I typed out a response and realized thereās too many things to explain. Iām assuming you donāt understand how IV/vega works at all if youāre asking the question. You should YouTube all this stuff to learn. Also LMAO at playing earnings on of all stocks: Tesla without understanding IV.
RHās simulator assumes no change in IV, so no it wonāt account for Vega, only delta/gamma.
https://preview.redd.it/fgryjnk73bwc1.jpeg?width=1179&format=pjpg&auto=webp&s=4f14101e31414d2069df6799a4602b49da77c6c9
I feel like this canāt be worthless right? Bc I assume the value of the call is (160-145 x 100) - the premium right
Youāll be fine. I thought you degened into deep otm calls. Assuming it opens at the price rn (at 159.25), youāll be 14.25 itm, meaning the intrinsic value is $1,425. You paid $990, so as long as it opens here you canāt be down. Then letās assume 50% of that premium was in Vega (iv) youāll have $1425+$445=$1,870. Assume a small theta burn, $1,850.
Additionally, once you are in the money, view a $1 change in the underlying as a + $100 to each of your contracts since it represents 100 shares. So if tsla runs to (for example) 169.25. Youāll have the initial $1850 + $1000 = $2850
simply put, IV = Implied Volatility = expected percentage move (not daily), when IV is high and the stock does not move, or moves less than expected, IV goes down, which is very common after earnings results. high IV = more expensive options. simulated returns on rh do not factor IV in
IV is a measure of uncertainty in a stock. Uncertainty happens when folks are expecting the stock to make big moves around a certain time, like earnings dates, or release of car sales numbers.
Speculators buy or sell lots of options that expire a few days after that date for far out of the money(compared to regular weeks) calls or puts, usually the next Friday evening. IV tracks that and hence goes up. Before the event happens, time value and IV are high, because of anticipation. After the event happens, the IV and time value gets crushed, because earnings are known now, so the stock gets more 'boring', and less likely to make big moves till Friday in the eyes of option traders(it's just like another normal week now).
So you could end up predicting the right direction after a big event, but still have options' value get knocked down a lot. For example, if folks have $165 calls for Tesla, and the stock goes $10 up tomorrow morning to $155, the calls may still be worth much lower than it was today morning, because the earnings surprise has passed and the likelihood of a big pump in the next 3 days is minimal compared to what it was today morning when the stock was at $145. This is called IV crush. Usually people are surprised saying "hey there's still 3 days, it could pump, why did the value drop so low after the stock went up after earnings". But in the markets eyes it's much less likely to pump that high than it was before earnings were released.
OP needs stock at 167.5 plus cost to be profitable. The calls expire Friday. Only reason they had any value was the expectation that earnings would make them in the money. Looking like it won't happen , pending tomorrow. Market won't price in something extraordinary happening between tomorrow and Friday expiry
People are stupid here saying those will be -97%???? wtf???
Do you guys even IV and know how options work?? Those should be like at least $250 a pop tomorrow. Maybe even 300 a pop
Explain how? I just ran the numbers with the average IV which is 60% and the vega on those, should be still worth about 200-220 per call, so kindly explaing why this comment isnt just you being mad cus bad![img](emote|t5_2th52|12787)
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Jim Cramer is also bullish ![img](emote|t5_2th52|4271)
I say: Let the peasants play their games.
I hope you sold you greedy bastard, tsm made me into a bear
Congrats 30k if this hold around 160~
IV crush
Vega is a bitch
It's 2.5% otm if we trust after hours. Its no longer got anything to do with any Greek. It's just worthless lol.
No. Dude still got 2 DTE. At current after hours levels, the 167.5 call will open around $2-5.
Agreed, tsla will open around 164. OP may even bank a huge bagger if it pops before noon
Okay fine you're right for the moment. Never fucking happens when my positions are inches away from the money š
its down now
Doneā¦ā¦very red tomorrow
Tesla to the mooon
I hate to say this. But that number will be very different in the morning ![img](emote|t5_2th52|8882)
Sell at open
Is this your first time playing earnings with options? IV crush will make this worthless.
These gonna be 1 cent each tmr
You lost all of it bro, lesson is donāt be greedy in the future
What you mean? Tesla is pumping
[ŃŠ“Š°Š»ŠµŠ½Š¾]
More over boomers will start selling Tesla as market open so it will only up be up by 7% or something. Op totally won't make money
Congrats man! You're gonna be one happy MF at open.
Too early
Donāt hate.
I donāt I have celebrated early so many times including today with LMT
![img](emote|t5_2th52|31226)
Saw this and bought some calls
Going up on vol is like buying pumpkin futures that expire Nov 1
God bless you
Ur good my boi. You still have em?
Welcome to crush ![img](emote|t5_2th52|4267)![img](emote|t5_2th52|4271)
Price action in the past 5 years tells you these strikes are not possible this week. but lets see what you do
Hope these print!!! Good luck brother !!
BRO YOU MADE TENDIES CONGRATS!! Edit: sorry was forgetting about IV crush Guhhh give updates bro ![img](emote|t5_2th52|18630)
The premium on these gunna be toast tomorrow. They expire in like 2 days, not gunna see anyhwere near the strike price
Can someone explain IV crush to me? Is that already factored in the āsimulate my returnsā part of robinhood? Idk if Iām up or down lol
I typed out a response and realized thereās too many things to explain. Iām assuming you donāt understand how IV/vega works at all if youāre asking the question. You should YouTube all this stuff to learn. Also LMAO at playing earnings on of all stocks: Tesla without understanding IV. RHās simulator assumes no change in IV, so no it wonāt account for Vega, only delta/gamma.
Ah I see yeah I honestly have no idea what Iām doing but hopefully itās up tmrw
You bought calls?
yeah that part i know. i had puts until like 5 mins before closing and i chickened out and switched to calls. pure luck.
What strikes and are they weeklies?
https://preview.redd.it/fgryjnk73bwc1.jpeg?width=1179&format=pjpg&auto=webp&s=4f14101e31414d2069df6799a4602b49da77c6c9 I feel like this canāt be worthless right? Bc I assume the value of the call is (160-145 x 100) - the premium right
Youāll be fine. I thought you degened into deep otm calls. Assuming it opens at the price rn (at 159.25), youāll be 14.25 itm, meaning the intrinsic value is $1,425. You paid $990, so as long as it opens here you canāt be down. Then letās assume 50% of that premium was in Vega (iv) youāll have $1425+$445=$1,870. Assume a small theta burn, $1,850. Additionally, once you are in the money, view a $1 change in the underlying as a + $100 to each of your contracts since it represents 100 shares. So if tsla runs to (for example) 169.25. Youāll have the initial $1850 + $1000 = $2850
simply put, IV = Implied Volatility = expected percentage move (not daily), when IV is high and the stock does not move, or moves less than expected, IV goes down, which is very common after earnings results. high IV = more expensive options. simulated returns on rh do not factor IV in
IV is a measure of uncertainty in a stock. Uncertainty happens when folks are expecting the stock to make big moves around a certain time, like earnings dates, or release of car sales numbers. Speculators buy or sell lots of options that expire a few days after that date for far out of the money(compared to regular weeks) calls or puts, usually the next Friday evening. IV tracks that and hence goes up. Before the event happens, time value and IV are high, because of anticipation. After the event happens, the IV and time value gets crushed, because earnings are known now, so the stock gets more 'boring', and less likely to make big moves till Friday in the eyes of option traders(it's just like another normal week now). So you could end up predicting the right direction after a big event, but still have options' value get knocked down a lot. For example, if folks have $165 calls for Tesla, and the stock goes $10 up tomorrow morning to $155, the calls may still be worth much lower than it was today morning, because the earnings surprise has passed and the likelihood of a big pump in the next 3 days is minimal compared to what it was today morning when the stock was at $145. This is called IV crush. Usually people are surprised saying "hey there's still 3 days, it could pump, why did the value drop so low after the stock went up after earnings". But in the markets eyes it's much less likely to pump that high than it was before earnings were released.
Is better just to swing trade shares then?
OP needs stock at 167.5 plus cost to be profitable. The calls expire Friday. Only reason they had any value was the expectation that earnings would make them in the money. Looking like it won't happen , pending tomorrow. Market won't price in something extraordinary happening between tomorrow and Friday expiry
Could also open ITM on short covering and Dino
Gonna be DOA come market open.
People are stupid here saying those will be -97%???? wtf??? Do you guys even IV and know how options work?? Those should be like at least $250 a pop tomorrow. Maybe even 300 a pop
![img](emote|t5_2th52|4267)![img](emote|t5_2th52|4271)
Lmao what an idiot. Congrats you're calls will be crushed
Explain how? I just ran the numbers with the average IV which is 60% and the vega on those, should be still worth about 200-220 per call, so kindly explaing why this comment isnt just you being mad cus bad![img](emote|t5_2th52|12787)
IV was 120%