So I am an options bunny to be fair, selling calls and puts I understand to be high risk, as your potential loss can go way beyond your initial investment, and get margin called, having to throw more money at a bad decision. 

Buying calls and puts at least limits the loss to your initial investment . And buy a call means you believe the stock is going up, whereas buying a put means you think the stock will go down. 

But a have a number of questions that I'd really like more experienced options traders to answer. First One is so far is what I have said correct?

My first options trade was $RKLB 20260116 2.0 CALL$ I paid $2.50 for it. This means I can excise it any time between now and jan 2026 and my total cost will be $4.50 per share. To me I intend to excise it and buy the underlying 100 stocks because quite frankly I am already in the money on this trade, but I want the stock and by jan 26 I believe it's going to be worth way way more than its current value of $4.90. Of course I get that as the buyer someone else now has $250 of my dollars so there is an opportunity cost there, but my money if still being put to good use, provided the stock continues to climb in price. But I can still sell the option early and realise a profit. But I see no reason to do this because I actually want the stock. So my understanding is this transaction is like putting down a deposit on some land now (for eg) at today's price, and knowing that something is going to change significantly that will make the land more valuable in the future. Second question, is this ideology correct?

Ok next, I also brought $RKLB 20260116 5.0 CALL$ It was substantially cheaper at $1.10. So deposit on the land is cheap compared to the first trade, and it's out of the money for now, but as at today I could sell it for a profit. but I wouldn't because I still believe the underlying stock will be worth way more than $6.10 by jan 2026. But, selling the option in this instance mite make more sense than the first trade because I make more on the leveraged instrument, than on the underlying shares. if Rklb goes to $8 great I'm in the money, but if it goes to $12, maybe I'm better off selling the option to realise the leveraged cash sooner. Question 3, is my reasoning logical Here? I mean the closer to expiration the less the option is worth. And my deposit was small, but my final payment is large if I excise. Your thoughts please 

Finally, Rklb builds rockets that go to space, it's only 1/3 of their business, their main business is selling satellites and satellite components for others. Oh incidentally they successfully launched their 50th rocket today, making history. Nobody in human history Has ever done this so fast and so successfully. But it is rocket science. That's why my option trades are @TigerPicks @TigerWire @TigerStars @Daily_Discussion @TigerPM @TigerStars long, short trades seem too risky.

# High Win Rate vs. High Profit: Which One is More Important?

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  • Cliff
    ·06-21
    Is my understanding correct? [Sad]
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