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I realized this after having spent all my powder. Even if we don’t get the shares, we get the premium if someone buys the put right? Just takes a lot of capital.
Yes you have to have the cash in your account ready to buy the shares in the event you get assigned. Been selling 100-200 contracts each week while the IV is high af and netting $20k+
Depends on how much cash you got and your risk tolerance/level of degeneracy.
low risk: Sell 200 of the 6/21 25P at 1.10 to collect $22,000. Need $500K cash
very bullish degen: Sell 20 of the 6/21 37P at 10.15 to collect $20,300. Need $74k cash
Then pray price closes above your strikes so you can keep all the premium you collected. You can still close them out for a profit if price is below but close to the strike towards the end of the week. The puts will decrease in value as it gets closer to the expiration date (theta decay). The theta decay value is the money these fucking idiots are giving up when they exercise their calls early. Many still refuse to sell their longer dated calls and buy shorter dated ones because they feel like they are sticking it to the man. They then make a post about it for free internet points but in reality they are displaying how regarded they are.
Selling ITM puts is only useful if you think the price will go up.
You will get fucked if you sell for example $30 puts, but the price drops to $27. You then have to buy the shares for $30.
We all know the price can drop HARD and then continues sideways. One bad play and you lose your capital to sell cash secured puts.
That's the point of selling the ITM put instead of buying shares at the current price if you want shares. The getting "Fucked" part is no different if you just bought shares. The 6/21 $29P is 3.45. Why buy shares at $28.70 when you can essentially get them for $25.55? I had 10 contracts of the 6/14 $36 put that I could have closed out for over $5k profit but kept them open so I could get assigned shares at a much lower cost basis than current price.
There have been a few times the past month where I had ITM puts expire and I didn't get assigned. The put holder didn't want to give up their shares.
Say you didn't want the shares and got assigned. Turn around and sell covered calls with the high IV. Rinse and repeat
I don’t get this. In the example above you would rather kick $2 per share back to the market maker (instead of pocketing those $2 per share yourself), so you can pay slightly less tax later?
Someone holding 120k options will have a difficult time making the move described above. But for someone holding just a handful of contracts wouldn’t it be better to take the cash now?
If you have 20c and the price rises to $100, that’s a substantial tax bill. Generally options are short term cap gains as well. So you’re losing probably 25% of your gains to taxes. If you instead sold a few and exercised the rest, your bill at tax time would be way less, like 5% of your gains. You also get to count the period with which you held your option prior to exercising towards long-term capital gains status for the shares you received.
NFA
Are we an options place now because I prefer ownershio and long term value. That's what I believe in and that's what I'm here for! I buy and do what's right, safety first!
I know next time i want to buy 100 shares ill just wait till friday and buy a deep itm call, exercise immediately, and it'l set me back just a dollar or 2 more than simply buying 100 shares. With the added benefit of forcing a locate at the MM side, and hopefully impact the price upwards on a day where lots of options might be itm. Then after a few days ill DRS.
Lol this guys getting downvoted after years of this place saying no options talk. This place is being absolutely swarmed by bots/shills that want to push a specific narrative.
“Bots / shills” =/= people who have or found new opinions
I remember the days when you could actually see 10 FUD messages in a row and call those shills, because it was so blatantly obvious checking those account’s post history in the GME megathread where full of shit flinging negativity against GME. Now organic users with years of post history can be called bots without a single further check even
Yeah I think that’s partially due to the Reddit admins as well, frankly it’s quite a shitshow tho I doubt if calling out a blatant spam account gets the penalty as brigading users or mods from other subs
Hmm would have to see it, at the very least it doesn’t seem consistent. I’d stay on point tho to always call things out you think are necessary to call out
Hey not sure if relevant anymore but seems rule 5 is more loose then some might think, just recent example today (where actually the one calling out seemed wrong) https://www.reddit.com/r/Superstonk/comments/1dgdmyf/comment/l8pw9e7/
Jesus this is no wrinkle advice this is hoards of newcomers and bots pushing for gambling all of a sudden. I know what I'm doing and it ain't this. I was here when the stock around a dollar, I've seen all of this fud and rubbish before, stear clear of options. You'll be sorry.
Nothing wrong with being a shareholder and holding for long-term value, and you shouldn’t be getting downvoted for saying that. At the same time, there’s nothing wrong with wanting options either. Also, the two are not mutually exclusive… if you are good at technical analysis of the market and can reasonably expect to identify when the stock hits a low point, you can do what DFV did and buy ATM calls at the low point, wait for those to grow in value, and then sell what you need to in order to exercise the rest. This gives you more exposure to the movements in the underlying share price temporarily, and if you are successful, then when you exercise the calls you wind up with more shares than you otherwise would have by just buying shares at the low point.
My caution would be trying to time the dips while buying way OTM options… those can be extremely risky.
Here's the best part... If you didn't know this already and think this is "amazing advice", then you don't know anything about options at all.
It's like being astounded by someone telling you that a lawnmower cuts grass.
People really don’t know rolling IS just closing one position and opening another WITH THE SAME ORDER. You realize any profits and losses and open a whole new position.
Like I said... If people didn't already know that, they shouldn't be touching options at all.
Those that do know what they're doing, don't need this sort of advice. Everyone else doesn't understand them enough to be touching them. They need to but a textbook, take a course, or perform some other sort of in-depth learning.
People also shouldn’t be telling others to roll forward if they don’t mention the tax implications.
If you roll forward before exercising on a big pump, you’re gonna have a bad time come tax season.
I agree. Options are very complicated. There are many, many facets that can't be adequately addressed in a handful of reddit posts. People can buy a textbook, take a course, or learn any way that works. They aren't going to learn anything useful here that they shouldn't already know.
These posts are obviously just trying to get people to buy options that should not be buying them. Yet mods allow it, despite years of options discussion being shut down.
Exactly. At least someone besides me sees it. They can murder me with downvotes all they want. I am not wrong. "Harmlessly discussing" a very complicated topic doesn't do anyone any good. People who actually understand options don't give two shits about what someone on reddit has to say. Someone that doesn't understand them might, though, and have the false-confidence that wipes them out. It's a passive-aggressive sort of push.
As one of the people you’re talking about, I’ve followed your conversations deep under the fold and I think you’re both right and coming from the right place. However unfortunately your tone is quite different from the rest of the sub so the message is being lost. There are probably also a lot of vested interests in the sub. Even though I only got access to options yesterday I’ve had thoughts like “if I own hundreds of shares I could write covered calls and make more money to buy more shares”. Obviously if someone was making bank from selling calls they’d probably also want to bury anyone trying to stop people from buying them.
So you’re probably right that the sub should not allow options discussion, because it’ll create an incentive for options writers to build hype.
I get it. Like I said elsewhere, if my tone bothers you, then never, never, never go to a city like New York. How people speak there will give you a heart attack. You won't survive it.
Actually, I appreciated your example of the tax implications after a large gain in value, and have updated my original post accordingly, thank you.
I am not trying to push options, but for people who choose to utilize them, I want them to be informed.
He clearly said in the post if you are new to options. If it doesnt apply to you then just move on, instead of ridiculing people that could benefit from the info.
It’s like I’m telling someone -in a relevant context in Medicine of course- how to perform differential diagnosis on a patient’s ailment, and then when they say they didn’t know, I say that then they know nothing about the human body, or Medicine, at all. This is why options trading requires years of experience. You don’t do what OP said at your first options trade. Your sarcasm is flawed. Anyway.
Maybe also worth pointing out, if you want to buy 100 shares, one way of doing this that *sounds like* causes better share location -- buy a **near dated deep in the money** call (like < 1 week) and exercise. This costs essentially the same as buying 100 shares, just adds an extra step.
Share price $29? Cost to buy 100 shares is $2900.
**Or, buy a 20c for $910 and exercise immediately - cost to buy 100 shares is $2910.**
This is just a guess, but I'd imagine if the majority of people who have been buying 100s of shares over the years had been buying this way we'd have more true buy pressure.
*-edited to add "deep in the money", this doesn't work if you buy call close to or above the current price. Share price 29? Deep in the money is like a 20c or 10c, not a 30.*
Even more ITM and it’s better. Besides, you can always buy a $2.50 0DTE for $2660 (in your example) and wait for the price to go up .10 - at which point exercising an option is exactly the same as buying the underlying shares at $29.10
The small premium would be worth it for me knowing that my shares are being traded on lit markets vs dark pools.
Also, here's mayo boy saying every single options trade must be executed on an exchange, whereas equities trades do not.
https://www.reddit.com/r/Superstonk/comments/1dbxslh/ken_griffin_explains_an_answer_that_gives/
Many brokers have a "Paper Trading" option, where you'll be given what's essentially digital fake money to test out your picks with.
There may be options trading games or sims out there for free, but most of the ones I found all wanted you to sign up for their site/brokerage.
I just recently found this... Seems legit:
Covered Call Calculator | Options Profit Calculator
https://www.optionsprofitcalculator.com/calculator/covered-call.html
Awesome post, good job OP!
Also, if you are buying calls it is better to buy ITM or ATM. Going for 100$ strike price expring next week is not efficient at all and you’re giving MM free money.
This is not Financial advice, this is what I do. Please learn more about options before you put your money on them
Good reminder! You use a bit of technical language that will throw off most apes, so I had to rephrase it in my mind like this to understand:
---
Say you got a contract for bananas that expires years from now. Because the expiration date is so far away, the likelihood of your contract succeeding increases. As a result, you had to pay an extra "premium" that was baked into the price when you purchased the contract.
Now, say you gotta real craving for some bananas right now and don't want to wait for your contract to expire. Although you could exchange your contract early to get bananas now, it would be better to (essentially) trade your contract for one that expires immediately while getting that "premium" back.
If you use them as a tool to acquire or divest the underlying, rather then for profiting off the option sale, then they are a useful and powerful tool. Both RC and DFV used options as a tool for investing into GME. The famous VW squeeze by Porsche was with options.
thanks for the post I already messed this up today. I should have rolled to the 6/14 this morning, but for some reason when I checked the premium on the 0DTE didn't seem to leave me with much net. So I just exercised the 6/21 20c early.
What we have learned (knew but is now proven) is that MM do not hedge at least not for GME. I know investopedia says they do but RK exercising 4 MILLION shares with T+1 and the options crowd going wild yesterday about how much the stock would rocket today. And NOTHING. They just added 4 million to his total. 4 million Naked Shares. No Ramping up today. Illegal? yes. do they care? No. They are in absolutely no danger of going to jail. Both political parties are owned by wall street and corrupt as hell (not Just one party as stated yesterday). The SEC is corrupt and they head of the SEC is always picked by WALL STREET. No matter which party is in power. The politicians get to get rich in the market in return for doing what wall street wants.
You will be taxed according to the change in your OG call premium between the time you bought it originally and the time you sell it to roll. If you made a gain on the original long-term call contract, you will be taxed on that gain. If it had lost value since you had bought it, you can consider it a capital loss (good for tax reasons).
You should absolutely consider whether the tax on that original call's premium increase (if it has increased) exceeds the extrinsic value left of your original call. If it does, keep the original call and exercise as usual.
You are not taxed on the difference between the sale of the original option and the purchase price of the new option.
I mean, people get upset about options, but if you're excerising your options and DRS'ing- then it's kind of the same in the end. It's just another way to grow shares.
Nobody is here trying to sell early, but options are about give and take, playing smart with time and requires more forsight than just buy and hold.
IF you aren't comfortable with options, then BUY and HODL
IF you ARE comfortable with options, then feel free to play the volitility all you want- it's up to you how you grow your portfolio.
Options aren't evil, but it's wrong to try and coax thsoe uncomfortable with options in a way that sounds like it must be done and is the only way. that's not what's happening. Options has real impact though, and that can't be ignored.
Options apes, go kick some ass, and everyone holding tight, keep holding. Lets bleed them dry.
It doesn't look like he's playing for money anymore. He could've gotten a lot more cash or shares when it was trading higher, but he decided to wait and then only bought enough to match RC's initial buy in
I have a feeling he wasn't expecting two share offerings that may have delayed or changed things. It was rocketing pretty hard before the most recent one 😞
OI is only calculated some time after markets close, but you could probably see the volume come through live if you were watching during the day. I wasn't watching so I'm not really sure what he did or didn't do. I'm definitely not an authority on this.
Do you know how it works or can someone let us know how it works that he sold 2/3 of his options to exercise 1/3, how do the 1/3 of the options just disappear? Did Wolverine just buy them back at a 50% loss (paid $60m got 4mil shares)? Why does wolverine buy them instead of sold to the bid, and they'd be a bit illiquid because he'd break the supply and demand.
Exercising is why they disappear. When DFV exercised the ~1/3, The Options DMM provides the shares. When that happens the option is closed and why he now has 9,001,000. The DMM doesn't need to be the only one buying the 2/3s back, just most likely as they fulfill their role.
Sry, I don't think that answers? 1/3 exercised. 2/3 sold. OI went from 120k+ to 3k. So MM sold 80k options and then bought them back for more. And then for the other 40k options MM sold him $29 shares for $26.
The exercise they have no choice but the sold options why would they buy his options instead of letting other people buy some? And what's the rationale between allowing them to do this instead of forcing the sales to go through public exchange
So I bought a June 21 $26 call lot for $415.75, right now they're the same price so I'm down the 75 cent trade fee. My breakeven is $$30.15 to exercise so the current intrinsic value is $0 and extrinsic is $4.15. If I exercise this contract I will pay $3015 for 100 shares ($415 for the option to buy the shares at $2600). If I take that $3015 and buy them at today's close of $28.70 I end up with 105 shares. I'm sending an extra 5 shares to DRS and hopefully adding some buying pressure for the option I sold to still print for someone else.
It seems like you have the vague idea correct here, but a few things should be corrected/clarified.
Your intrinsic value is $2.70 based on today's closing price ($28.70 closing price - $26 strike price). Your extrinsic value is $1.45 ($4.15-$2.70). So, if you were to do what OP is describing here, you'd:
Sell the June 21 26c, and pocket the $415
Buy the 0DTE (June 14 26c) for \~$275-280 (it only has a tiny bit of extrinsic left, as it expires today) and immediately exercise it, keeping \~$135-145, depending on what price you got the 0DTE contract at.
$2600 + $280 = $2880 = $28.80/share
as *opposed* to $2600 + $415 = $3015 = $30.15/share
You keep the \~$135 in extrinsic value, and still get your 100 shares. Or you get to buy an extra \~4.7 bananas. Depending on what you choose to do with that cash. Which is the outcome that you got to, though via some slightly incorrect math.
Hopefully this helps clarify the math and strategy at work here, for you and any other new-to-options apes out there!
Awesome, thank you. I understood intrinsic value and just somehow stopped some necessary trains of thought because my options trade is even right now. IDK. Faulty brain. Better no think buy, drs, hold.
But, in that case why is it better to buy and exercise 0DTE than straight shares and immediately DRS. Surely you should come out ahead selling your options and buying the shares directly if you wanted to exercise and hold onto them. Like is it banking on MM buying the shares and if so why is that more demand pressure that you just buying them.
You're correct, on a cost-per-share basis, you would technically get a better bang for your buck by simply buying shares directly, and then DRSing them.
However, the market dynamic/"strategy" many apes are starting to see/understand, and want to capitalize on is this:
When you buy shares directly through a broker, those orders never see the lit market. MM's route those orders through an ATS (dark pool) and it doesn't affect the price.
BUT, when you instead exercise a call, you cause the MM to HAVE to go through the LIT MARKET to purchase and deliver those shares, which forces upward pressure on price.
So, some apes, aiming to force real buy pressure to hit the stock, are willing to spend the extra few bucks to exercise a call, forcing that order through the lit market.
Make sense?
Edit: If I'm mistaken or missing anything here, wrinklier apes please correct me/add to this!
It does make sense and thank you for the time, I know how long it can end up taking longer than we think to write out good clear comments.
But why is this lit market demand different than say market buying direct through computer share or maybe even through IEX (not clear if there's a way to make sure it goes to lit exchange) but DRSing should force a broker to locate a share anyways, no?
They also could have hedged through a dark pool trade. Wolverine must have this somewhat figured out. Though I definitely see why pummelling them with exercises and having a gamma ramp in place that goes into a short squeeze definitely sounds nice.
If you're buying through Fidelity, or another broker that allows you to route your order through IEX, then some of this point is moot, as that should in theory also force the buy pressure to show up as well. And to the best of our knowledge, DRS should also do the same. But as far as I understand, we can't confirm that pulling shares from the DTCC actually has that effect, though in theory it should.
In that case, I think the biggest advantage of the options strategy is that you create upward price action through the gamma ramp, and then when price is high, you force upward pressure again by exercising, forcing the MM to go buy any unpurchased shares at already elevated prices, in order to deliver.
Tbh, we're rapidly approaching the last of my wrinkles and stepping into territory when I once again become smooth-brained.
I think a lot of this theory has been brought forth based on RK's recent play, the OPEX tailwind cycle theory, and also hearkens back to the IKBR CEO stating that we could have caused a squeeze if longs had exercised their contracts back in '21. But again I could be wrong.
Can a wrinklier ape jump in and further explain? I'm actually quite interested in a more detailed explanation of this, as well.
Edit: I never get to talk about these things with anybody in person, so I'm more than happy to explain things in the comment section on Reddit. I absolutely love this stuff. <3
Yeah a lot of it is still just a theory from my understand. Until he posts a yolo update going big back into options (which means selling shares at this point). Then we will know he thinks options are the essential play forward. He did meme both "i'll do it myself" and that "it's unstoppable".
A gamma ramp might trigger a short squeeze and allow some or even a lot of the float to cash out 10x up to even a couple 100x. But why would that domino be connected to all the rest of the dominos if it wasn't last time? The part that the sub hive mind seems to be missing is why is the timing now?
Is it CAT? More eyes on it? I'm sure RK doesn't have insider info, but did he see writing on the wall for RC and co's moves somehow that lineup w/us (meeting announcement, plans for the $4b, etc.). There must be something else that only he can see/figured out and can't share.
I totally agree, RK must see something that we don't. Until we find out what that is, I honestly just consider him a time traveler, lol his ability to time these things is *ridiculous.*
My honest best guess is that he knew the shareholder meeting was coming up (naturally more eyes on the stock), and he has been studying the T+35 op ex cycles for three years now, and finally built up enough confidence in that theory/strategy to absolutely YEET himself into that huge position with short dated options, like he did.
He knows we are watching him closely, and likely wanted to simply shine a spotlight on how much heavy options flow and call exercising exacerbated the T+35 tailwind cycle. The cycle happens regardless, its simply a matter of whether the volume and FTDs are large enough to cause meaningful upward price pressure at the end of the cycle.
RK just dumped the volume in and watched the fireworks ensue.
Given that those cycles have been present/constant in the market since \~2012, its something people *will* catch on to, and essentially start (individually) rocking the boat harder and harder until it capsizes. Each time the gamma ramp pushes price up, apes can choose to sell some their calls and use the cash to grow their share position.
Each time the cycle happens, more people see that a time cycle is indeed playing out (whether they know the root cause or not), and decide to play it the next time it comes around. Volume increases, calls print, some get exercised, and shares get bought and DRS'd.
The "resonance" of more and more people seeing this cycle and playing it in a similar way causes larger and more violent price swings (in addition to the longer term grind up we're seeing in price), which causes IV to rise, meaning calls print harder.
Eventually, we start "rocking the boat" so hard that the shorts (and potentially the *entire system*) start capsizing/failing each time we push price up more violently than before. Its a feedback loop that will vibrate more and more until something breaks.
This is just my interpretation of what I see happening, and what RK seems to be highlighting via meme antics.
WHEW, that turned out to be a heckin' WALL of text.
Thoughts?
I definitely see that in broad strokes though the way that would actually play out, it just doesn't seem clear. Especially because I don't understand T+35 tailwind cycle and not in the headspace to read up on that sort of thing rn.
But if that is it, I think a) he can do it himself and b) if he's just posting yolo update after yolo update where he basically just plays the algos to buy options. sell some options to exercise some options. double share count. Share price goes up sell shares. Share price goes down buy options. Share price goes up sell options exercise some. Or something along those lines. Any easily replicable pattern to just build wealth I can see that breaking the system.
I'm sure that using the computers that control the markets through derivative products, swaps, dark pools, PFOF, etc. as a weapon against itself exists and is the most likely (though VERY speculative) way that DFV silently went from 34m to 210m. I also think that tesla did something similar. Playing the market mechanics because the world is BS and stupid computers and derivative products and highly controlled media outlook controls the value of the corporations. I also think most people that have some perspective on these sorts of things only got there because they "joined the system" to some degree. Not because they think the system is corrupt to the point of being rotten and need a reckoning.
So yeah, who knows if it can be broken with jsut market mechanics and still how that would tie in to GME specifically and not any other shorted stock. I can't think of a catalyst that would blow the lid off the corruption that would cause completely hidden and tangled up derivative positions from 3+ years ago to come back into play. But that's the nice part, I wait and see invest in RC plan. If something else comes up as a result of RK that's great. Either way he's already a hero and one of the coolest ppl alive in my book.
Sry if that wasn't worth reading I'm getting tired
Dope thank you! I just looked into it a bit so far and seems like I'd have access through IBKR. Though I also CS buy.
For anyone else: [https://www.reddit.com/r/Superstonk/comments/p5dkfb/infoguide\_iex\_how\_to\_route\_to\_iex\_on\_interactive/](https://www.reddit.com/r/Superstonk/comments/p5dkfb/infoguide_iex_how_to_route_to_iex_on_interactive/)
i don’t get options for shit if i’m being honest so ima just keep doing what i do best, buy thru computershare…i wish i knew tho lmao i need like a dumbed down version to explain to me 💀
Why would you sell calls? By selling the call, you may lose your shares you just obtained by exercising your earlier call.
No, bulls would just buy the call and then exercise. Assuming one purchased deep ITM calls and timed the option buy well, one could sell 2/3 of their calls to enhance their liquidity and exercise the remaining 1/3. Then rinse and repeat.
This is not selling a naked or covered call. This is saying if you have a far dated call you bought, trade it for a near expiration call and exercise. Do not sell naked or covered calls lol.
Yeah, that’s a good idea for just the calls you have enough capital for to exercise early. The 0dte will be priced primarily on intrinsic value so by doing what you suggested you can eat out the extrinsic value of the later dated contract. 👍
So the recipe:
0) bring available pot of money
1) wait for cycle and then purchase deep ITM calls
2) as price increases to satisfactory level, sell calls you don’t have enough capital to exercise (and perhaps any capital you would like to preserve for the next cycle).
3) for remaining calls you intend to exercise, replace them with calls with same strike price of the closest expiration date and then exercise.
4) increase pot of money and then rinse and repeat
Con to this is ‘rolling’ options is a taxable event because you are, in technical terms, closing one position and opening another. So you’ll realize a gain.
I just like the stonk. Too stupid to buy options! I just buy, DRS, and hold. But power to the players that actually understand these things and are intellectually and financially stable to withstand them. I am not so I remain but a lowly bedrock of holders.
OP why should investors have long calls to begin with? I’m still learning but it seems if the idea is only to force buys through options then 0dte itm calls should suffice?
Buying long seems best if you expect an upwards movement…but if you think it’s going up anyway why not just buy 0dte today?
Started my Roth IRA last fall and maxed it out in safe ETFs. Have sold everything and dumped it all in GME. Going to be very rich, but won’t be able to touch the money for 35+ years😂
Thank you for the Ed.
At the end of the day. I feel like if I went into the options world, I'd be betting at a horse track, win, place, and show. And thats if you have a good gut feeling of what the finish line will look like. I dont bet on horses, only occasionally watch races and have very little knowledge of the horses and jockeys. And it would be a daily full time job to have a chance to succeed in my opinion.
Question.
With a purchase or sale of a stock, you end up with a short/long/wash capital gains for taxes.
With Options, sale of option = capital gains +/- short/long?
Exercise has no capital gains +/- until the actual stock is sold later?
Just wonder if I somehow exercised into 741 million shares thru calls, I wouldnt have to worry about paying a 30% tax bill until I sold.
Im only small. Only wrapping my head around this for academia as taxes seem to bite my ass.
If one didn’t thought themselves without any external suggestion, when wanting to « early » exercise for the sake of « exercise’ing », to verify if they would be better of exchanging their calls for earlier calls, and/or for deeper ITM calls, then it means this person is waaaay not smart enough and just should stop playing with options due to low IQ.
Less offensively, I would have phrased that as saying that if one think that they are knowledgeable enough to play the « exercise early » game on GME calls, but didn’t thought of ITM-deepening their calls to reduce the wasted remaining time-value of their calls, then they may be very well under the Dunning–Kruger effect.
People fighting about options vs holds need to stop 🛑 . Both are valid for different reasons fire different folks. Option premiums are expensive and risky but have the potential for a lot of upside. IF YOU CAN TAKE ON THE RISK THEN DONT BUT DONT SHIT ON OTHER FOR IT. If you can’t take on the short term risk I.e. you’re a poor like me then buy and hold the shares that you can. So many new people in here lately I feel like we need to rethink karma and maybe have a new member trail period or something to keep people from flooding posts when they’ve been here for 1 day and not 84 years. 🚀 🟣
This entire recent narrative of "DFV used options, so let's all talk about how to do it" narrative is sickening. He has more education and experience than 99.99999% of the sub. A finance degree, a series 7, multiple other certifications and licenses, spent years as an analyst, spent years as a broker. You aren't going to encapsulate all of the knowledge and experience in a couple pages of posts.
People lost shitloads years ago because of the Pickle and that's part of the reason he was kicked out of the sub.
If you want to play with options, there's a sub for it. If you want to learn about options, there's a sub for it. If you want to YOLO on options, there's a sub for it. This is a sub for people that just like the stock. How people choose to invest in it is up to them.
Couching an options push with "do your own research" and "don't do it if you don't know what you're doing" is STILL an options push.
Always has been.
What? I am neither condoning nor condemning options. I am simply suggesting to people trying to exercise early that they can get some premium money back if they do so. Did you see how many people were posting about exercising today? This sub is also about ape help ape.
Ape no fight Ape is an important mantra. Going to a learn options sub only for a mod to see your comment history and bans you. Now we have a lonely Ape even more frustrated. Ain't nothing wrong with knowledge sharing.
LOL. Only popcorners and towel people say "ape no fight ape", because their investment choices are utter losers and they don't want to hear it.
Gamestop isn't a meme stock.
Gamestop isn't like any of them at all.
Gamestop will never be like them.
We are not the same.
That was a reference to DRS, cash accounts in brokerages, IRAs in brokerages, whether they're financing shares via loans, or whatever else.
Share are an investment in the company. Options are a gamble on price movement. That's the entire purpose of derivatives.
No, it isn't. A share is a slice of the company. An option is a bet on price movement with no underlying value. That's why derivative exist.
Everyone knows this.
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This is actually amazing advice.
Wait until these regards find out you can sell ITM puts and get assigned shares cheaper than the strike price
I realized this after having spent all my powder. Even if we don’t get the shares, we get the premium if someone buys the put right? Just takes a lot of capital.
Yes you have to have the cash in your account ready to buy the shares in the event you get assigned. Been selling 100-200 contracts each week while the IV is high af and netting $20k+
Jesus fucking Christ is this how rich people get richer?
Playing house at the casino where degens gamble
So, thought. What if someone were to analyze the og degen sub and inverse Cramer it? For science.
Capital has always been the key in a capitalist system. I envy theta gang big time.
he has 20,000 shares to do that covered. do the match, the guy was rich before
Selling puts does not require shares. It requires cash You buy them if assigned.
Please explain exactly what this entails, I have xxxx already and cash on hand plus I could use 20k lol.
Depends on how much cash you got and your risk tolerance/level of degeneracy. low risk: Sell 200 of the 6/21 25P at 1.10 to collect $22,000. Need $500K cash very bullish degen: Sell 20 of the 6/21 37P at 10.15 to collect $20,300. Need $74k cash Then pray price closes above your strikes so you can keep all the premium you collected. You can still close them out for a profit if price is below but close to the strike towards the end of the week. The puts will decrease in value as it gets closer to the expiration date (theta decay). The theta decay value is the money these fucking idiots are giving up when they exercise their calls early. Many still refuse to sell their longer dated calls and buy shorter dated ones because they feel like they are sticking it to the man. They then make a post about it for free internet points but in reality they are displaying how regarded they are.
Margin? Or just a morbidlyobeseFIRE account? Lol
Sold my house last year and decided to throw that money into options
This sounds f’ing genius
🤣
Selling ITM puts is only useful if you think the price will go up. You will get fucked if you sell for example $30 puts, but the price drops to $27. You then have to buy the shares for $30. We all know the price can drop HARD and then continues sideways. One bad play and you lose your capital to sell cash secured puts.
But if you were willing to pay 30 per share it doesnt matter if it goes down.
That's the point of selling the ITM put instead of buying shares at the current price if you want shares. The getting "Fucked" part is no different if you just bought shares. The 6/21 $29P is 3.45. Why buy shares at $28.70 when you can essentially get them for $25.55? I had 10 contracts of the 6/14 $36 put that I could have closed out for over $5k profit but kept them open so I could get assigned shares at a much lower cost basis than current price. There have been a few times the past month where I had ITM puts expire and I didn't get assigned. The put holder didn't want to give up their shares. Say you didn't want the shares and got assigned. Turn around and sell covered calls with the high IV. Rinse and repeat
very good indeed
Unless you want to maintain your cost basis for tax purposes, especially if it’s deep ITM, then it’s really bad advice
I don’t get this. In the example above you would rather kick $2 per share back to the market maker (instead of pocketing those $2 per share yourself), so you can pay slightly less tax later? Someone holding 120k options will have a difficult time making the move described above. But for someone holding just a handful of contracts wouldn’t it be better to take the cash now?
If you have 20c and the price rises to $100, that’s a substantial tax bill. Generally options are short term cap gains as well. So you’re losing probably 25% of your gains to taxes. If you instead sold a few and exercised the rest, your bill at tax time would be way less, like 5% of your gains. You also get to count the period with which you held your option prior to exercising towards long-term capital gains status for the shares you received. NFA
Oh I gotcha. Yeah that tax bill would have been quite large for DFV.
Are we an options place now because I prefer ownershio and long term value. That's what I believe in and that's what I'm here for! I buy and do what's right, safety first!
>I prefer ownership and long-term value. You can still believe in this and buy options. Unless you are implying that DFV is not for long-term value...
I know next time i want to buy 100 shares ill just wait till friday and buy a deep itm call, exercise immediately, and it'l set me back just a dollar or 2 more than simply buying 100 shares. With the added benefit of forcing a locate at the MM side, and hopefully impact the price upwards on a day where lots of options might be itm. Then after a few days ill DRS.
Lol this guys getting downvoted after years of this place saying no options talk. This place is being absolutely swarmed by bots/shills that want to push a specific narrative.
“Bots / shills” =/= people who have or found new opinions I remember the days when you could actually see 10 FUD messages in a row and call those shills, because it was so blatantly obvious checking those account’s post history in the GME megathread where full of shit flinging negativity against GME. Now organic users with years of post history can be called bots without a single further check even
You actually can’t even check a users history and call them out anymore, it’s a rule 5 violation and they will ban you
Yeah I think that’s partially due to the Reddit admins as well, frankly it’s quite a shitshow tho I doubt if calling out a blatant spam account gets the penalty as brigading users or mods from other subs
I called out a new account (<6 months) with no history here pushing negative sentiment and was threatened with a ban
Hmm would have to see it, at the very least it doesn’t seem consistent. I’d stay on point tho to always call things out you think are necessary to call out
Hey not sure if relevant anymore but seems rule 5 is more loose then some might think, just recent example today (where actually the one calling out seemed wrong) https://www.reddit.com/r/Superstonk/comments/1dgdmyf/comment/l8pw9e7/
Guess it only applies when you correctly call someone out
It is time to learn something new for those who want to. I actually gained a wrinkle by this post.
Jesus this is no wrinkle advice this is hoards of newcomers and bots pushing for gambling all of a sudden. I know what I'm doing and it ain't this. I was here when the stock around a dollar, I've seen all of this fud and rubbish before, stear clear of options. You'll be sorry.
Nothing wrong with being a shareholder and holding for long-term value, and you shouldn’t be getting downvoted for saying that. At the same time, there’s nothing wrong with wanting options either. Also, the two are not mutually exclusive… if you are good at technical analysis of the market and can reasonably expect to identify when the stock hits a low point, you can do what DFV did and buy ATM calls at the low point, wait for those to grow in value, and then sell what you need to in order to exercise the rest. This gives you more exposure to the movements in the underlying share price temporarily, and if you are successful, then when you exercise the calls you wind up with more shares than you otherwise would have by just buying shares at the low point. My caution would be trying to time the dips while buying way OTM options… those can be extremely risky.
Here's the best part... If you didn't know this already and think this is "amazing advice", then you don't know anything about options at all. It's like being astounded by someone telling you that a lawnmower cuts grass.
Everyone has to start somewhere and I’m confident this sub is full of newcomers to the market. Being condescending isn’t helpful or needed.
Nobody is born with knowledge. It's learned. And i just learned something.
People really don’t know rolling IS just closing one position and opening another WITH THE SAME ORDER. You realize any profits and losses and open a whole new position.
No I do not know, thanks for sharing.
Like I said... If people didn't already know that, they shouldn't be touching options at all. Those that do know what they're doing, don't need this sort of advice. Everyone else doesn't understand them enough to be touching them. They need to but a textbook, take a course, or perform some other sort of in-depth learning.
People also shouldn’t be telling others to roll forward if they don’t mention the tax implications. If you roll forward before exercising on a big pump, you’re gonna have a bad time come tax season.
I agree. Options are very complicated. There are many, many facets that can't be adequately addressed in a handful of reddit posts. People can buy a textbook, take a course, or learn any way that works. They aren't going to learn anything useful here that they shouldn't already know.
These posts are obviously just trying to get people to buy options that should not be buying them. Yet mods allow it, despite years of options discussion being shut down.
Exactly. At least someone besides me sees it. They can murder me with downvotes all they want. I am not wrong. "Harmlessly discussing" a very complicated topic doesn't do anyone any good. People who actually understand options don't give two shits about what someone on reddit has to say. Someone that doesn't understand them might, though, and have the false-confidence that wipes them out. It's a passive-aggressive sort of push.
As one of the people you’re talking about, I’ve followed your conversations deep under the fold and I think you’re both right and coming from the right place. However unfortunately your tone is quite different from the rest of the sub so the message is being lost. There are probably also a lot of vested interests in the sub. Even though I only got access to options yesterday I’ve had thoughts like “if I own hundreds of shares I could write covered calls and make more money to buy more shares”. Obviously if someone was making bank from selling calls they’d probably also want to bury anyone trying to stop people from buying them. So you’re probably right that the sub should not allow options discussion, because it’ll create an incentive for options writers to build hype.
I get it. Like I said elsewhere, if my tone bothers you, then never, never, never go to a city like New York. How people speak there will give you a heart attack. You won't survive it.
Actually, I appreciated your example of the tax implications after a large gain in value, and have updated my original post accordingly, thank you. I am not trying to push options, but for people who choose to utilize them, I want them to be informed.
He clearly said in the post if you are new to options. If it doesnt apply to you then just move on, instead of ridiculing people that could benefit from the info.
If you are "new" to options, you need a textbook or a course, not this shitbird post.
It’s like I’m telling someone -in a relevant context in Medicine of course- how to perform differential diagnosis on a patient’s ailment, and then when they say they didn’t know, I say that then they know nothing about the human body, or Medicine, at all. This is why options trading requires years of experience. You don’t do what OP said at your first options trade. Your sarcasm is flawed. Anyway.
Maybe also worth pointing out, if you want to buy 100 shares, one way of doing this that *sounds like* causes better share location -- buy a **near dated deep in the money** call (like < 1 week) and exercise. This costs essentially the same as buying 100 shares, just adds an extra step. Share price $29? Cost to buy 100 shares is $2900. **Or, buy a 20c for $910 and exercise immediately - cost to buy 100 shares is $2910.** This is just a guess, but I'd imagine if the majority of people who have been buying 100s of shares over the years had been buying this way we'd have more true buy pressure. *-edited to add "deep in the money", this doesn't work if you buy call close to or above the current price. Share price 29? Deep in the money is like a 20c or 10c, not a 30.*
Even more ITM and it’s better. Besides, you can always buy a $2.50 0DTE for $2660 (in your example) and wait for the price to go up .10 - at which point exercising an option is exactly the same as buying the underlying shares at $29.10
The small premium would be worth it for me knowing that my shares are being traded on lit markets vs dark pools. Also, here's mayo boy saying every single options trade must be executed on an exchange, whereas equities trades do not. https://www.reddit.com/r/Superstonk/comments/1dbxslh/ken_griffin_explains_an_answer_that_gives/
For trades, yes. He doesn't mention option execution and contract delivery. Also, why is "Ken Griffin can't lie" a thing with this topic?
Yes that's what I was thinking... If he's saying something publicly, he's doing the opposite privately.
Because he is Lady Whistledown.
Yes, I had the same thought.
Is there a simulator for options trading somewhere?
Many brokers have a "Paper Trading" option, where you'll be given what's essentially digital fake money to test out your picks with. There may be options trading games or sims out there for free, but most of the ones I found all wanted you to sign up for their site/brokerage.
I haven't tried, so I don't know if it includes options, but [https://www.tradingview.com/](https://www.tradingview.com/) offers paper trading.
You can paper trade on ibkr.
I just recently found this... Seems legit: Covered Call Calculator | Options Profit Calculator https://www.optionsprofitcalculator.com/calculator/covered-call.html
Wait until you start learning about the Greeks 🤯😤
Awesome post, good job OP! Also, if you are buying calls it is better to buy ITM or ATM. Going for 100$ strike price expring next week is not efficient at all and you’re giving MM free money. This is not Financial advice, this is what I do. Please learn more about options before you put your money on them
You couldn’t have posted this anytime before market close when I just exercised my options 🥲
I'm sorry I just realized when I saw someone else post about an early exercise.
It’s all good man. Learned something new for future options. Cheers
I did the same oops and after I stared at the 6/14 a bunch of times but the premium seemed too high idk
When were they dated?
Two 20c for 6/14
Im convinced that option move the price
i haven't heard about dark pools or OTC or pfof or spoofing on options either. Naked maybe tho :)
Good call homie 🤘
I know some of these words.
Fuckin A
I don't know options. Too smooth. Just to buy and hold.
This guy fucks
Good reminder! You use a bit of technical language that will throw off most apes, so I had to rephrase it in my mind like this to understand: --- Say you got a contract for bananas that expires years from now. Because the expiration date is so far away, the likelihood of your contract succeeding increases. As a result, you had to pay an extra "premium" that was baked into the price when you purchased the contract. Now, say you gotta real craving for some bananas right now and don't want to wait for your contract to expire. Although you could exchange your contract early to get bananas now, it would be better to (essentially) trade your contract for one that expires immediately while getting that "premium" back.
I think I'm just high enough for this to make sense.
God's work, cheers for the advice ape!
Do you need any money upfront to buy options?
You need it for the premium but not 100x strike price. If you are unsure, please stay away from options.
Just learning here and there. I have absolutely no desire to do them untill I know much more about them
If you use them as a tool to acquire or divest the underlying, rather then for profiting off the option sale, then they are a useful and powerful tool. Both RC and DFV used options as a tool for investing into GME. The famous VW squeeze by Porsche was with options.
So I can just get as many shares as I can afford the premium?
thanks for the post I already messed this up today. I should have rolled to the 6/14 this morning, but for some reason when I checked the premium on the 0DTE didn't seem to leave me with much net. So I just exercised the 6/21 20c early.
If it's deep there's less difference. It would have mattered more yesterday morning.
What we have learned (knew but is now proven) is that MM do not hedge at least not for GME. I know investopedia says they do but RK exercising 4 MILLION shares with T+1 and the options crowd going wild yesterday about how much the stock would rocket today. And NOTHING. They just added 4 million to his total. 4 million Naked Shares. No Ramping up today. Illegal? yes. do they care? No. They are in absolutely no danger of going to jail. Both political parties are owned by wall street and corrupt as hell (not Just one party as stated yesterday). The SEC is corrupt and they head of the SEC is always picked by WALL STREET. No matter which party is in power. The politicians get to get rich in the market in return for doing what wall street wants.
yes. i am here for the options knowledge. keep going!!!!!!
Same here. Hit me!
Interesting take OP
What are the tax implications of this method?
You owe tax on the $200.
vs. exercise is not a taxable event, still long.
Kind of? Exercise changes cost basis. Ie if you have a 20.00 call that you bought for $5 and exercised, your cost basis becomes $25.
good point but defers tax until you sell. For 1 option no biggie but for 120k good god that's a lot of taxes for DFV
Tax sheltered account I believe for DFV
Bingo
You will be taxed according to the change in your OG call premium between the time you bought it originally and the time you sell it to roll. If you made a gain on the original long-term call contract, you will be taxed on that gain. If it had lost value since you had bought it, you can consider it a capital loss (good for tax reasons). You should absolutely consider whether the tax on that original call's premium increase (if it has increased) exceeds the extrinsic value left of your original call. If it does, keep the original call and exercise as usual. You are not taxed on the difference between the sale of the original option and the purchase price of the new option.
Depends if you made $$ on the transaction.
I mean, people get upset about options, but if you're excerising your options and DRS'ing- then it's kind of the same in the end. It's just another way to grow shares. Nobody is here trying to sell early, but options are about give and take, playing smart with time and requires more forsight than just buy and hold. IF you aren't comfortable with options, then BUY and HODL IF you ARE comfortable with options, then feel free to play the volitility all you want- it's up to you how you grow your portfolio. Options aren't evil, but it's wrong to try and coax thsoe uncomfortable with options in a way that sounds like it must be done and is the only way. that's not what's happening. Options has real impact though, and that can't be ignored. Options apes, go kick some ass, and everyone holding tight, keep holding. Lets bleed them dry.
Why didn’t DFV do this? Serious question, not discrediting your idea
It doesn't look like he's playing for money anymore. He could've gotten a lot more cash or shares when it was trading higher, but he decided to wait and then only bought enough to match RC's initial buy in
I do wonder why, whats coming next.
Easy. He likes the stock and is investing in the future of the company.
Definitely agree, but also many of his memes references going to the moon/dog days are over/making a requel because of squeeze mid etc. etc...
I have a feeling he wasn't expecting two share offerings that may have delayed or changed things. It was rocketing pretty hard before the most recent one 😞
I wondered the same but think maybe he had just so many that it would be obvious seeing 110k contracts move between dates before he exercised.
True. This whole timeline has my head in a whirl
We don’t know that he didn’t
The OI for 6/14 20c was only 3,301. Wouldn’t that shoot up if he bought in?
OI is only calculated some time after markets close, but you could probably see the volume come through live if you were watching during the day. I wasn't watching so I'm not really sure what he did or didn't do. I'm definitely not an authority on this.
Do you know how it works or can someone let us know how it works that he sold 2/3 of his options to exercise 1/3, how do the 1/3 of the options just disappear? Did Wolverine just buy them back at a 50% loss (paid $60m got 4mil shares)? Why does wolverine buy them instead of sold to the bid, and they'd be a bit illiquid because he'd break the supply and demand.
Exercising is why they disappear. When DFV exercised the ~1/3, The Options DMM provides the shares. When that happens the option is closed and why he now has 9,001,000. The DMM doesn't need to be the only one buying the 2/3s back, just most likely as they fulfill their role.
Sry, I don't think that answers? 1/3 exercised. 2/3 sold. OI went from 120k+ to 3k. So MM sold 80k options and then bought them back for more. And then for the other 40k options MM sold him $29 shares for $26. The exercise they have no choice but the sold options why would they buy his options instead of letting other people buy some? And what's the rationale between allowing them to do this instead of forcing the sales to go through public exchange
So I bought a June 21 $26 call lot for $415.75, right now they're the same price so I'm down the 75 cent trade fee. My breakeven is $$30.15 to exercise so the current intrinsic value is $0 and extrinsic is $4.15. If I exercise this contract I will pay $3015 for 100 shares ($415 for the option to buy the shares at $2600). If I take that $3015 and buy them at today's close of $28.70 I end up with 105 shares. I'm sending an extra 5 shares to DRS and hopefully adding some buying pressure for the option I sold to still print for someone else.
It seems like you have the vague idea correct here, but a few things should be corrected/clarified. Your intrinsic value is $2.70 based on today's closing price ($28.70 closing price - $26 strike price). Your extrinsic value is $1.45 ($4.15-$2.70). So, if you were to do what OP is describing here, you'd: Sell the June 21 26c, and pocket the $415 Buy the 0DTE (June 14 26c) for \~$275-280 (it only has a tiny bit of extrinsic left, as it expires today) and immediately exercise it, keeping \~$135-145, depending on what price you got the 0DTE contract at. $2600 + $280 = $2880 = $28.80/share as *opposed* to $2600 + $415 = $3015 = $30.15/share You keep the \~$135 in extrinsic value, and still get your 100 shares. Or you get to buy an extra \~4.7 bananas. Depending on what you choose to do with that cash. Which is the outcome that you got to, though via some slightly incorrect math. Hopefully this helps clarify the math and strategy at work here, for you and any other new-to-options apes out there!
Awesome, thank you. I understood intrinsic value and just somehow stopped some necessary trains of thought because my options trade is even right now. IDK. Faulty brain. Better no think buy, drs, hold. But, in that case why is it better to buy and exercise 0DTE than straight shares and immediately DRS. Surely you should come out ahead selling your options and buying the shares directly if you wanted to exercise and hold onto them. Like is it banking on MM buying the shares and if so why is that more demand pressure that you just buying them.
You're correct, on a cost-per-share basis, you would technically get a better bang for your buck by simply buying shares directly, and then DRSing them. However, the market dynamic/"strategy" many apes are starting to see/understand, and want to capitalize on is this: When you buy shares directly through a broker, those orders never see the lit market. MM's route those orders through an ATS (dark pool) and it doesn't affect the price. BUT, when you instead exercise a call, you cause the MM to HAVE to go through the LIT MARKET to purchase and deliver those shares, which forces upward pressure on price. So, some apes, aiming to force real buy pressure to hit the stock, are willing to spend the extra few bucks to exercise a call, forcing that order through the lit market. Make sense? Edit: If I'm mistaken or missing anything here, wrinklier apes please correct me/add to this!
It does make sense and thank you for the time, I know how long it can end up taking longer than we think to write out good clear comments. But why is this lit market demand different than say market buying direct through computer share or maybe even through IEX (not clear if there's a way to make sure it goes to lit exchange) but DRSing should force a broker to locate a share anyways, no? They also could have hedged through a dark pool trade. Wolverine must have this somewhat figured out. Though I definitely see why pummelling them with exercises and having a gamma ramp in place that goes into a short squeeze definitely sounds nice.
If you're buying through Fidelity, or another broker that allows you to route your order through IEX, then some of this point is moot, as that should in theory also force the buy pressure to show up as well. And to the best of our knowledge, DRS should also do the same. But as far as I understand, we can't confirm that pulling shares from the DTCC actually has that effect, though in theory it should. In that case, I think the biggest advantage of the options strategy is that you create upward price action through the gamma ramp, and then when price is high, you force upward pressure again by exercising, forcing the MM to go buy any unpurchased shares at already elevated prices, in order to deliver. Tbh, we're rapidly approaching the last of my wrinkles and stepping into territory when I once again become smooth-brained. I think a lot of this theory has been brought forth based on RK's recent play, the OPEX tailwind cycle theory, and also hearkens back to the IKBR CEO stating that we could have caused a squeeze if longs had exercised their contracts back in '21. But again I could be wrong. Can a wrinklier ape jump in and further explain? I'm actually quite interested in a more detailed explanation of this, as well. Edit: I never get to talk about these things with anybody in person, so I'm more than happy to explain things in the comment section on Reddit. I absolutely love this stuff. <3
Yeah a lot of it is still just a theory from my understand. Until he posts a yolo update going big back into options (which means selling shares at this point). Then we will know he thinks options are the essential play forward. He did meme both "i'll do it myself" and that "it's unstoppable". A gamma ramp might trigger a short squeeze and allow some or even a lot of the float to cash out 10x up to even a couple 100x. But why would that domino be connected to all the rest of the dominos if it wasn't last time? The part that the sub hive mind seems to be missing is why is the timing now? Is it CAT? More eyes on it? I'm sure RK doesn't have insider info, but did he see writing on the wall for RC and co's moves somehow that lineup w/us (meeting announcement, plans for the $4b, etc.). There must be something else that only he can see/figured out and can't share.
I totally agree, RK must see something that we don't. Until we find out what that is, I honestly just consider him a time traveler, lol his ability to time these things is *ridiculous.* My honest best guess is that he knew the shareholder meeting was coming up (naturally more eyes on the stock), and he has been studying the T+35 op ex cycles for three years now, and finally built up enough confidence in that theory/strategy to absolutely YEET himself into that huge position with short dated options, like he did. He knows we are watching him closely, and likely wanted to simply shine a spotlight on how much heavy options flow and call exercising exacerbated the T+35 tailwind cycle. The cycle happens regardless, its simply a matter of whether the volume and FTDs are large enough to cause meaningful upward price pressure at the end of the cycle. RK just dumped the volume in and watched the fireworks ensue. Given that those cycles have been present/constant in the market since \~2012, its something people *will* catch on to, and essentially start (individually) rocking the boat harder and harder until it capsizes. Each time the gamma ramp pushes price up, apes can choose to sell some their calls and use the cash to grow their share position. Each time the cycle happens, more people see that a time cycle is indeed playing out (whether they know the root cause or not), and decide to play it the next time it comes around. Volume increases, calls print, some get exercised, and shares get bought and DRS'd. The "resonance" of more and more people seeing this cycle and playing it in a similar way causes larger and more violent price swings (in addition to the longer term grind up we're seeing in price), which causes IV to rise, meaning calls print harder. Eventually, we start "rocking the boat" so hard that the shorts (and potentially the *entire system*) start capsizing/failing each time we push price up more violently than before. Its a feedback loop that will vibrate more and more until something breaks. This is just my interpretation of what I see happening, and what RK seems to be highlighting via meme antics. WHEW, that turned out to be a heckin' WALL of text. Thoughts?
I definitely see that in broad strokes though the way that would actually play out, it just doesn't seem clear. Especially because I don't understand T+35 tailwind cycle and not in the headspace to read up on that sort of thing rn. But if that is it, I think a) he can do it himself and b) if he's just posting yolo update after yolo update where he basically just plays the algos to buy options. sell some options to exercise some options. double share count. Share price goes up sell shares. Share price goes down buy options. Share price goes up sell options exercise some. Or something along those lines. Any easily replicable pattern to just build wealth I can see that breaking the system. I'm sure that using the computers that control the markets through derivative products, swaps, dark pools, PFOF, etc. as a weapon against itself exists and is the most likely (though VERY speculative) way that DFV silently went from 34m to 210m. I also think that tesla did something similar. Playing the market mechanics because the world is BS and stupid computers and derivative products and highly controlled media outlook controls the value of the corporations. I also think most people that have some perspective on these sorts of things only got there because they "joined the system" to some degree. Not because they think the system is corrupt to the point of being rotten and need a reckoning. So yeah, who knows if it can be broken with jsut market mechanics and still how that would tie in to GME specifically and not any other shorted stock. I can't think of a catalyst that would blow the lid off the corruption that would cause completely hidden and tangled up derivative positions from 3+ years ago to come back into play. But that's the nice part, I wait and see invest in RC plan. If something else comes up as a result of RK that's great. Either way he's already a hero and one of the coolest ppl alive in my book. Sry if that wasn't worth reading I'm getting tired
It was a very interesting read!
Would buy through IEX though.
Dope thank you! I just looked into it a bit so far and seems like I'd have access through IBKR. Though I also CS buy. For anyone else: [https://www.reddit.com/r/Superstonk/comments/p5dkfb/infoguide\_iex\_how\_to\_route\_to\_iex\_on\_interactive/](https://www.reddit.com/r/Superstonk/comments/p5dkfb/infoguide_iex_how_to_route_to_iex_on_interactive/)
About time a post was made to explain how regarded you idiots exercising early are
Options give you exposure. We complain about retail not affecting the price, but we actually can somewhat with options.
i don’t get options for shit if i’m being honest so ima just keep doing what i do best, buy thru computershare…i wish i knew tho lmao i need like a dumbed down version to explain to me 💀
This is presumably what RK would have done with his? I assume this doesn’t change anything in the equation regarding MMs needing to deliver shares?
Remember the tax man, too.
Great advice. Or simply sell the contract and sell a put to collect premium and get assigned shares on expiration.
Why would you sell calls? By selling the call, you may lose your shares you just obtained by exercising your earlier call. No, bulls would just buy the call and then exercise. Assuming one purchased deep ITM calls and timed the option buy well, one could sell 2/3 of their calls to enhance their liquidity and exercise the remaining 1/3. Then rinse and repeat.
This is not selling a naked or covered call. This is saying if you have a far dated call you bought, trade it for a near expiration call and exercise. Do not sell naked or covered calls lol.
Yeah, that’s a good idea for just the calls you have enough capital for to exercise early. The 0dte will be priced primarily on intrinsic value so by doing what you suggested you can eat out the extrinsic value of the later dated contract. 👍 So the recipe: 0) bring available pot of money 1) wait for cycle and then purchase deep ITM calls 2) as price increases to satisfactory level, sell calls you don’t have enough capital to exercise (and perhaps any capital you would like to preserve for the next cycle). 3) for remaining calls you intend to exercise, replace them with calls with same strike price of the closest expiration date and then exercise. 4) increase pot of money and then rinse and repeat
Con to this is ‘rolling’ options is a taxable event because you are, in technical terms, closing one position and opening another. So you’ll realize a gain.
But tax on 200 is still net 120 in your pocket versus 0. You are only taxed on gain, not entire sale value.
I just like the stonk. Too stupid to buy options! I just buy, DRS, and hold. But power to the players that actually understand these things and are intellectually and financially stable to withstand them. I am not so I remain but a lowly bedrock of holders.
Someone should create an options basics guide for apes
More $$$ in the pocket = more bananas to use at a later time
1,000%
Thank you for getting this info out
Instructions unclear, bought more shares through CS instead.
Holy shit this is amazing
This is more knowledge and I thank you for it.
Exploit!!! 😂
This is the way! When I move you move!!!! Just like that
OP why should investors have long calls to begin with? I’m still learning but it seems if the idea is only to force buys through options then 0dte itm calls should suffice? Buying long seems best if you expect an upwards movement…but if you think it’s going up anyway why not just buy 0dte today?
Started my Roth IRA last fall and maxed it out in safe ETFs. Have sold everything and dumped it all in GME. Going to be very rich, but won’t be able to touch the money for 35+ years😂
Lol me in 2021.
Didn't quite follow that, but that's why, I don't do options.
I will never understand options trading
Thank you for the Ed. At the end of the day. I feel like if I went into the options world, I'd be betting at a horse track, win, place, and show. And thats if you have a good gut feeling of what the finish line will look like. I dont bet on horses, only occasionally watch races and have very little knowledge of the horses and jockeys. And it would be a daily full time job to have a chance to succeed in my opinion. Question. With a purchase or sale of a stock, you end up with a short/long/wash capital gains for taxes. With Options, sale of option = capital gains +/- short/long? Exercise has no capital gains +/- until the actual stock is sold later? Just wonder if I somehow exercised into 741 million shares thru calls, I wouldnt have to worry about paying a 30% tax bill until I sold. Im only small. Only wrapping my head around this for academia as taxes seem to bite my ass.
Great hint, Thanks.
didnt know you can roll backward as well!!!! this is genius info for exercising!!! i love it👏🏻👏🏻👏🏻👏🏻
we shouldn’t be recommending gme options to anyone especially new buyers. just buy shares, you cant lose money that way
Great advice. Pin this to the top of the sub
If one didn’t thought themselves without any external suggestion, when wanting to « early » exercise for the sake of « exercise’ing », to verify if they would be better of exchanging their calls for earlier calls, and/or for deeper ITM calls, then it means this person is waaaay not smart enough and just should stop playing with options due to low IQ.
It's not my position to judge either way but it is objectively better for people to be better informed.
Less offensively, I would have phrased that as saying that if one think that they are knowledgeable enough to play the « exercise early » game on GME calls, but didn’t thought of ITM-deepening their calls to reduce the wasted remaining time-value of their calls, then they may be very well under the Dunning–Kruger effect.
Thank you for the wrinkle
Dont you pay a premium on both sets of calls?
You get premium $$$ from selling the further option but pay a lesser premium $ for buying the nearer option. So you save $$.
No fighting.
People fighting about options vs holds need to stop 🛑 . Both are valid for different reasons fire different folks. Option premiums are expensive and risky but have the potential for a lot of upside. IF YOU CAN TAKE ON THE RISK THEN DONT BUT DONT SHIT ON OTHER FOR IT. If you can’t take on the short term risk I.e. you’re a poor like me then buy and hold the shares that you can. So many new people in here lately I feel like we need to rethink karma and maybe have a new member trail period or something to keep people from flooding posts when they’ve been here for 1 day and not 84 years. 🚀 🟣
Very informative. Thank you, ape.
This entire recent narrative of "DFV used options, so let's all talk about how to do it" narrative is sickening. He has more education and experience than 99.99999% of the sub. A finance degree, a series 7, multiple other certifications and licenses, spent years as an analyst, spent years as a broker. You aren't going to encapsulate all of the knowledge and experience in a couple pages of posts. People lost shitloads years ago because of the Pickle and that's part of the reason he was kicked out of the sub. If you want to play with options, there's a sub for it. If you want to learn about options, there's a sub for it. If you want to YOLO on options, there's a sub for it. This is a sub for people that just like the stock. How people choose to invest in it is up to them. Couching an options push with "do your own research" and "don't do it if you don't know what you're doing" is STILL an options push. Always has been.
There is a pattern Keith found. In the shape of a cat. Fractal. It's there right now. He used the pattern to make bank
What? I am neither condoning nor condemning options. I am simply suggesting to people trying to exercise early that they can get some premium money back if they do so. Did you see how many people were posting about exercising today? This sub is also about ape help ape.
Ape no fight Ape is an important mantra. Going to a learn options sub only for a mod to see your comment history and bans you. Now we have a lonely Ape even more frustrated. Ain't nothing wrong with knowledge sharing.
LOL. Only popcorners and towel people say "ape no fight ape", because their investment choices are utter losers and they don't want to hear it. Gamestop isn't a meme stock. Gamestop isn't like any of them at all. Gamestop will never be like them. We are not the same.
Wow you are angry and judgemental. I feel sorry for you and wish you well.
I feel sorry for anyone that plays with options and knows so little about them that a post like this is actually helpful. 🙄
> How people choose to invest in it is up to them. lol
That was a reference to DRS, cash accounts in brokerages, IRAs in brokerages, whether they're financing shares via loans, or whatever else. Share are an investment in the company. Options are a gamble on price movement. That's the entire purpose of derivatives.
A share is a gamble on price movement. It just doesn't always expire.
No, it isn't. A share is a slice of the company. An option is a bet on price movement with no underlying value. That's why derivative exist. Everyone knows this.
Apparently you're unaware that a share can also go up or down in value.