Investing General Discussion

Jysin said:

SPY and QQQs a few % off recent highs and everyone loses their minds. (Finance twitter)

God help us if we see an actual correction of 10%+

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Mood swings perfectly correlated to the chart.

Despite today, we have a vix thats meh. Everything found a level here in the last hour, all it will take is one stair step (higher low+higher high) and it can close the day as a rather minor move.

We break to new lows and close on the low you'll get a more substantive vix jump.

Kind of amazing MSTR can be down another 4.5% but those puts I sold yesterday are red. With premiums so high very hard for anyone long those options to make money.

Tmac said:

I'm very retarded when it comes to options, so help me understand what you're saying here...

You sold puts yesterday for profit, but they're already in the red, even though MSTR is down another 4.5%. Which isn't logical, except for the fact that MSTR premiums are so high anyone trying to short it long term is going to lose money?

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No, I sold the put to start which means I'm short the contract. Sold to Open , Buy to Close. It's the opposite of what you are use to with a standard long position. So when you sell to open an option contract you benefit when it goes down.


So I sold the $265 put contract for $2.11 , I collected the price as the entry. I close the position by buying or it expires worthless. So any price below $2.11 is a profit any price above is a loss. The most I can make the contract is $2.11 (x100 per contract) .

When the implied volatility is high the price of the contract goes up. The amount over intrinsic value is called premium. In this case the contract has no intrinsic value as MSTR is trading at 330 and the strike is 265. We have a thread that goes over this stuff I think but let me know if you need more clarification.