4 ms·

Since he bought his puts on 6/26, BTC is up 9.5%, MSTR is up 9.9% and COIN is up 13.5%. He's already pretty deep underwater.

foolmeonce 5y ago
If you are betting something will tank then you don't time the market to get to put at the best price. Buying these puts either pays out a lot if there is a giant dive before they expire or is a cost to cover that time period.
- heropaul 5y ago
  Timing is everything, being early is the same as being wrong.
jschulenklopper 5y ago
Is he underwater? Aren't the put options that he bought previously just not cheaper now? On options being underwater: "Underwater stock options have an exercise price which is greater than the market price of the underlying stock." Is that his situation?
- ludamad 5y ago
  To be "short" you can sell borrowed equities, sell calls that you write, or buy put options. Buying put options will cap your risk at the option price (I think underwater just meant "lost lots of money" - more likely to go out of bounds with the first two kinds of short positions)
  - jschulenklopper 5y ago
    Sorry, but no. Those three are all 'bearish' strategies, but "going short" is selling something you don't have. Buying put options isn't short selling, although both are anticipating a decrease in the value of something. Underwater is the term for a contract or asset that is worth less than its notional value. https://www.investopedia.com/articles/trading/092613/difference-between-short-selling-and-put-options.asp https://www.investopedia.com/articles/trading/092613/differe... https://www.investopedia.com/terms/u/underwater.asp https://www.investopedia.com/terms/u/underwater.asp
    - ludamad 5y ago
      Thanks for the clarification. I used "short" in quotes as that was the article terminology.
- retube 5y ago
  If the asset he has bought is now cheaper, then yes he is "underwater" (i.e he has lost money on a mark-to-market basis - if he was to close out he would crystallize a loss)
puranjay 5y ago
This is the "return to normal" pump before the crash.
- atatatat 5y ago
  What crash, why?

foolmeonce 5y ago

If you are betting something will tank then you don't time the market to get to put at the best price. Buying these puts either pays out a lot if there is a giant dive before they expire or is a cost to cover that time period.

heropaul 5y ago
Timing is everything, being early is the same as being wrong.

jschulenklopper 5y ago

Is he underwater? Aren't the put options that he bought previously just not cheaper now? On options being underwater: "Underwater stock options have an exercise price which is greater than the market price of the underlying stock." Is that his situation?

ludamad 5y ago
To be "short" you can sell borrowed equities, sell calls that you write, or buy put options. Buying put options will cap your risk at the option price (I think underwater just meant "lost lots of money" - more likely to go out of bounds with the first two kinds of short positions)
- jschulenklopper 5y ago
  Sorry, but no. Those three are all 'bearish' strategies, but "going short" is selling something you don't have. Buying put options isn't short selling, although both are anticipating a decrease in the value of something. Underwater is the term for a contract or asset that is worth less than its notional value. https://www.investopedia.com/articles/trading/092613/difference-between-short-selling-and-put-options.asp https://www.investopedia.com/articles/trading/092613/differe... https://www.investopedia.com/terms/u/underwater.asp https://www.investopedia.com/terms/u/underwater.asp
  - ludamad 5y ago
    Thanks for the clarification. I used "short" in quotes as that was the article terminology.
retube 5y ago
If the asset he has bought is now cheaper, then yes he is "underwater" (i.e he has lost money on a mark-to-market basis - if he was to close out he would crystallize a loss)

puranjay 5y ago

This is the "return to normal" pump before the crash.

atatatat 5y ago
What crash, why?