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[FlashFlooder]

GOOG max pain is $745 this week. Good luck OP, you're gonna need it.

 

[DietRob]

Woot, found the 100k challenge... game started me with 10k though?

yea, there wasn't an option for 1405.35 like I hoped.

we could have started off poorer than MVP but that seems silly

 

[FlashFlooder]

yea, there wasn't an option for 1405.35 like I hoped.

we could have started off poorer than MVP but that seems silly

just use percentages to track your gains. The actual amounts matter little.

 

[MVP]

GOOG max pain is $745 this week. Good luck OP, you're gonna need it.

lol @ max pain theory being valid

 

[FlashFlooder]

lol @ max pain theory being valid

it's naive to think that the game isn't rigged by the big money. Not saying the 'theory' itself is 100% correct, but the principles behind it certainly are. Wall Street like to make money.

 

[Timedog]

Found the GAF game, someone PM me password!

 

[MVP]

it's naive to think that the game isn't rigged by the big money. Not saying the 'theory' itself is 100% correct, but the principles behind it certainly are. Wall Street like to make money.

http://ibankcoin.com/king_of_the_pg/2009/12/18/options-maximum-pain/

 

[bodyboarder]

Hopefully it all goes smoothly for you.

 

[Mister Zimbu]

As I understand it, that was a call option, or a buy option: It means that he owns the option to
purchase a set amount of shares of google, on the day that the option is expired, at $775/share, regardless of the market price. He paid $0.90 for those options.

Google currently is at Last [Tick] $758.045. So, say that option that he bought is two weeks long. That means that he's hoping google's share price will pass the $775 dollar mark within those two weeks. Say exactly two weeks from now, google is at 875. Therefore, the option is worth 100 dollars per share that it's good for, as the owner of the option can exercise it, allowing him to buy x shares of google at 775. As google would be currently worth 875, the owner then sells the shares at a profit.

Thank you for this. This is the clearest I've ever seen someone explain a stock trade; it's actually starting to make a little sense to me now.

Putting $5,000 into eTrade now.

So assuming the option is good for one share, what's his risk? Is it the $775 if he can't sell the option before the two weeks, but just the $0.90 if he can?

 

[ggnoobIGN]

Thank you for this. This is the clearest I've ever seen someone explain a stock trade; it's actually starting to make a little sense to me now.

Putting $5,000 into eTrade now.

So assuming the option is good for one share, what's his risk? Is it the $775 if he can't sell the option before the two weeks, but just the $0.90 if he can?

His risk is .90. But I don't think he's holding these to expiration. Every second that ticks by, his option becomes worth less and less, unless its offset by something else.

 

[XiaNaphryz]

Thank you for this. This is the clearest I've ever seen someone explain a stock trade; it's actually starting to make a little sense to me now.

Just remember dealing with options is a lot different than standard stocks.

 

[Timedog]

Thank you for this. This is the clearest I've ever seen someone explain a stock trade; it's actually starting to make a little sense to me now.

Putting $5,000 into eTrade now.

So assuming the option is good for one share, what's his risk? Is it the $775 if he can't sell the option before the two weeks, but just the $0.90 if he can?

Uh oh...

 

[Link Man]

Thank you for this. This is the clearest I've ever seen someone explain a stock trade; it's actually starting to make a little sense to me now.

Putting $5,000 into eTrade now.

So assuming the option is good for one share, what's his risk? Is it the $775 if he can't sell the option before the two weeks, but just the $0.90 if he can?

From my understanding reading the thread, if he doesn't sell the option before it expires, he's out the entire amount he invested. If he sells for less than $0.90, he's out the difference (and he'll want to do this before it expires or falls too low, as a partial loss is better than a total loss).

 

[LordCanti]

Thank you for this. This is the clearest I've ever seen someone explain a stock trade; it's actually starting to make a little sense to me now.

Putting $5,000 into eTrade now.

So assuming the option is good for one share, what's his risk? Is it the $775 if he can't sell the option before the two weeks, but just the $0.90 if he can?

Subbing to see the tearful conclusion of the bolded text.

Spoiler

I'm rooting for you

 

[MVP]

Yikes! GOOG shit the bed, sold options for .40 ($560) for loss of $700 in an hour and a half. Lesson for those looking to jump into options.

 

[zephervack]

All this stuff is above me, dont understand a thing, should be ashamed of myself as a 27 year old, subbed and will follow this, amazing thread OP.

 

[ggnoobIGN]

Also, don't jump into trading options. They are extremely complex.

 

[Link Man]

Yikes! GOOG shit the bed, sold options for .40 ($560) for loss of $700 in an hour and a half. Lesson for those looking to jump into options.

 

[the_log_ride]

You have a better chance with lottery scratchers.

lol wut

Subscribed. Good luck, OP!

 

[Dreams-Visions]

Yikes! GOOG shit the bed, sold options for .40 ($560) for loss of $700 in an hour and a half. Lesson for those looking to jump into options.

well shit.

no chance it would have recovered in a few days?

 

[ggnoobIGN]

Yikes! GOOG shit the bed, sold options for .40 ($560) for loss of $700 in an hour and a half. Lesson for those looking to jump into options.

I'm still long 750s.

 

[zephervack]

Yikes! GOOG shit the bed, sold options for .40 ($560) for loss of $700 in an hour and a half. Lesson for those looking to jump into options.

Damn

What causes the fluctuations in prices? Is every day/minute a different price?

 

[The Elite]

Yikes! GOOG shit the bed, sold options for .40 ($560) for loss of $700 in an hour and a half. Lesson for those looking to jump into options.

I guess I'm not going to be following this thread for as long as I thought.

 

[Mister Zimbu]

Subbing to see the tearful conclusion of the bolded text.

Spoiler

I'm rooting for you

Was joking, so unfortunately you'll have to save the schadenfreude for others.

I'll stick to bleeding money slowly at online poker instead of losing everything instantaneously with options trading.

It'd be cool to tinker in this but I know my savings are better put towards securing my own future.

 

[Damon Bennet]

I always wanted nokia stock. that shit is cheap

 

[Dreams-Visions]

I always wanted nokia stock. that shit is cheap

lol please go buy some.

 

[Ovid]

SUBSCRIBED

Spoiler

for inevitable tears

Haha.

This should be fun. I hope OP does well. I suck at options trading.

 

[FlashFlooder]

well shit.

no chance it would have recovered in a few days?

he only has until close of market tomorrow to sell them.

 

[Shao Kahn Brewing a Stew]

Yikes! GOOG shit the bed, sold options for .40 ($560) for loss of $700 in an hour and a half. Lesson for those looking to jump into options.

And right there is a great example to know what you're doing. Even with extensive experience like MVP has, losses will be there which didn't freak MVP out but will freak out newcomers and they will make silly decisions and lose everything they invested.

 

[Merino]

Yikes! GOOG shit the bed, sold options for .40 ($560) for loss of $700 in an hour and a half. Lesson for those looking to jump into options.

what are you seeing, and where are you seeing that I'm not seeing.

I haven't seen GOOG1228I775 go under 0.65 yet anywhere :?

http://www.cboe.com/DelayedQuote/SimpleQuote.aspx?ticker=GOOG1228I775-E
http://finance.yahoo.com/q?s=GOOG120928C00775000

edit//
ah now I'm seeing it go down.
Isn't there anything more up to date then the Yahoo finance site?

 

[ggnoobIGN]

Damn

What causes the fluctuations in prices? Is every day/minute a different price?

Nearly every second pretty much is a different price. Buyers and sellers cause these price changes.

 

[Timedog]

So he could buy options for a cheap stock and actually buy the stock before expiration if it goes down in price or at least doesn't rise enough the the option is sellable.

What are the pros/cons of buying cheaper stocks that you can actually pay for vs what he's doing?

Do you just look at the difference in the strike price compared to the market price, and if the difference is smaller than what he paid for the option, it'd be in his best interest to actually buy the stock instead of letting it expire? (again assuming he's buying options on cheaper stock, but if we're using the google stock, assuming he has a fuckload of money to actualize his option buys)

 

[soundahfekz]

Yikes! GOOG shit the bed, sold options for .40 ($560) for loss of $700 in an hour and a half. Lesson for those looking to jump into options.

Damn

Guess i'll stick to playing craps

 

[Link Man]

what are you seeing, and where are you seeing that I'm not seeing.

I haven't seen GOOG1228I775 go under 0.65 yet anywhere :?

http://www.cboe.com/DelayedQuote/SimpleQuote.aspx?ticker=GOOG1228I775-E
http://finance.yahoo.com/q?s=GOOG120928C00775000

I'm assuming the precipitous drop shown on this chart is what he's referring to:

https://www.google.com/search?q=google+stock&sugexp=chrome,mod=3&sourceid=chrome&ie=UTF-8

 

[mackaveli]

what are you seeing, and where are you seeing that I'm not seeing.

I haven't seen GOOG1228I775 go under 0.65 yet anywhere :?

http://www.cboe.com/DelayedQuote/SimpleQuote.aspx?ticker=GOOG1228I775-E
http://finance.yahoo.com/q?s=GOOG120928C00775000

edit//
ah now I'm seeing it go down.
Isn't there anything more up to date then the Yahoo finance site?

those quotes are delayed by 15min I believe. It's at $0.50 now and probably will be at $0.40 within a couple of minutes.

 

[Ovid]

Damn, i didnt see the OP's first trade. He lost 50% of his original investment already.

Not looking so good. If you were my broker I would've fired you already.

 

[LordCanti]

Was joking, so unfortunately you'll have to save the schadenfreude for others.

I'll stick to bleeding money slowly at online poker instead of losing everything instantaneously with options trading.

It'd be cool to tinker in this but I know my savings are better put towards securing my own future.

I'm all schadenfreude, all the time. Except this time, because I was trying to warn you if you were actually being serious.

It's a good thing you weren't.

 

[Castor Krieg]

Trades:

9/27/12: Bought 15 GOOG calls, expire tomorrow, $775 strike....bought them at .90, sold @ .40 for $700 loss

Are these European calls? Why didn't you let them expire, the loss would be minimal? Did you buy shares? Why did you buy shares when you hold the call option?

 

[Razek]

I don't really understand stocks, like at all.

I've always wondered, can't you just buy stock in a safe company and leave it until it actually makes a profit (Like google or apple)? Not be forced to sell like after 2 weeks or whatever?

 

[MVP]

well shit.

no chance it would have recovered in a few days?

Yes but the problem is the option expired tomorrow, this was almost a pure gamble that GOOG would break the all-time high today but it doesn't look that way...I tried to buy the call that expired Oct 5th but it doubled in price almost instantly when I tried entering the order earlier.

 

[reKon]

Well at least you're not gambling in a casino. If all those people who lost thousands gambling in a casino were into options, some of them would be actually rich instead. You're either betting one way or the other, 50/50 chance.

 

[ggnoobIGN]

I don't really understand stocks, like at all.

I've always wondered, can't you just buy stock in a safe company and leave it until it actually makes a profit (Like google or apple)? Not be forced to sell like after 2 weeks or whatever?

Hold it for forever if you'd like. I day trade for a living, so I hold onto mine for thirty seconds.


I think op sold low. 750 would gave been my out.

 

[Link Man]

Are these European calls? Why didn't you let them expire, the loss would be minimal? Did you buy shares? Why did you buy shares when you hold the call option?

He would have lost nearly all his capital if he let them expire (if I understand this correctly).

 

[FlashFlooder]

Are these European calls? Why didn't you let them expire, the loss would be minimal? Did you buy shares? Why did you buy shares when you hold the call option?

he would've lost the full amont if he let them expire.

 

[MVP]

I'm still long 750s.

Weeklies?

 

[Shao Kahn Brewing a Stew]

Well at least you're not gambling in a casino. If all those people who lost thousands gambling in a casino were into options, some of them would be actually rich instead. You're either betting one way or the other, 50/50 chance.

Not necessarily true. Roulette is also 50/50 chance with betting red or black, with a much higher payoff requiring little to no knowledge.

 

[Divvy]

I don't really understand stocks, like at all.

I've always wondered, can't you just buy stock in a safe company and leave it until it actually makes a profit (Like google or apple)? Not be forced to sell like after 2 weeks or whatever?

You can, it's just a much slower road to profit.

 

[Recon]

Not necessarily true. Roulette is also 50/50 chance with betting red or black, with a much higher payoff requiring little to no knowledge.

No, it is lower. Those green numbers!!!

 

[LordCanti]

Not necessarily true. Roulette is also 50/50 chance with betting red or black, with a much higher payoff requiring little to no knowledge.

If the wheel doesn't have green

Edit: Beaten like a dusty rug.

 

[Angst]

So he could buy options for a cheap stock and actually buy the stock before expiration if it goes down in price or at least doesn't rise enough the the option is sellable.

What are the pros/cons of buying cheaper stocks that you can actually pay for vs what he's doing?

Do you just look at the difference in the strike price compared to the market price, and if the difference is smaller than what he paid for the option, it'd be in his best interest to actually buy the stock instead of letting it expire? (again assuming he's buying options on cheaper stock, but if we're using the google stock, assuming he has a fuckload of money to actualize his option buys)

Stocks move much more slowly than options. Options generally fluctuate at a factor of at least 10 vs the stock.