Top products from r/wallstreetbets

We found 93 product mentions on r/wallstreetbets. We ranked the 363 resulting products by number of redditors who mentioned them. Here are the top 20.

Next page

Top comments that mention products on r/wallstreetbets:

u/Guinness · 11 pointsr/wallstreetbets

> current stock's price right?

No. If you own 300 shares, you can create 3 options. Think of an option is a legal contract where, depending upon the contract, someone has a CHOICE to force the buying/selling of the underlying shares.

So, you own 300 shares. You can create up to 3 options. But you only want to create 1 option in this example, for 100 shares.

Now, when you create the option, you can choose at what price you want the option to become "in the money" which basically means the option is worth >= $0.

In this case you are SELLING someone else the choice for them to purchase shares, at or before the expiration date, at or above the strike price.

You pick the strike price when you create the option.

If the current price right now of a stock is $100. You can pick any strike price, at, below, or above $100. A strike price of say, $90 - $110 is called "around the money" for selling a call. A strike price at or below the current share price is called "in the money". A strike price above the current price is called "out of the money".

So lets say you're selling a call for a stock currently at $100. The options expiration date is 30 days out. And the strike price YOU CHOOSE is $120. That option will only execute IF the stock price, within the next 30 days, goes above $120. Since the person you are selling the option to has the OPTION to buy it at $120, they don't necessarily always execute their option to. They want to make as much money as possible. So if in 1 of the 30 days, the stock price of the option hits $120.01, technically the buyer can cash in and force you to sell your 100 shares. Netting them 1 cent per share, or a grand total of $1. However, they wont because their break even cost is the strike price ($120) + cost of trade (lets just say $5) plus the cost of the option (lets say 10%). So their break even price would be $132.05. ((strike price * 1.10) + $5/100 shares)

Now, if they don't execute the option within that time period (30 days) you get the option price (10%) netting $10/share and you keep the shares. Option prices vary wildly depending upon time to expiration (the longer the option lasts for, the more expensive, because the greater chance it has of reaching that price) as well as how deep in the money or out of the money it is. There are other factors, as we get deeper into theoretical values for instruments. Things like time decay, the fed funds rate, volatility, etc are all used for a "basic" model of calculating the theoretical value of such a contract. But thats a more advanced topic.

If you're selling far out of the money options, most likely you'll make maybe 1-3%, depending.

This is also why people on /r/wallstreetbets can yolo SPY calls/puts 3 days out for like $10. Because the chance of it reaching in the money is slim to none. But sometimes happens.

The guy that taught me options wrote a really great book called Option Pricing & Volatility. I suggest this book. The first 1-3 chapters goes over the real basics of options.

I have all his teaching materials laying around somewhere, if they're not copyrighted maybe I can scan and share.

Also just a small disclaimer, I might've gotten some of the terminology wrong. I always get the whole buy/sell put/call twisted when commenting on the fly on my phone.

u/ddak88 · 21 pointsr/wallstreetbets

My friend recommended me this when I first started, but the truth is all the reading in the world isn't going to give you real-world experience. Start small, do your research, thorough research. Learn about greeks, IV, when to take profit, ect. Study the stocks you're interested in and know about, don't worry about trying to follow someone else's trades on a company you know nothing about.

Personally, I started small with 250 and made smart choices to bump it up to 2400 in three weeks, but I got cocky and didn't fully research an investment so I lost 1000 in one trade. If I had kept a level head I would have noticed that there was a significant short interest trying to drive the stock down and the low volume added fuel to the fire. Undervalued or not, hedge funds with billions to throw around can influence the stock price of most companies quite a bit, always be aware of that.

Once you gain some experience and understanding, day trading with the current level of volatility is pretty easy albeit risky at times. Just remember to not gamble with money you can't afford to lose. It may be boring but I keep about 5/6ths of my portfolio in equity that I rarely touch. For every one person you see on this sub that turns 40k into 250k on a MU yolo, there are ten others that turned their 40k into 0k. Be smart and goodluck!

u/saluja04 · 3 pointsr/wallstreetbets

Sure, I can try to help you out. I wouldn't call myself an expert, but I've studied them and spent time at an options market-making firm on Wall Street. My education in derivatives started at university, where I took an options and derivatives class. We used John C Hull's book, Options, Futures and Other Derivaties (link is to latest, 9th edition; you can use previous editions). Incidentally, Hull is a professor at Universary of Toronto.

While employed, we used Sheldon Natenberg's Option Volatility & Pricing: Advanced Trading Strategies and Techniques. The text is on the dry-academic side but is definitely an excellent resource.

You (and others) can also check out Khan Academy's excellent introductory videos here.

I'm not sure how I'll be able to mentor you, but I'm happy to give it shot. Let me know what I can do to help you out!

u/NicolasDegreas · 62 pointsr/wallstreetbets

So basically... You had no experience whatsoever with the stock market, during a bull market you were able to outperform the S&P by 12% or so (Accounting for leverage) and now you think you're going to do well with options?

Let me tell you a story, in Business class in High School, we had this small stock market challenge, one group in particular, from my school, with no knowledge of finance whatsoever, reached 90% gains in just a month, they followed by dropping to -10% overall. Imagine if that was a 'real' account and they had reached 90% just to start fucking with options then tank to -200% and be indebted at 15 years old, well, that's what you're doing.

Anyway, I wish you the best of luck, at least read a book about options, VERY different from stocks, here's my recommendation "Options, Futures, and Other Derivatives" by John Hull

PS: That group was my group, I did all of the trades, which were ALL on 3x leveraged ETFs, pretty wild rollercoaster of emotions when I sank from +90% to -10%, from #1 to #36,205. The reward was minimal, but my dopamine receptors were already counting the win. The people who beat us, though, were +130%, if we'd gotten our last move right (It was about the elections), we would've gone to +300%.

u/nextlevelyoloswag · 2 pointsr/wallstreetbets
  1. "Closing" is the term that covers both. "Selling" would refer covering a long position, closing a short position would involve buying.

  2. Sort of. Technically the contract is between you and a clearinghouse. The clearinghouse exists to insure liquidity if the counterparty on the other end of the contract fails to meet their obligations. This prevents you from having to worry about who "owns" the other side of your contract.

  3. If liquidity exists there will be people to buy it. With zero volume/open interest you'll have a harder time closing it because you'll need a market. There are ways this can be done (especially for institutional traders or people with DMA), but the simplest answer is if there's no volume or open interest "its complicated". Try not to end up in this scenario.

    You are fundamentally misunderstanding markets in the second part. If every buyer has a seller then the transactions are "closed" and nothing happens at expiration day. If you're left holding the bag on expiration day you'll be forced to take issue of the underlying (in the case of a long) or find the stock to give to the counterparty (in the case of a short).

  4. Yes. With American options you can exercise at any time. Unless you're intended to get a screaming deal on some stock it's usually better to just sell it off.

  5. Options give you the right but not the obligation to the underlying. If it expires ITM you can choose to not exercise. However, in reality most brokers will automatically exercise your options at expiration you so they don't have to ask everyone. So if you cannot afford to exercise you will be margin called and forced to come up with the cash, which as you pointed out will be the difference between the total margin given to you and what you can sell the stock for (plus interest on the margin). I've never had this happen but a broker might do this for you since every broker I've ever dealt with has a "we can sell everything in your account to get our money" clause. They'd rather just sell off your stock + whatever else in your account, take their money, and walk away.

  6. This is options 101. So I'm gonna give you the best book to learn from. Options Volatility and Pricing is the bible of options trading. There are many books, but this book beats "just google it" 10 times over. The material in this is so valuable you can not afford to not have on it on your desk. Read through most of this book before starting to trade options. Additionally, TastyTrade is useful once you've gotten through Options Volatility and Pricing because it deals with far more real world scenarios and gives some legitimately good trading advice. However, they skimp on A LOT of the basics of markets and trading, which Option Volatility and Pricing covers quite well.

u/ProGnuRights · 6 pointsr/wallstreetbets

You can just use a reserve or hidden order, and so can anyone who wants to hide their true order size. I don't know exactly what you're looking for, but I don't think you'll find much advantage in order sizes.

The other thing you don't know is whether someone else is buying or a market maker is covering. Say a stock is at 4.40/4.41 and after many small orders at 4.41, a big order gets filled at 4.4024. That's likely a market maker buying at 4.4024 and selling them to retails at 4.41. So if you wanted to find some way to gain an advantage using this information, you'd have to remove that as well.

And then there's the issue of dark pools, which you can't see, and where (I think) a lot of the really big transactions take place.

Next, you don't know if someone is buying big or selling big. For every transaction, there's a buyer and a seller, right? So if there was just an order of 1 million shares, one person bought a lot of 1 million and one person sold a lot of 1 million. So which is more significant? Which is the market maker, if either? If you're somehow actually looking at the orders as they get to the exchange, you could see if it's a buyer or a seller I guess, but you're not going to see that.

IMO the real thing you could measure is spikes in trade volume, but again there's so much you'd need to filter out to have a good idea of whether it was a single trade that caused the spike. This is similar to looking at bid vs ask size, but they both don't necessarily mean one big order.

Lastly, I'm no expert, but I don't think the guy you quoted was either. As I understand it, there's generally not a human on the other side of the screen selling you the contracts, it's usually algorithms, with lower and upper bounds (bid-ask) based on black-scholes, which they won't cross For example, they may be willing to pay up to 3.20 for an option and sell it for down to 3.35, since their equation gives them a fair price of around 2.27. The spread may show up as 3.00 / 3.55, but if you put in a bid of 3.15 they'll all match you. They'll stop matching once you pass the threshold, so when you bid 3.25, and will probably fill once you bid 3.35. Now if a human crosses that spread on the other side, you can get a fill at 3.25 or 3.30. I really doubt many people care what size you put in though. And if they're all at the same time, I think they'll all show up together anyways on level 2. Again, maybe I'm totally wrong, but I don't think so. If you want to learn the facts (as I probably should), I believe this is the go-to textbook.

u/gettingtoohot · 2 pointsr/wallstreetbets

In regards to your question, a short answer would be, it depends. If you purchase that option during the day and the underlying stock is moving towards your strike price, you already have a profit as long as you sale that option that same day and do it quickly. If you wait and the movement of the underlying remains flat, you will notice the value of your option diminishes due to time decay. The estimated decay is described by the theta value of your option. If it has the value of -0.2, then that option will lose 20 cents per day. Theta will increase the closer you are to expiration.

If you wait until expiration or near expiration, the price of the underlying stock must reach the strike price + the premium you paid in order to make even. If this condition is met earlier, then you might be able to make a profit depending on other parameters: time until expiration, strike price, the greeks (delta, theta, gamma, and vega are the more important one), underlying stock price, volatility, and more. I have listed the more important one. I really recommend you this short book if you want to learn more. Understanding Options The author's style of writing is very easy to read.

u/BigBucksGentleman · 187 pointsr/wallstreetbets

Look to sell options only in premium rich underlyings (IV rank > 50). Sell around 45 days until expiration. Close between 25% to 50% of max profit. Make sure to roll to defend positions (look to roll around 20 DTE). Sell the 30 delta options, and look to collect 1/3 the width of a spread. If you really want to be a big dick player, beta weight your portfolio to SPY, and keep it delta neutral.

Edit: I got a lot of PMs concerning more information to this approach. Both TastyTrade and OptionAlpha are great resources to learn, and spell out this approach further. Other, more in depth, sources to consider are Option Volatility and Pricing and Options, Futures, and Other Derivatives.

u/MakeoverBelly · 14 pointsr/wallstreetbets

"Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market", 1999

"Dow 40,000: Strategies for Profiting from the Greatest Bull Market in History", 1999

"Dow 100,000: Fact or Fiction", 1999

u/J1701 · 2 pointsr/wallstreetbets

Someone here recommended me this book awhile ago. It was easy to read and understand and I feel like I learned a lot from it. Would also recommend.

u/Bulletproof_Haas · 14 pointsr/wallstreetbets

Realize that you always need to be learning and taking in new information. You will never "master" the market, nobody else has mastered it either, so take others' opinions with a grain of salt.

As much as people joke around here it can be a good way to spur new thought. If someone says the market will crash in 3 days? Why? Do you agree? If so, why? What data can you come up with to support that? (Etc, etc). Your goal should be to become knowledgeable enough to look at the economic landscape and come up with a personal opinion about what will happen next.

Once you have an informed hypothesis on what will occur then you make investments based on those convictions.

u/entropywins8 · 19 pointsr/wallstreetbets

Don't forget John Paulson, who made muuuuch more than Burry in 2007-2008.

+$15,000,000,000 would have made a good Robinhood Screenshot.

Biggest YOLO of all time.

u/excited_by_typos · 1 pointr/wallstreetbets

> im getting options approved this week.

Read this and save yourself a few thousand dollars. Seriously. But to answer your question, you need cash to sell puts - not stock.

u/entropywins9 · 5 pointsr/wallstreetbets

I would add:

The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History by Gregory Zuckerman

More Money Than God Hedge Funds and the Making of a New Elite by Sebastian Mallaby

u/BigDaddyDLo · 1 pointr/wallstreetbets

I was going to recommend this but I'm guessing they'd garnish its value in bankruptcy court.

u/CHAINSAW_VASECTOMY · 6 pointsr/wallstreetbets

When did you guys become such cocky shits that are too good to recommend a fucking book or website to this guy?

Check out Rookie's Guide to Options first. You should have no problem writing covered calls on a stock you own right now, but must have 100 shares and plan to keep holding.

If you want a primer on 'pricing,' just know that options price is all based on volatility. If people expect high volatility (like around earnings) they will bid up prices on options, making them more expensive right before announcement. After an event like earnings, volatility drops. To make money on options, you usually have to make a correct estimate on the direction and/or volatility of the stock, depending on if you've hedged one out or not.

u/diemunkiesdie · 2 pointsr/wallstreetbets

The first edition is from 1988, and the Amazon reviews for the second edition say that there are a lot of errors in the new version. How well does the 1988 edition hold up to current trading strategies? Or is there another newer book that you would recommend?

EDIT: Any thoughts on The Rookie's Guide to Options; 2nd edition: The Beginner's Handbook of Trading Equity Options by Mark D Wolfinger? Or Options as a Strategic Investment by Lawrence G. McMillan?

u/LAbtcMan · 138 pointsr/wallstreetbets

Better yet

James Cordier is the writer of a book called 'The Complete Guide To Option Selling'

u/burninnchurnin · 16 pointsr/wallstreetbets

Pretty sure someone posted this as a joke, but currently am reading this monster. Probably a bit deep of a read if you are just starting out.

u/LastSprinkles · 46 pointsr/wallstreetbets

James Cordier, the guy behind this fiasco, wrote a book on selling options. The best part of his marketing is this:
> Option-Selling Strategy and Risk Management
Choosing the right options to sell, the most powerfulspread strategies, the mechanics of selling, and protecting yourself from downside risk like a pro

u/kevstev · 2 pointsr/wallstreetbets

I am guessing either earnings passed and were meh enough to not move the price so the implied volatility fell yet the price remained stagnant, or its just time decay.

I hate to be this guy but read a book you illiterate SOB. Trading stuff you have little understanding of is a great way to get wiped out quick. Just give me your money or at least let me know what underlyings you are trading so I can be on the other side of the trade.

Might as well give you a suggestion to read:

u/jeansaddiction · 1 pointr/wallstreetbets

I'm reading Margin of Safety right now, though it is extremely expensive. Was recommended to me by someone in another thread. It's about value investing.

u/magion · 3 pointsr/wallstreetbets

Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition

u/brintoul · 3 pointsr/wallstreetbets

I think you might be a bit unclear on how markets work.

Start with this.


u/Shark_life · 14 pointsr/wallstreetbets

Don't be a cheapfag and order this book. Read a chapter every night before your nightly fap session. When you've finished reading it cover to cover, read it again, and again, until you finally become straight.

u/FamousDrew · 2 pointsr/wallstreetbets

You need to slow way down. Do some book learnin and then research your options carefully. This is how you get trashed the first day out of the crib.

u/WhatsToBeSaidNow · 6 pointsr/wallstreetbets

And then PM me questions. If you have the risk tolerance and the capital to be doing what you're doing with TSLA and the mind to graduate with the degree you're getting you could be making a literal fortune. No joke.

u/econleech · 6 pointsr/wallstreetbets

If you really understand the basics, you should be able to answer your own questions. Since you can't, I assume you don't understand the basics, so read this book. When you finish, read it 9 more times.

u/[deleted] · 2 pointsr/wallstreetbets

Reminiscences of a Stock Operator should be required reading for this sub, moreso than any other investment book ever written.

"It's a bear market!" - words to remember in the coming years of knife-catching (read the book to understand the entire significance)

u/The_Gongshow · 3 pointsr/wallstreetbets

I bought a couple of these when I was just starting out.

Nowadays I keep one or two around as paper weights and used the rest just to wipe my ass.

u/ostrich_effect · 2 pointsr/wallstreetbets

Take that $100 and buy this:

Use the remaining $25 for a case of whatever shitty beer people your age drink today. In my youth it was the beast. Not sure that even exists anymore.