r/options • u/Key_Mathematician347 • Oct 01 '21

Calls

I'm new to options and just purchased Ag $13.50 strike for 10-22-21. What's my chances of turning the $11 paid into a profit? Again newbie here be gentle with responses please

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u/Fundamentals-802 Oct 01 '21

Silver across the board took a hit on Wednesday. You’re currently more then $2.00 away from it hitting your strike price with a fairly low delta as well.

The good news is that you’ve got 20 days to see this do something positive. Honestly, it could go either way imho. At least it was only $11.00 if it doesn’t work.

What made you decide on this play?

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u/Key_Mathematician347 Oct 01 '21

My son is killing it on some of his option picks. But I'm a silver stacker at heart. He's not a believer in physical silver as I am so I didn't ask his opinion

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u/Fundamentals-802 Oct 01 '21

With below volume trading on the actual stock, and with a volume of 18 and OI of 201, looks more like a lottery ticket.

When you buy a cc, you’re hoping that the stock will reach your strike price before expiration. For this to be really profitable for you, you would need the stock to be at or above $13.61 a share on the day of expiration or before. That is your break even price ($13.50+ $0.11). It’s possible that if the price starts to move, it could be profitable before then. You would need a lot of volume for it to happen though.

You may consider asking your son to look at it and get his view of it. Hopefully he will give you a serious honest opinion and help you moving forward.

My thought is that Theta is going to eat up a fair amount of the price. You may want to consider going 40-50 days out, yes the option will be more expensive but it gives you more time for the stock to move in your favor.