Maybe brokerages could start offering partial options contracts like they do partial shares, at least on stocks priced this high. I guess that would complicate things for exercising though.
Yeah I've been wondering about how to control position size on some of these too... I was asking around about the effects of having a strike price WAY OTM.... Of course I understand that there are some more complex options combinations that can help offset cost by selling a contract simultaneously etc... But thats a little above my pay grade too. Let me know how it goes for you.
Hi Joshua, I found the options alpha youtube channel greeks video very helpful in this regard. It's mostly about probabilities. Far OTM options have a much less likelhood of going ITM, so they're cheaper, but, if the trade moves away from you, they drop value a lot faster too. And the shorter the expiration is the more it seems to impact it. Then if volatility drops also it gets even worse. So basically, what I learned, is, if I can't afford the correct option - ATM with at least Jan exp date, I don't buy it.
Yea that all kinda makes sense... Hadnt thought about the vega like that though, that it could actually be profitable and not just like a tax. I'd just like to get to the point where I can imagine how a really low delta affects the outcome of the trade... However jan 2021 is a long time from now it could be a sweet position either way if you're willing to tie up some capital for awhile.. Lots to learn. Good luck, and thanks.
Ready to jump on Jan 21 call spread - much appreciated Greg!
The premium will be $28k for one contract, for a Jan2021 call option on Amazon!
Maybe brokerages could start offering partial options contracts like they do partial shares, at least on stocks priced this high. I guess that would complicate things for exercising though.
Yeah I've been wondering about how to control position size on some of these too... I was asking around about the effects of having a strike price WAY OTM.... Of course I understand that there are some more complex options combinations that can help offset cost by selling a contract simultaneously etc... But thats a little above my pay grade too. Let me know how it goes for you.
Hi Joshua, I found the options alpha youtube channel greeks video very helpful in this regard. It's mostly about probabilities. Far OTM options have a much less likelhood of going ITM, so they're cheaper, but, if the trade moves away from you, they drop value a lot faster too. And the shorter the expiration is the more it seems to impact it. Then if volatility drops also it gets even worse. So basically, what I learned, is, if I can't afford the correct option - ATM with at least Jan exp date, I don't buy it.
Yea that all kinda makes sense... Hadnt thought about the vega like that though, that it could actually be profitable and not just like a tax. I'd just like to get to the point where I can imagine how a really low delta affects the outcome of the trade... However jan 2021 is a long time from now it could be a sweet position either way if you're willing to tie up some capital for awhile.. Lots to learn. Good luck, and thanks.
Thank you Greg, hope your day is going well.
What if the future of Amazon's biggest revenue driver (buying Chinese products to sell on Amazon) is in jeopardy?
Retail remains Amazon's primary source of revenue, with online and physical stores accounting for the biggest share.
If we are moving our business practices towards nationalism then buying from China to sell on Amazon might be dead/dying.
I'm just repeated what someone else tweet, I wanted to get feedback on that.