3 ms·
Redditor turns $125K in Tesla options into $4.2M in 2 weeks
- WheelsAtLarge 7y agoI also want to hear about the other side of this trade. Turning a 125k sale into a 4.2M loss. This sounds like a great trade but very few people would buy 125k in options without being able to take the hit had it gone against him. It's very easy to lose money with options even if you are an expert. Had the trade gone against him it's very likely he would have lost all his money.
- mdorazio 7y agoI believe he bought long calls, so the downside risk was probably not that significant - something like 50% if the stock went down to a value-based level. Short sellers, on the other hand, have been losing their shirts at this same level for some time now.
- tempsy 7y agoYes it was a gamble. The thing he had going is the expiration date was long enough that he could’ve cut his losses quickly if things went the wrong way, but last 2 days have been absolutely insane.
- csomar 7y agoMost option traders are hedging/arbing with other instruments. It's very possible (and more likely) the other side of the trade made money too.
- mdotk 7y agoIt's options, they just expire worthless. He could never lose $4.2M