Puts semi-long term

what he meant is fsxomceau has such a bad track record for making the right move that the sure bet is to go against him.

so he would buy puts when fscomeau says to buy calls.

for the newbies:

put options means you are betting the stock will go down.

call option means you are betting the stock will go up.

now, they have different expiry dates. you can buy one that expires in a week or some expire in a month or 2 or 3 months, one that expires in a few years. guess which one is more expensive? the longer the time, the more it costs.

so now there is another price difference in what level you buy.

lets say a stock (ABC) is trading at 5 dollars and you bet it is going to 6 bucks. your friend bets the stock will go to 10 bucks. guess which one is more expensive? the 6 dollar bet is more expensive for it can get there faster and the odds are better.

a stock (ABC) going from 5 to 10 dollars is a huge stretch that rarely happens so the bet will be cheap for you it probably is just a hope and it most likely will not happen. so you want some time for your bet to be right so you buy 7 months of time, or June.

so to trade the option would order the ABC, 6 dollar , call option, JUNE.

you look it up and it says .50 cents. its seems cheap only .50 cents right? but the option controls 100 shares so it really is 50 dollars. i know its confusing but you get used to seeing .50 cents as really 50 dollars.

so on WSB you read that guys are making a fortune on options that expire in a week, but what you do not hear are the 99.8 % (almost all the people) that buy weeklies lose their money.

now i heard there are options that expire in a hour . crazy bets. that is much like a casino but if you are into casinos i think weeklies have more of a chance of making you money but its not serious investing, its a hard full tilt gambling .

almost every option trader has wiped out their account and every newbie thinks they will not but be prepared for you most likely will.

/r/wallstreetbets Thread Parent