Quote:
Originally Posted by Tyga11
I've been monitoring the market pretty extensively since the Pandemic. Seems like it's pretty easy to time trades especially when the market is in a free fall / going up.
I bought calls on META today when it was down 3.50% mid morning because I saw the market turning. Sold at the close when it was down 1%.
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this is exactly why i warned you earlier. you have no experience, and just because a one time gain, you think you are all good and expert, lol
your expedia call option is down because
1. theta decay, as it approaches the end of contract, theta decay will become faster, then the swing is going to be wilder
theta decay is time. when you bought it last week (10 days), theta decay is not large because there is still time to hit your contract strike price. now you only have 5 days to hit your strike price, so theta decay is getting smaller and your chance to hit the strike price is getting smaller.
think of theta decay as a time bomb, when your time bomb is 1 hour, your chance of defusing it is high because 1 hour of time to think. now lets say the time bomb is 5 minutes, then your chance of defusing it is lower.
2. IV - implied volatility
you maybe bought the expedia when the IV was high, then now IV is low, that along with the theta decay can cause a lower contract price even though the stock price is up
do not assume just because you have been monitoring, that means you are an expert in options.
monitoring and doing actual trading is two different thing. similar to watching someone teaching how to swim on youtube and pool, and doing the actual swimming itself
like i said, it's easy when everyone makes money, then when it's down 30%, that's when you start crying and question why
lol
Quote:
Originally Posted by dangerus_car
you make easy money, but you also lose easy money. with options, you must have total control of every movement.
yes, now stock is in bullish mode for the past week. you make easy money, just wait when you buy calls then the market turn.
tell me if you are not stressing up over 30%-40% loss  |