Quote:
Originally Posted by RubberSponge
Bought 12 calls on USO last Friday at .07. Opening bell today they jumped to .18. On a $72 dollar investment the return so far is 175%. Market value of $218.
USO 10.5 put's are basically kaput but no reason not to see it to the end. $70 investment has a market value of $15. Loss of market value, 81%. No reason not to ride it out.
BAC I won't get too specific but market value on initial investment has risen 201% in less than 10 days.
Options are so fun.
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Eh. I'm not a fan. I'm in the futures for hedging and so you buy puts when you are at a level that you think you can make money. So if it continues to go up there are no margin calls. GREAT!!!!
Then it rolls over. And you think to yourself, "I'm so damn smart I have this hedged and so all I have to worry about is the basis. So you sell the hedged bushels at harvest and all is well right? Well while the market was going down, the put was making about half the money that the bushel was losing. FUUUUCK
it's a good tool and it certainly is cheap to run. But the bottom line is that you have to be right on the direction of the move or you are giving it away anyway. And if you are going to be right you just as well own the contract.
That's how it works on the commodity side anyway.