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no joke there are several people on /r/wallstreetbets that have turned a few hundred dollars into $1M+ in 2 months.
by tempsy 7y ago
no joke there are several people on /r/wallstreetbets that have turned a few hundred dollars into $1M+ in 2 months.
- toomuchtodo 7y agoShort dated deep out of the money TSLA calls are still gambling, but gambling you can do from home.
- tempsy 7y agowhat's your point? the sub is literally called "wall street bets"...there's no confusion as to the nature of what everyone is doing. you can write off up to $3K in capital losses a year. people who jokingly bought $420 and $690 strike options just a few weeks ago are literally up six and seven figures each.
- toomuchtodo 7y agoSure! But there are also folks who have lost hundreds of thousands of dollars. Survivorship bias.
- tempsy 7y agoOK...? I said nothing about the fact there are many more people who lost money or that this isn't akin to gambling. But there are few investments outside of options that can turn a few hundred dollars into $1M in a matter of weeks.
- TacoToni 7y agowow, you werent kidding. some folks made out like bandits. what a rush.
- manmal 7y agoI guess they could also have lost an almost equally insane amount if things had gone south?
- tempsy 7y agoNo... I wouldn't consider $500 in capital losses an "equally insane amount"...
- manmal 7y agoI thought that you can only have such high leverage if you bought super meta products that expose risk, meaning you borrow money for that bet and which you‘d have to pay back if the hoped-for increase doesn’t come.
- tempsy 7y agonot with buying options - your max loss is just what you buy it for.
- zaroth 7y agoFor example the $500 call options on TSLA which expire on Friday. They were on-sale all month, giving you the option to buy a share of TSLA at $500 up until this Friday. Today they were selling for ~$85/share. But on Jan 1 they were selling for ~$5/share, and tomorrow morning it looks like they will be worth maybe $150/share. 30x in a month for a True Believer -- sure wish I had done it! [1] - https://www.marketwatch.com/investing/stock/tsla/option/TSLA%23A3120C600000 https://www.marketwatch.com/investing/stock/tsla/option/TSLA...
- sf_rob 7y agoWhen buying call options the max loss is the purchase price. There's not a symmetric return as there is with owning stocks directly. The reason you can make so much with so little capital is that the probability of the stock price moving above strike price of the call option is low assuming that the strike price is much higher than the current price and the expiration date is soon
- manmal 7y agoAh, thanks for the explanation!
- xkjkls 7y agoThere are also several people I know who have done so at a craps table. That doesn't make it a sustainable or recommendable activity.
- tempsy 7y agoI call BS. There's no casino game outside of a slot machine that someone could play that could turn a few hundred dollars into $1M in a gambling session. This difference you're missing is the upside is asymmetric with options. Your losses are capped but your gains are essentially unlimited. In a typical casino game the house edge is >50%. If you're turning $500 into $1M at a blackjack or craps table you're cheating.
- lucasmullens 7y agoCan't you go all-in 12 times to get there? It would only work for one out a few thousand people, but it's certainly possible.
- tempsy 7y agouh find me one real life example of someone doing that and succeeding. on a craps table there's no bet that has no house advantage other than the behind the line bet. Same with roulette. and no, usually these tables have max bets, so it wouldn't be possible, if you had got to $500k (somehow), to bet that on a single bet. again, the difference is the upside is asymmetric with options. also it's never an all or nothing bet like a coin flip - if your option value goes in the wrong direction you can sell for a partial loss.
- bduerst 7y ago12 second search: https://www.youtube.com/watch?v=kWok7813jZU https://www.youtube.com/watch?v=kWok7813jZU Splitting hairs over whether or not it's in a casino isn't really a requirement to being gambling, which is kind of the point.
- qaq 7y agohow is that tracked?
- tempsy 7y agohow is what tracked?
- buryat 7y agotheta will crush em
- tempsy 7y agolol theta will not crush anyone who jokingly bought $420 and $690 options after last fall's earnings where the stock jumped to $320.
- Traster 7y agoIf you believe screenshots on /r/wallstreetbets and don't think they're all just photoshopping in fake gains once the stock went up.