I have a 17.5 dollar put on carnival cruise lines On friday. Today carnival is down 10 percent and I am down 16 percent. Someone explain how a put loses money when the stock price decreases.
Losing money on puts when stock goes down
- Thread starter Jakelieberman90
- Start date
volatility.
You're asking someone to explain how options work. That's like someone who never made it past algebra asking someone to explain calculus in a couple paragraphs because they just put a bunch of their money on the line with something that required an understanding of calculus. You're in over your head on a subject that doesn't yield itself to a five minute education. Sell your positions, take some classes (there are some great free finance 101 MOOCs out there, as well as statistics if you don't already have that), then try again when you at a minimum have a basic understanding of wtf you're trading in.
Long puts are long vega. He's long theta so if theta is outpacing vega for some reason that could be it. He's short rho and the treasuries took a big cut. Gamma should be in his favor.
Hard to say. It's not vol though. Could be a lack of liquidity screwing up the bid/offer.
He may not be able to get out. Who's gonna take the other side in a freefall?
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What was the vol at when you bought?
The VIX is up around 50 now, and way too high to buy. Always buy low vol, sell high vol. Can't stress that enough.
You are the better man for taking all that time to answer! Re vol, my first thought without checking his underlying was the op bought when, say, vix was at 77 and then at time of post was at about 70. But, yeah, I guess not likely vol.
95% of those trading options, should not even be allowed to open bank accounts
Why do give a completely useless answer to the OP who knows nothing about options? You are trying to show expertise by throwing in a few greeks. Your comment is definitely in the running for one of the least useful answers of the year.
Speculation. OP gave very little information and I tried to help. Which is considerably more than you've done here.
I don't recall claiming expertise in options. Cool strawman though, jackass.