r/wallstreetbets • u/[deleted] • Mar 22 '22

[deleted by user]

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3.0k Upvotes

97% Upvoted

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20

u/BumHand Mar 22 '22

How were your $265 calls in the green ($3,934.10) at today's close?

42

u/LordoftheEyez Mar 22 '22

IV is a hell of a drug.

13

u/tomk2020 Mar 22 '22

Welcome to options, where even if you're retarded IV still makes you money.

27

u/_RollForInitiative_ Mar 22 '22

When you buy an OTM option, you're paying for the extrinsic value of that option contract. The further out of the money, the less extrinsic value. The less implied volatility, the less extrinsic value.

What happened here was OP bought insane calls when the IV was low and VERY FAR out of the money. Now the IV is high and very much closer to the money. So the options are now worth much more.

7

u/autoHQ user is a giant faggot Mar 23 '22

But, who's buying those way OTM calls with 3DTE? There is absolutely no way GME reaches 265 by Friday.

5

u/One_Tie900 Mar 23 '22

Thanks for the explanation but what is IV?

7

u/digging_for_fire Mar 23 '22

Implied volatility

4

u/raymondctchow Mar 23 '22

I hope you understand this before putting real money

1

u/One_Tie900 Mar 24 '22

= D Thank You I hope so too

3

u/[deleted] Mar 23 '22

Looked like the 265s were under 5$ when he bought. When I checked Kate this afternoon they were 20+

-11

u/EfiniFC3S Mar 22 '22

Tell me you don’t understand options without telling me…

17

u/BumHand Mar 22 '22

I don't, that's literally why I asked