Why buy stocks if you can trade options

[TheRealBulBul]

3 hours ago, kran said:

Nee daggara $6000 unte

Case 1: Buy 1 Call Option contract at the SP of $60 for $60 premium .

             So, you are controlling 100 shares of AAPL.

             If AAPL price goes up by $60, your profit will be 100* $60 = $6000. 

             And your account balance will be $6000 + $6000 = $12000

             If AAPL price goes down to $60, your loss will be 100 * (-$60) = -$6000

            And your account balance will be $6000 - $6000 = 0

Case 2: Buy 50 stocks of AAPL

             If AAPL goes up by $60, profit will be 50 * $60 = $3000, Account balance will be $9000

             If AAPL goes down by $60, loss will be -$3000, Account balance will be $3000

So, Options konte, account zero aipoye chances untayi. Stocks konte, you will atleast have something in your account that can go up after a year or two.

You should compare with buying 100 stocks... with 50 stocks your profit is 3k and loss is 3k whereas with options it’s +_ 6k

[TheRealBulBul]

3 hours ago, kran said:

Nee daggara $6000 unte

Case 1: Buy 1 Call Option contract at the SP of $60 for $60 premium .

             So, you are controlling 100 shares of AAPL.

             If AAPL price goes up by $60, your profit will be 100* $60 = $6000. 

             And your account balance will be $6000 + $6000 = $12000

             If AAPL price goes down to $60, your loss will be 100 * (-$60) = -$6000

            And your account balance will be $6000 - $6000 = 0

Case 2: Buy 50 stocks of AAPL

             If AAPL goes up by $60, profit will be 50 * $60 = $3000, Account balance will be $9000

             If AAPL goes down by $60, loss will be -$3000, Account balance will be $3000

So, Options konte, account zero aipoye chances untayi. Stocks konte, you will atleast have something in your account that can go up after a year or 

Options: 1 call 100 stocks.. 6k investment 

if stock goes to 150.. my profit will be 3k on 6k investment 

if stock stays at 120.. no loss no gain 

if stock goes to 60.. loss is 6k on 6k investment 

if stock goes to 30.. loss is still 6k on 6k investment 

Stovks: 100 stocks.. 12k investment 

if stock goes to 150.. my profit will be 3k on 12k investment 

if stock stays at 120.. no loss no gain 

if stock goes to 60.. loss is 6k on 12k investment 

 if stock goes to 30.. loss is still 9k on  12k investment..

👆 that’s why I feel options are safe bet than stocks.. less risk and same gains as stocks with less investment..

 

I understand the dividend part but that’s small and there are lot of stocks that don’t pay dividend..

covered calls I get it.. but there is a risk there too if stock shoots up and it gets triggered, we miss the ride.. 

 

 

[TheRealBulBul]

2 hours ago, Tesla_Elon said:

Just example cheppa and i also said assuming you don’t sell it ani. Yes, you can sell it if buyers are available but even for mid level companies one bad news will drive away potential buyers in such case even if u wanted to sell at the current price u can’t 

Lock annadi nee initial investment.. 

I can always exercise the option at 60$ as long as it’s above 60$ and get out.. below 60$ it’s even better.. you loose more on stovks than options 

[TheRealBulBul]

2 hours ago, pandemkodi said:

You can sell covered calls on options as well . 

Really..  I do not know this.. have to research on this

[TheRealBulBul]

34 minutes ago, idibezwada said:

there is very less probability that you can buy a $60 call for $60 when the stock is trading at $120

Yesterday it was.. today it’s 63$ because stock was up to 123$

[TheRealBulBul]

2 hours ago, AndhraneedSCS said:

2023 option koni danini 2023 daka unchali ga. 

 

I have seen some of my options go to 100% and now turned -20%. 

Option value is relative to stock value.. beauty with options is you can at any time exercise and convert to stocks.. 

[pandemkodi]

31 minutes ago, TheRealBulBul said:

Options: 1 call 100 stocks.. 6k investment 

if stock goes to 150.. my profit will be 3k on 6k investment 

if stock stays at 120.. no loss no gain 

if stock goes to 60.. loss is 6k on 6k investment 

if stock goes to 30.. loss is still 6k on 6k investment 

Stovks: 100 stocks.. 12k investment 

if stock goes to 150.. my profit will be 3k on 12k investment 

if stock stays at 120.. no loss no gain 

if stock goes to 60.. loss is 6k on 12k investment 

 if stock goes to 30.. loss is still 9k on  12k investment..

👆 that’s why I feel options are safe bet than stocks.. less risk and same gains as stocks with less investment..

 

I understand the dividend part but that’s small and there are lot of stocks that don’t pay dividend..

covered calls I get it.. but there is a risk there too if stock shoots up and it gets triggered, we miss the ride.. 

 

 

 look at the percentage not the dollar amount 

[VictoryTDP]

23 minutes ago, TheRealBulBul said:

Really..  I do not know this.. have to research on this

Just keep selling some Way otm call and collect premium 

[idibezwada]

24 minutes ago, TheRealBulBul said:

Yesterday it was.. today it’s 63$ because stock was up to 123$

may be you are looking at bid price and not ask or you are missing out the dividends part for the next 2yrs which is almost for 8 quarters..it will always be included in the option pricing

[AndhraneedSCS]

26 minutes ago, TheRealBulBul said:

Option value is relative to stock value.. beauty with options is you can at any time exercise and convert to stocks.. 

Option Exercise cheyyadam antha waste pani inkokati undadhu. 

 

I think it is much better to sell the option and buy the stock and make a little bit of money in the process.

[hunkyfunky2]

1 hour ago, idibezwada said:

there is very less probability that you can buy a $60 call for $60 when the stock is trading at $120

You can , check apple option chain...

I see it for 63 today, but it was 60 yesterday

[hunkyfunky2]

47 minutes ago, TheRealBulBul said:

Really..  I do not know this.. have to research on this

Yep, ITM option is like stock..

My friend has 5$ 2022 NIO call he bought in april '2020. He is minting money in selling calls as unlike AAPL , NIO premiums are high. Only once it came close to losing them but otherwise it's his weekly income for last one year. 

[kran]

1 hour ago, TheRealBulBul said:

You should compare with buying 100 stocks... with 50 stocks your profit is 3k and loss is 3k whereas with options it’s +_ 6k

 

1 hour ago, TheRealBulBul said:

Options: 1 call 100 stocks.. 6k investment 

if stock goes to 150.. my profit will be 3k on 6k investment 

if stock stays at 120.. no loss no gain 

if stock goes to 60.. loss is 6k on 6k investment 

if stock goes to 30.. loss is still 6k on 6k investment 

Stovks: 100 stocks.. 12k investment 

if stock goes to 150.. my profit will be 3k on 12k investment 

if stock stays at 120.. no loss no gain 

if stock goes to 60.. loss is 6k on 12k investment 

 if stock goes to 30.. loss is still 9k on  12k investment..

👆 that’s why I feel options are safe bet than stocks.. less risk and same gains as stocks with less investment..

 

I understand the dividend part but that’s small and there are lot of stocks that don’t pay dividend..

covered calls I get it.. but there is a risk there too if stock shoots up and it gets triggered, we miss the ride.. 

 

 

If you have 12,000 for investment, and you buy only 1 call for $6000, and keep the remaining $6000 safe, then Options are safer than stocks.

But duradha ekkuva ayyi, $6000 oorike account lo unnayi ani inkoka call konnav anuko, then you may lose the entire $12000 or make $12000 in profits.

It is upto you ... whether you want to compare

1. ($6000 worth call) vs ($6000 worth stocks). or

2. ($6000 worth call + $6000 safe cash) vs ($12000 worth stocks)

 

[kran]

30 minutes ago, hunkyfunky2 said:

You can , check apple option chain...

I see it for 63 today, but it was 60 yesterday

Bid/Ask spread ekkuva untundhi for deep ITM calls ki. Sometimes the Sellers dont update the Options price even if the stock price changes. So, $2-$3 difference untundhi, but a couple of hours lo price adjust aipothundhi.

[hunkyfunky2]

2 hours ago, kran said:

Bid/Ask spread ekkuva untundhi for deep ITM calls ki. Sometimes the Sellers dont update the Options price even if the stock price changes. So, $2-$3 difference untundhi, but a couple of hours lo price adjust aipothundhi.

Okay, good to know. Usually if the spread is more then it means volumes are also low