costs while income is not increasing at the same rate of change. It's interesting to
note that as they inflate everything through Fed and Treasury Policy do you notice
they never did provide for a $15.00 minimum wage even knowing the low end workers
buying power going further and further in the toilet. Let me make a prediction, Biden
will wait until the $15.00 an hour minimum wage is equal to the previous $8.50 per
hour minimum was due to inflation. Then he will increase the minimum wage to $15.00
as the dollar has dipped so low in value that it equals the original minimum wage of $8.50 before the Fed induced Inflation of $8.50! Talk about hysterical bs! I'm still under the opinion that as this progresses, people will be forced to pull back on buying stuff more so than not.
If you have only so much income and the prices surges, there's only two things you can
do. Make more money by working two jobs or through investments and/or cut back
your purchases to budget for the higher costs. This is a drag on the economy as
well when people start cutting back spending at least in terms of the bottom lines
of the corporations out there.
Then you have the macro head winds of supply chain disruptions, The Russians and China
attempting to decouple from the dollar which in effect is an act of war whether declared
or undeclared. I loved the Bloomberg Special yesterday about metal commodities such
as copper etc. In this special, they have a Bloomberg analyst saying yeah the price of copper
will go over $10,000 a ton and "China" has a large supply in waiting? Let me ask any Ameircan,
why would you even buy their dam copper, if they already are at war with the US in terms
of the dollar, militarily, etc.? Domestic mines and production or other sources outside of
China and Russia and don't buy their sh__ or bring their sh__ into the US to sell. Tell them
to keep their sh__ and we'll make our own. And don't just tell the Chinese, tell the international
corporations, you produce inside the US your items you sell, or sell it some where else!
We don't start moving this way, our Economic, Political and Military Position will be so
devolved that US Citizens won't even know what happened later.
The republicans won't let minimum wage goes up to $15 because increase in labor cost will hurt businesses. They are pro business and will do what they can to support businesses. Even as the supply of money goes up, the income for the bottom stays the same. Is this a pay decrease resulting in decrease in labor cost thus supporting businesses?
We will buy copper from China because Chinese copper is cheaper than American copper. If businesses make products in USA, then the Americans can't afford to buy those products. So in order for businesses to stay competitive, they must produce in China and then sell to the Americans.
I'm glad I sold a couple of XLF options yesterday. I had that feeling it was going to drop today. You know, they're playing that daily up, down, up, down game. I need to keep following those impulses for they are always right. I also sold a positive SLV call also and good thing....SLV dropped today. lol
Oops, Spekul8 is right....if the PRICE of the option drops to zero it is zero, it can't go lower. I was thinking along the lines of P/L (Profit/Loss). The PRICE of an option can't go below zero, but your P/L can.
Forgive me for having P/L on the brain. Hahahahahhahaaaa!
I have a bunch of Calls in the negative right now so to answer your question....yes, options can go negative.
If a Call goes to -100% it just means you are down 100% of your money, which is essentially "zero" for all intents and purposes. If it goes down -50% it means you are down half of your premium. Can it go down to -101% or more? I don't know. The lowest my options have ever gone is -99%.
As long as the option has not hit expiration it is still alive regardless of how much you are down.
Thanks for the info. If it is negative at the expiration date would it just be dead in the water at that point and automatically closed out at a big loss, or could I actually owe more money to cover any negative?
If the option were -8,000,000 and the expiration date hits, then the option will expire worthless. You will not owe any money.
That's the beauty of options.....you know for an absolute FACT your max loss when you enter the trade. If I buy a option for 0.30 cents (costs me $30 bucks) the most I can possibly lose is $30.00 regardless of the P/L on that option at expiration.
I usually never let my options expire.
To defeat Theta I buy options farther out in time. If I plan on staying in for up to 30 days I buy a 6 month expiry option at least. These days I'm buying options 240-600 days out. That's because I have no idea when it will go up so I put a lot of time on it to make sure I'm not hurt by time decay.
I make sure I check the "Theta" on the option to make sure I'm not getting hit -0.14per day Theta or some craziness also.
Thanks for DASH, great find !!
You're the bomb GM! Thank you.
Thanks Greg , maybe post a bit more here , on your site it is difficult to find your posts
Everything in the world of investments and materials is inversely effected
by any increase in another. Oil goes up and up equals more transportation energy
costs, higher food costs, higher aluminum costs, higher widget costs, higher home
costs while income is not increasing at the same rate of change. It's interesting to
note that as they inflate everything through Fed and Treasury Policy do you notice
they never did provide for a $15.00 minimum wage even knowing the low end workers
buying power going further and further in the toilet. Let me make a prediction, Biden
will wait until the $15.00 an hour minimum wage is equal to the previous $8.50 per
hour minimum was due to inflation. Then he will increase the minimum wage to $15.00
as the dollar has dipped so low in value that it equals the original minimum wage of $8.50 before the Fed induced Inflation of $8.50! Talk about hysterical bs! I'm still under the opinion that as this progresses, people will be forced to pull back on buying stuff more so than not.
If you have only so much income and the prices surges, there's only two things you can
do. Make more money by working two jobs or through investments and/or cut back
your purchases to budget for the higher costs. This is a drag on the economy as
well when people start cutting back spending at least in terms of the bottom lines
of the corporations out there.
Then you have the macro head winds of supply chain disruptions, The Russians and China
attempting to decouple from the dollar which in effect is an act of war whether declared
or undeclared. I loved the Bloomberg Special yesterday about metal commodities such
as copper etc. In this special, they have a Bloomberg analyst saying yeah the price of copper
will go over $10,000 a ton and "China" has a large supply in waiting? Let me ask any Ameircan,
why would you even buy their dam copper, if they already are at war with the US in terms
of the dollar, militarily, etc.? Domestic mines and production or other sources outside of
China and Russia and don't buy their sh__ or bring their sh__ into the US to sell. Tell them
to keep their sh__ and we'll make our own. And don't just tell the Chinese, tell the international
corporations, you produce inside the US your items you sell, or sell it some where else!
We don't start moving this way, our Economic, Political and Military Position will be so
devolved that US Citizens won't even know what happened later.
The republicans won't let minimum wage goes up to $15 because increase in labor cost will hurt businesses. They are pro business and will do what they can to support businesses. Even as the supply of money goes up, the income for the bottom stays the same. Is this a pay decrease resulting in decrease in labor cost thus supporting businesses?
We will buy copper from China because Chinese copper is cheaper than American copper. If businesses make products in USA, then the Americans can't afford to buy those products. So in order for businesses to stay competitive, they must produce in China and then sell to the Americans.
I'm glad I sold a couple of XLF options yesterday. I had that feeling it was going to drop today. You know, they're playing that daily up, down, up, down game. I need to keep following those impulses for they are always right. I also sold a positive SLV call also and good thing....SLV dropped today. lol
serious question, can a call go negative or just to zero value? (e.g. baba)
No, it can't. Once its drops to zero they are worthless.
got it, thanks guys
Oops, Spekul8 is right....if the PRICE of the option drops to zero it is zero, it can't go lower. I was thinking along the lines of P/L (Profit/Loss). The PRICE of an option can't go below zero, but your P/L can.
Forgive me for having P/L on the brain. Hahahahahhahaaaa!
Thanks for clearing that up...I was thinking P/L and not the price of the option. My bust.
I have a bunch of Calls in the negative right now so to answer your question....yes, options can go negative.
If a Call goes to -100% it just means you are down 100% of your money, which is essentially "zero" for all intents and purposes. If it goes down -50% it means you are down half of your premium. Can it go down to -101% or more? I don't know. The lowest my options have ever gone is -99%.
As long as the option has not hit expiration it is still alive regardless of how much you are down.
Thanks for the info. If it is negative at the expiration date would it just be dead in the water at that point and automatically closed out at a big loss, or could I actually owe more money to cover any negative?
If the option were -8,000,000 and the expiration date hits, then the option will expire worthless. You will not owe any money.
That's the beauty of options.....you know for an absolute FACT your max loss when you enter the trade. If I buy a option for 0.30 cents (costs me $30 bucks) the most I can possibly lose is $30.00 regardless of the P/L on that option at expiration.
I usually never let my options expire.
To defeat Theta I buy options farther out in time. If I plan on staying in for up to 30 days I buy a 6 month expiry option at least. These days I'm buying options 240-600 days out. That's because I have no idea when it will go up so I put a lot of time on it to make sure I'm not hurt by time decay.
I make sure I check the "Theta" on the option to make sure I'm not getting hit -0.14per day Theta or some craziness also.
Here's a great book on options:
https://www.amazon.com/All-About-Options-3E-Started/dp/0071484795/ref=sr_1_3?dchild=1&keywords=all+about+options&qid=1619816003&sr=8-3
You know for an absolute fact the max loss on Long Call and Long Put options I meant. I gotta be specific here.