Because you can sell a $690 call and get $2.50. People were paying north of $5. I don't think thats Robinhoods with $1400 checks in hand. 1.25% on calls that are 145% out of the money with 5 days of trading left? Uh-uh. This earnings report.... think about it.... NOTHING HAS CHANGED.... with regards to their business model as it stands now. People didn't start flocking in droves like some kind of Haj to a gaming Mecca because Mr Chewy joined the board. There is absolutely nothing different between this earnings report and their last 8. Nothing they can say regarding the metrics WS uses to evaluate every other company in the universe (except maybe tsla) on an earnings call.... doesn't matter. They can miss, they can beat, revenue can come in strong, it can come in weak.... won't matter, nothing can justify that IV. Look where its trading and think about it. Is there anything they can say that will make it drop? What they missed the numbers? That's laughable. Nobody cares about 'their numbers'. Of course they're gonna suck. Gimmee a break. There is either going to be the greatest volatility crush of all time, or something really big is getting ready to be announced. I'd take this thing long.
The $600 and $300 expired worthless yesterday. So nothing to close on those. I sold another weekly $300 calls yesterday. My goal is not to make money when the option expires OTM but to get assigned so I can stay short at GME at $300.
Not following you on that one. If it expires worthless it expires worthless. Nothing happens. You keep the premium. What gets assigned? If it goes to $600 you want to be $300/share underwater to save on shorting outright with a .25% borrow rate? I don't get this strategy. You know you can call your broker, reserve the shares, and then set a limit order to short if your goal here is to catch a spike.
The naked call I sold on Friday gets assigned and I'll be short GME at $300 if GME trades above $300 on 3/26. The calls I sold two weeks ago expired worthless yesterday and I got to keep the premium. The problem is it may never get to $300. But if I sell a $300 call, at least I get to keep the premium, if it doesn't go above $300 next Friday close. If it goes to $300 or $600, so be it as that is a risk I'm willing to take for the $12 premium I received for selling a call that is 50% OTM. My thinking being that any price above $300 is unsustainable in the long run and I get to keep premium and also be short if shares get called. I see my naked call as short GME limit $300 order with an expiration date of 3/26. The only risk I see is that GME can go $600 next week in theory. But since I don't believe that, I'm trying to profit by selling naked calls. Again, I'm only selling 3 calls, not over extending myself by selling 30 calls.
I totally understand what you're doing, I just question if that's the best way to do it. Answer me this... why are all the bids from $475 to $690 on the calls all in the neighborhood of $2.50+/-? Now think about this... who would sell a $475 call for $2.50..... when you can sell a $690 call for the exact same amount? I mean duh... that makes ZERO sense. Uh-uh.... This is out of my paygrade buddy, but something is not right here. Destriero is out backpacking somewhere... but I pm'd him the question. He'll know. Pull up any highly liquid instrument, take SPY for example.... and look at the bids the farther out of the money you go. They decrease linearly. Sometimes @Same Lazy Element checks in on Saturdays, maybe he'll shed some light. Its not really my my wheelhouse, so maybe I'm way off.... but who is buying 'all the calls one can sell' with a bid that's flat across $200 worth of strikes? On a $200 stock. Its either a huge scam.... or ya'll are gonna get f'd royally. Maybe I'm wrong. Where's Destriero? He'll know.
That is a good point. I didn't check the bid prices > $400 when I sold the calls. All I noticed was $400 premium was half that of $300.
You've gotta look a the ATM vol. Vol is still stupid, but it's a lot lower than when the shares were dot shotting over $400. IOW (closing) vols have dropped by half. Nobody is going to like this trade, but I don't recommend trading wings--limit it to the meat. Not a lot of strikes available in May, but I'd look at the 30/150/430 231P fly from 128 to the buy. I'd trade it small or go out on duration for more strike availability. May vols are 250-line.
And FWIW, I sold the vol-line over 400% during the first dot shot and covered vol in the 220s. Probably my best return on debit.
Help my ape brain here..... does this mean it's likely to go up or likely to go down? I don't know wtf all this options stuff is but from your incredulous tone it means something.