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  • #1

    Stock option question

    Been reading a stock option book and want to make my first play but wanna make sure my math is correct so here goes.

    Wanting to buy F140118C00019000 call option at $19

    Want to spend $1000 at current price it would give me 5000 options

    Will only be profitable to execute at 19.20

    Profit margin if executed at $20 would be 3k ( 4k-1k)

    Is my math correct? not counting brokerage fees.
    Tags: None
  • #2
    Originally posted by 03mustangdude View Post
    Been reading a stock option book and want to make my first play but wanna make sure my math is correct so here goes.

    Wanting to buy F140118C00019000 call option at $19

    Want to spend $1000 at current price it would give me 5000 options

    Will only be profitable to execute at 19.20

    Profit margin if executed at $20 would be 3k ( 4k-1k)

    Is my math correct? not counting brokerage fees.
    5,000 shares * $1 = $5,000

    less the thousand you spent on the option = $4,000 profit if you exercise (or sell option) when F is $20.

    Your math is double counting the cost of the call. If you take the approach that it's only profitable at $19.20 you don't have to back the cost out again. In this case, it's $0.80 profit * 5,000 shares = $4,000 profit.
    Originally posted by davbrucas
    I want to like Slow99 since people I know say he's a good guy, but just about everything he posts is condescending and passive aggressive.

    Most people I talk to have nothing but good things to say about you, but you sure come across as a condescending prick. Do you have an inferiority complex you've attempted to overcome through overachievement? Or were you fondled as a child?

    You and slow99 should date. You both have passive aggressiveness down pat.

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    • #3
      but if it only hits 19.19 it would be a worthless option correct?

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      • #4
        Originally posted by 03mustangdude View Post
        but if it only hits 19.19 it would be a worthless option correct?
        No, above strike is in the money.

        If it's at $18.99, you lose all $1,000.

        If it's at $19.15 you make $750 to help cover the cost of your option and lose a net $250.

        You're confusing breakeven with in-the-money.
        Originally posted by davbrucas
        I want to like Slow99 since people I know say he's a good guy, but just about everything he posts is condescending and passive aggressive.

        Most people I talk to have nothing but good things to say about you, but you sure come across as a condescending prick. Do you have an inferiority complex you've attempted to overcome through overachievement? Or were you fondled as a child?

        You and slow99 should date. You both have passive aggressiveness down pat.

        Comment

        • #5
          In my brokerage here is what im getting for 50 contracts
          The Estimated Trade Value of this order is $1,039.33.
          Now im very confused.

          Comment

          • #6
            Originally posted by 03mustangdude View Post
            In my brokerage here is what im getting for 50 contracts

            Now im very confused.
            What on the extra $39? Commission, etc, I can't help you with that.
            Originally posted by davbrucas
            I want to like Slow99 since people I know say he's a good guy, but just about everything he posts is condescending and passive aggressive.

            Most people I talk to have nothing but good things to say about you, but you sure come across as a condescending prick. Do you have an inferiority complex you've attempted to overcome through overachievement? Or were you fondled as a child?

            You and slow99 should date. You both have passive aggressiveness down pat.

            Comment

            • #7
              no 50 contracts = 500 options which would make my cost per option at 2.00?

              while asking price is .20 per option, that's where i'm getting confused.

              Comment

              • #8
                Originally posted by 03mustangdude View Post
                no 50 contracts = 500 options which would make my cost per option at 2.00?

                while asking price is .20 per option, that's where i'm getting confused.
                Dude, the multiplier is 100, not 10. 50 contracts = 5000 options on a per share basis, which is where this thread started.
                Originally posted by davbrucas
                I want to like Slow99 since people I know say he's a good guy, but just about everything he posts is condescending and passive aggressive.

                Most people I talk to have nothing but good things to say about you, but you sure come across as a condescending prick. Do you have an inferiority complex you've attempted to overcome through overachievement? Or were you fondled as a child?

                You and slow99 should date. You both have passive aggressiveness down pat.

                Comment

                • #9
                  dahm your right thanks so much for the help if I could rep on here I totally would.

                  Comment

                  • #10
                    Dahm?
                    http://www.truthcontest.com/entries/...iversal-truth/

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