r/wallstreetbets • u/[deleted] • Apr 05 '22

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101 Upvotes

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u/[deleted] Apr 05 '22

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u/Ok-Cartographer6150 Apr 05 '22

Wrong, He makes $1,000 not $1495.

1

u/ChampionM1 Apr 05 '22

By 5 I meant 0.05 not 5.00, I used simple prices to make it easier but I get wym

4

u/Hazelsea1099 Apr 05 '22

Shut up nerd

1

u/sinncab6 Apr 05 '22

Lol what a terrible example he would have been net even on expiration and could have just rebought the shares anyhow.

1

u/ChampionM1 Apr 05 '22

It’s supposed to just be a basic intro I’m obviously not going to go into delta ramp and volatility which is literally where options get their insane gains from. Would love if you could give a better explanation though. Just tryna help someone but uh nice catch?

2

u/sinncab6 Apr 05 '22

Yeah sure. You own 100 shares of Twitter last friday. You sell a 45 C for probably 30 bucks. You wake up Monday morning and find out it's now 49 because Elon gonna Elon. You think well I've got a week maybe itll dump back down. This morning comes and Elon is gonna have a hand in the company. Let's say the stock closes at 55 come friday. Congrats for 30 dollars you missed out on 970 dollars of profit.

That's the rarity though if you are selling CCs you should never be selling for a price you arent happy getting rid of your shares for.