Beginner Options question

[bogdanm]

Hello All,

I need to ask a question. On blue chips companies listed on NASDAQ on companies that are worth billions. How much money can you invest in options? I head millions but how many?
1 million, 10 million, 100 million? Can you put 100 million on Calls on Amazon or Apple, Alphabet, Facebook?
Thanks,

I`m trying to grasp the size of the markets. Or if you put such large orders say 1 million on a company that is worth 1 billion will you be like 90% of the whole options market?

 

[qwerty11]

If you buy all call options on (for instance) GOOG until you reach the position limit you need more money than the US GDP...

 

[qwerty11]

There are 2100 calls on GOOG at average price $600. You may buy 25 million of each. So that's $31,500,000,000,000 or $31.5T in total. US GDP is $21T.

That's excluding the puts and GOOGL...

 

[ironchef]

Hello All,

I need to ask a question. On blue chips companies listed on NASDAQ on companies that are worth billions. How much money can you invest in options? I head millions but how many?
1 million, 10 million, 100 million? Can you put 100 million on Calls on Amazon or Apple, Alphabet, Facebook?
Thanks,

I`m trying to grasp the size of the markets. Or if you put such large orders say 1 million on a company that is worth 1 billion will you be like 90% of the whole options market?

Options are derivatives and as long as there are demands, market makers can create as many as there are buyers and sellers.

Someone correct me if I am wrong. I am just an amateur retail thinking out loud.

 

[ajacobson]

There are position limits for all equity names and the apply to any investor or group acting in concert. There are hedge exemptions which generally double the limit. Index options and spy options are treated differently.

https://www.theocc.com/webapps/position-limits

 

[bogdanm]

There are 2100 calls on GOOG at average price $600. You may buy 25 million of each. So that's $31,500,000,000,000 or $31.5T in total. US GDP is $21T.

That's excluding the puts and GOOGL...

I`m sorry not to show I follow 2100 calls at 600$ is 1.2 million. What do you mean by buying 2100 and 25 million of each? I`m new here and I don`t understand. I know you buy calls if it goes up and put`s if you think it will go down. Call`s can be an unlimited disaster which can bankrupt you if your terrorist attack on the jumbo jet to be unveiled at Miami Dade airport fails(Bond reference ))). And that is about it.

 

[never2old]

OP, see if this helps

look at the open interest & daily volume option trades, compare GOOG, AAPL, AMZN

GOOG for example has only 149,806 open contracts

https://marketchameleon.com/Overview/GOOG/OpenInterestTrends/

whereas QQQ has 6,903,180

https://marketchameleon.com/Overview/QQQ/OpenInterestTrends/