i m not so good with options but i know what a binary option is.
if u are right u get about 80-95% profit if you are wrong you lose everything
if u are right u get about 80-95% profit if you are wrong you lose everything
25x profit and 4% lose? what is this?
- Thread starter retardedtrade
- Start date
The big short movie made huge monies in the mortgage meltdown shorting mortgage backed securities using credit default swaps. They were options buyers paying the premium which is fixed in amount. They ended up making a bundle when the market collapsed. There are two kinds of options calls (you expect the stock to go up in price) and puts (you expect the stock to go down in price). A lot of times options expire worthless, because the stock does not move enough in the direction you want in addition to volatility which varies. When it does though, you can make a lot for a fixed amount of capital risked.
They bought CDS on I-A/Aaa credits. Thought to be immune to (triggering) default. Let us know when you get that ISDA.
They're called teenie's. Look as far out of the money as possible for an option with a .05 bid under it and sell a whole bunch of that crap. Better have a risk based margin account and pray to god your broker doesn't close your trade on a market selloff.
I think the OP is talking about when Jamie and Charlie bought the teenie's wait they sold options?
I thought they bought them. No way you would make 25x returns on selling short options, It's the other way around I think.
I thought they bought them. No way you would make 25x returns on selling short options, It's the other way around I think.