can someone explain this for me ?

[SunTrader]

this didn’t answer his question.

In a name like Tesla, the put price will follow tick for tick with respect to the various risk factors.

So if price went up 84 ticks then dropped 230 ticks, put will also move exactly 84 ticks and 230? And every other move every time ... tick for tick.

I must be watching the wrong symbol.

Or like I said it, don't expect it to move tick for tick - as in sometimes it does, sometimes it doesn't.

 

[schizo]

I shorted tesla on my paper trading account around 244.60 ish. i placed 1 put option at 245. however tesla moved against me and started to go back up to 245 and my put option actually gained in profits . I thought if you placed a put option at 244.60 and if it started to climb back up to 245 shouldn’t you be losing money ? Thank you

Dude, when you short a put, that's the same thing as buying a call. So it only makes sense you made money as the stock went up.

 

[hilmy83]

I shorted tesla on my paper trading account around 244.60 ish. i placed 1 put option at 245. however tesla moved against me and started to go back up to 245 and my put option actually gained in profits . I thought if you placed a put option at 244.60 and if it started to climb back up to 245 shouldn’t you be losing money ? Thank you

"Placed a put"..bro you're making us noobs look really damn bad.

 

[newwurldmn]

So if price went up 84 ticks then dropped 230 ticks, put will also move exactly 84 ticks and 230? And every other move every time ... tick for tick.

I must be watching the wrong symbol.

Or like I said it, don't expect it to move tick for tick - as in sometimes it does, sometimes it doesn't.

he's saying the price of the put went up when the stock went up.

in your example, it would be reasonable to expect the put to go down 42 ticks and then go up 115 ticks. and deviation would be gamma (not enough vol for that) or vega (which could be anything). But your comment wasn't helpful. You could have easily just said, "the sky is blue"

 

[SunTrader]

he's saying the price of the put went up when the stock went up.

in your example, it would be reasonable to expect the put to go down 42 ticks and then go up 115 ticks. and deviation would be gamma (not enough vol for that) or vega (which could be anything). But your comment wasn't helpful. You could have easily just said, "the sky is blue"

He didn't say until later he SOLD the put.

Second guess what I was saying all you want. Never stopped you in the past.

 

[newwurldmn]

He didn't say until later he SOLD the put.

Second guess what I was saying all you want. Never stopped you in the past.

buy or sell is irrelevant to your post as your post just said it’s not correlated.

 

[SunTrader]

buy or sell is irrelevant to your post as your post just said it’s not correlated.

MSU much.

 

[TheDawn]

I shorted tesla on my paper trading account around 244.60 ish. i placed 1 put option at 245. however tesla moved against me and started to go back up to 245 and my put option actually gained in profits . I thought if you placed a put option at 244.60 and if it started to climb back up to 245 shouldn’t you be losing money ? Thank you

You actually sold a put option as the quantity in position is -1. When you sell a put option, it's the opposite of buying a put option. When you buy a put option, when the underlying loses value, your put option gains value but when you sell a put option, you make money when the underlying is going up; it's the put option buyers who would lose money because they've bought the put to protect the value of the underlying but the underlying is actually gaining in value so the put they bought is useless.

The put option is like insurance on the value of the underlying. When you sold the put, you are the insurance company that sold the insurance on the underlying's value. When the thing that you bought the insurance on turns out to be ok, who do you think would make money?

https://www.investopedia.com/terms/p/putoption.asp

 

[cesfx]

I shorted tesla on my paper trading account around 244.60 ish. i placed 1 put option at 245. however tesla moved against me and started to go back up to 245 and my put option actually gained in profits . I thought if you placed a put option at 244.60 and if it started to climb back up to 245 shouldn’t you be losing money ? Thank you

By shorting the put, even your margin it's a lot higher than the cost of buying it. Your payoff clearly shows your exposition to the downside, and your limited profit on the upside.

Check the margin required and the payoff graph before execution.

Basic stuff, it's good that you are on paper.
A paper book might help too

 

[cesfx]

Dude, when you short a put, that's the same thing as buying a call. So it only makes sense you made money as the stock went up.

View attachment 329118

You mean the same as buying a Covered Call.