GOOGL - Bought 2 April10 557.50 Calls at $0.50

Discussion in 'Options' started by OTM-Options, Apr 7, 2015.

  1. xandman

    xandman

    The change in probability was due to the move from $545.99 (when you bought the option) to the close of $537.02. Time decay/Theta does not exist. It is a derivative of price that expresses the decline in probabilities/optionality over time.
     
    #11     Apr 7, 2015


  2. Oh I see why the probability went from 16-18% all the way down to 1%-2%, you inputted the wrong closing price. GOOGL did not close at $537.02, it closed at $544.86 - that's a big $7.84 (1.4%) error.

    I bought when GOOGL was at $545.99 and within 19 minutes it dropped to a low of $543.58 then closed at $544.86 - only a $2.41 range.


    :)
     
    #12     Apr 7, 2015
  3. see, wtf am I missing here - because if I look on Google finance I show the $537.xx close; yet my chart shows $544.80 (last bid). That's why I wrote my original close of being less than $551.86, so call it below $552.

    Whatever, either way you will lose if expecting a close ITM at expiration.
     
    #13     Apr 7, 2015
  4. xandman

    xandman

    My apologies. I was quoting from GOOG the C shares. You were doing GOOGL the A shares.

    Probabilities are a better 6-8%. Price action looks promising. It could happen. Looks like you picked it up as people were selling into your bid.

    Essentially, you picked up a nickel option (compared to sub-100 stocks, a relative impossibility in retail) with 8.5 delta. Good Luck.
     
    #14     Apr 7, 2015
    lucysparabola likes this.
  5. xandman

    xandman

    GOOGL_Gamma.png

    I'd like to see more of these picks. OTM just might be a gamma buying savant. That's a 20 lot for illustration.

    The gamma explosion from this trade peaks at where I would make a technical exit or expect assignment.
     
    Last edited: Apr 7, 2015
    #15     Apr 7, 2015
  6. update this thread again after April 10 -- good or bad...so we can see the results (and learn).
    May the farce be with you :confused:
     
    #16     Apr 8, 2015
  7. Visaria

    Visaria

    Out of interest, how much was the commission on those 2 calls?
     
    #17     Apr 8, 2015

  8. $12.45

    • I'm with BMO Investorline.
    • $9.95 plus $1.25 per contract.
    • Max $35.00 if order under $2,000.


    :)
     
    #18     Apr 8, 2015


    • GOOGL at $548.84.
    • April10 557.50 Calls at $0.40 (bid).
    • 2 days to expiration.
    • Trade still open. I have submitted a Limit Order to sell at $2.50, good until April 10 Friday.


    :)
     
    #19     Apr 8, 2015
  9. oopsie!
     
    #20     Apr 9, 2015