GOOGL - Bought 2 April10 557.50 Calls at $0.50

OTM-Options said:
The probability goes from 16-18% all the way down to 1%-2% after 19 minutes of time decay and a $1.13 drop on a $500+ stock? That's why I'm very skeptical about the usefulness of the option greeks.

:)
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The change in probability was due to the move from $545.99 (when you bought the option) to the close of $537.02. Time decay/Theta does not exist. It is a derivative of price that expresses the decline in probabilities/optionality over time.
 
xandman said:
The change in probability was due to the move from $545.99 (when you bought the option) to the close of $537.02. Time decay/Theta does not exist. It is a derivative of price that expresses the decline in probabilities/optionality over time.
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Oh I see why the probability went from 16-18% all the way down to 1%-2%, you inputted the wrong closing price. GOOGL did not close at $537.02, it closed at $544.86 - that's a big $7.84 (1.4%) error.

I bought when GOOGL was at $545.99 and within 19 minutes it dropped to a low of $543.58 then closed at $544.86 - only a $2.41 range.


:)
 
see, wtf am I missing here - because if I look on Google finance I show the $537.xx close; yet my chart shows $544.80 (last bid). That's why I wrote my original close of being less than $551.86, so call it below $552.

Whatever, either way you will lose if expecting a close ITM at expiration.
 
My apologies. I was quoting from GOOG the C shares. You were doing GOOGL the A shares.

Probabilities are a better 6-8%. Price action looks promising. It could happen. Looks like you picked it up as people were selling into your bid.

Essentially, you picked up a nickel option (compared to sub-100 stocks, a relative impossibility in retail) with 8.5 delta. Good Luck.
 
GOOGL_Gamma.png

I'd like to see more of these picks. OTM just might be a gamma buying savant. That's a 20 lot for illustration.

The gamma explosion from this trade peaks at where I would make a technical exit or expect assignment.
 
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OTM-Options said:
GOOGL - Bought 2 April10 557.50 Calls at $0.50

Thought I would share this trade with you guys. I expect GOOGL to have a pre-earnings rally this week so I bought some OTM calls, the order was filled at 15:41:01 EST today.

  • GOOGL at $545.99.
  • Bought 2 April10 557.50 Calls at $0.50.
  • 3 Days to expiration.


:)
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Out of interest, how much was the commission on those 2 calls?
 
OTM-Options said:

  • GOOGL at $545.99.
  • Bought 2 April10 557.50 Calls at $0.50.
  • 3 Days to expiration.
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  • GOOGL at $548.84.
  • April10 557.50 Calls at $0.40 (bid).
  • 2 days to expiration.
  • Trade still open. I have submitted a Limit Order to sell at $2.50, good until April 10 Friday.


:)
 
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