4 ms·

Agree 100%. I think the smartest bet here is buying put options that expire far out. Currently, the price of the $320 GME PUT expiring in Jan 2022 is $240. Tha

• beervirus 6y ago
  So you're paying $24,000 to bet that the stock will fall below a breakeven price of $80. Even if we assume that that's likely to happen, your maximum upside (i.e. if the stock goes to zero) is only $8,000. It is not a trade I would make.
• chrchang523 6y ago
  I've been keeping an eye on the far-out-dated put options, and I haven't seen anything that's more compelling than simply leaving money parked in an index fund. The expectation that GME will drop back down to Earth over that timeframe remains priced in. The main takeaway from this incident is that margin-call-constrained short selling is even more dangerous than previously understood.
  • fairity 6y ago
    >The expectation that GME will drop back down to Earth over that timeframe remains priced in. Yea, it does seem largely priced in, but perhaps not completely. If share price is $60 in 1 year, the ROI on that contract would be 9% -- so slightly better than what you'd reasonably expect an index fund to return. A $60 share price is higher than GME's all-time high prior this fiasco.
    • chrchang523 6y ago
      The inferior tax treatment of put options relative to index funds also matters. Not tempted.
• ab_testing 6y ago
  THe price of that put is $240 . So GME has to fall to 320-240 = $80. Also the cost of that put is twenty four thousand dollars. Not exactly chump change.