Let me make sure I understand. There is a point at which options get more valuable if price gets there on or before expiration, yes? So if MNMD gets only to $3.00 you would make money with shares but if it's not there quick enough and doesn't get to $3 until the ending day of the option then you lose money. Yet there is a section at which options will be worth more no matter what yeah?
Man you're saying buy $500 worth and then sell as many calls as I can and then buy more shares with the profits? So I'd have 446 shares for $500, then I'd sell 4 calls ($224) then I'd buy another 200 shares? Yet my original 400 would be limited to $2.50 maximum price, but the other 200 would be fine because they're not bound by exercising? Or are you saying buy 446, sell 4 calls, buy 200 shares, sell 2 more calls, buy 100 more shares, sell 1 more call? That sounds awesome. But if price goes far I'd be limiting my gains AND if price gains I'm basically stuck with these shares for 2 years.
Not sure I am following... Are you referring to hedging gamma intraday vs riding a stock (option) up 3 percent per day??
It's all about ROI (return on investment). You stand a much better chance of profit, by buying as many shares with your $500 after selling calls. You drop your net purchase price to $0.56 a share. If it goes to $2.50 you've made $1750 or so in profit. If you decide to buy $2.50 calls you'll need stock to appreciate to the high $4's just to get a similar return. Which sounds riskier to you? On another note, if you sell the calls at $0.56 and they expire worthless, you've also reduced cost of shares down to $0.56. Now you have a lifetime option on these same shares. PS, I own a few 1000's shares of MNMD. It's a lottery like weed stocks such as ACB. It might shoot up upon regulation, but the long term looks weak and more likely to fail than succeed. Treat it like a pharmaceutical, prepare to lose more often. keep it a small % of your portfolio.
If i read you correctly,you are reccomending selling the MNMD 1/24 2.50 put and getting a bit larger ?? I wouldnt cap the upside on that PIG,but if i did,I think the 2.5 are the wrong strike to sell..Stock has nade several 100% to 500% moves..Why cap it "so tight" Ild sell the 7.5 strike at .25.....
When is buying calls better than buying shares? -When you are absolutely certain that a HUGE uptrend move is going to happen by a specific time that no one knows or only very few people know about