Discussion in 'Options' started by harrybachs, Nov 14, 2006.
Next stop for AAPL $100. Who's in?
about a month ago. Of course it was a mistake but I still made some money on it.
got rid of my calls bot at close day after report no long ago. had to get out cuz of vola collapsin' and exp too near [nov]. on insight should have bot the dec calls but heck i thot that it would run up immediately as it did for 10 consecutive qts after blow out earnings. made a quick buck but look where this sob is now.
Apple up another $1.56 today. This one can't be stopped.
I got in at $75....
So my frist two options purchases were apple calls last week. Basically I'm starting small cause I'm trying to learn.
Here's the way I understand it.
Purchased one dec 16 strike 85 contract for 2.6, so my break even point is 87.6
Purchased one jan 20 strike 85 for 5.05, so my break even point is 90.5.
Here's where I get confused: My acount shows the options are trading at a higher price now, and I have a gain of like 18 and 24 percent.
If I sell these am I making profit? Cause I thought I had to hit those break even points before I made any profits.
Anyway, I'm sure this is a real begginer silly question but any help would be appreciated, thanks!
Those are your breakeven points AT EXPIRATION. An option is like a stock, if you buy it for $2.00 and it goes up to $4.00 you made $2.00 in profit and you can sell the option for a profit. Think of it that way that the price moves around and you need the price to move higher from where you bought if you own a long call.
The breakeven is only if you held all the way to expiration and all time value premium is gone.
It is a little scary that you put money into something and do not even know if you are making any money or not. Please take the time to learn the basics before putting any money on the line
Separate names with a comma.