AAPL PUTS in the MONEY - NEED HELP

I

impulse07

Hi Guys,

I am new to options and I've done alot of futures and equity trading before.

Options is always intrigued me and would like to learn more.

Here is WHAT I need help with.

I bought 1 dec 2011 395 put at $15.95

Now it trading around $29

AAPL is at $392 - I am $3 in the money.

If i want to buy my put , will I just make money on the premium or premium and $3 x 100 shares ?

What will happen if AAPL falls to $380 and in the money $15 . I base my profits on the premium its trading or premium plus the difference.
 
If you bought the put which cost 15.95, and it is now trading at 29.00, you can sell now and pocket your profit of (29.00-15.95) 13.05. How far it is now the money right now isn't the critical issue at this point. The question is: do you want to take your profit now or hope for more?

On the other hand, you seem a little confused about what is going on to be actually trading options.
 
Your profits are only based on what prices you buy and sell the option. 1 option is based on 100 shares but you dont own both. You only get the shares if the option expires in the money.

Once you buy the 395 put it really does not much to you if its in or out of the money by a few dollars, if you were looking to buy it then it may matter more.

Most of your profit now is premium, if the price stays the same for the next 2 months your profit will slowly fade and you will lose money on your 15. cost. This about all I know about options, not much more. I am sure the experts here can pick my explanation apart .
 
Quote from impulse07:

I bought 1 dec 2011 395 put at $15.95

Now it trading around $29

AAPL is at $392 - I am $3 in the money.

What will happen if AAPL falls to $380 and in the money $15 . I base my profits on the premium its trading or premium plus the difference.
More...
The delta of that option should be pretty close to 1/2 so if AAPL drops quickly to 380, you should amke another $5-6 (assumes that IV remains the same).
 
Quote from abducens:
1 option is based on 100 shares but you dont own both.
You only get the shares if the option expires in the money.
More...

the op will own 100 Apples shares for a purchase price of $15.95 ?
 
Oki.. So I sold my dec put 395 at 34.50

made a profit of $1,890 minus fees.

Not bad first time trading options. Were I can learn more about options to cover less risk and make money everytime being on the right move..

Peter S.

I bought a NFLX nov $100
 
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