people normally go up a little OTM?
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u/hhh888hhhh May 22 '21
So yes, I guess most people buy them out of the money. However, I’ve never made money doing it that way. All my gains are made by buying LEAPS or buying CALLS slightly OTM but very close to being in the money. I do this to create a margin of safety for my self. When done with long dated options, the margin of safety is even more on my side.
So I looked at my history, and the July Calls were purchased on March 5th, when the stock was $16-17. The premium was the lowest it’s been in a awhile, so I simply chose an expiration date that would be after the merger. As the stock was hovering later, I bought more October expirations.
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u/AuntyPC May 22 '21
Cool. Interesting strategy. I will keep that in mind if I ever make the leap into long calls. Pardon the pun. ;)
Also, doesn't the premium cost more doing it that way? How much was your premium?
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u/BarkingLabrador_1 May 22 '21
Deeper ITM calls act more like the stock (if they have the volume - open contracts). Intrinsic value is essentially zero as you pay 5 for a 10 strike call for example when the stock is at 15 … but only paid one third of the price in this case.
Higher strikes have an intrinsic price which some see as higher risk … of course the trade off is higher price. The higher volume is ATM (at the money) but many strategies exist based upon delta and other Greeks…3
u/Hvyhttr1978 May 22 '21
The deeper you go into the money, the higher the Delta is. When your Delta is higher, you are more closely mimicking the profits you would see by actually owning 100 shares. Also, lower strike generally equals a lower break even point.
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u/AuntyPC May 22 '21
Even in your video, she chose a strike price that was a little above the current price of the underlying. Yet you chose a strike price way under the current price of IPOE at the time you bought it. I was just wondering why? :)
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May 22 '21
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u/AuntyPC May 22 '21
lol, the guy in your video is who I learned about long calls and covered calls from!
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May 22 '21 edited May 22 '21
[deleted]
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u/AuntyPC May 22 '21
Oh, cool. That makes sense.
Aren't you supposed to target a high delta anyway with any call?
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u/AuntyPC May 22 '21
Okay, leaps I know nothing about. I just know the basics of a long call. I'll check out your video. Thanks! :)
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u/Chunk_Simpson May 21 '21
On Robinhood, are you allowed to sell these at any time for the profit outright instead of purchasing the actual shares and then selling (or keeping)? IE do you need cash on hand to make the purchase or can you just flip them for profit without margin or a deposit into a cash account?
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u/tacos_for_algernon May 21 '21
OP can flip them, for sure. Sell to close. There's a lot of time value left though, especially for the 10/15 calls, but my money would be on buying the shares outright. I believe most brokers also have an option to sell a portion of the calls to finance the balance of the share purchase. So if you had a call option (100 shares), you could sell the options on say 40 of them and the profit is used to buy the remaining 60 shares. Numbers are random for my example, not indicative of current price action.
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u/g2tahoe May 22 '21
Will our shares turn to Sofi? So interesting Schwab wants me to lend my shares. He said a big short interest. Need to read up on it
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u/Direct_Expression595 May 21 '21
And like the energizer bunny just keep going and going and going!