Market Value calculation of option

Ahh, I see that was Q4 deliveries. Either way the premium was likely priced much higher in expectation of the news so he was gambling on the delivery numbers.

hi, i only use paper account to learn how to execute/exercise options. So TSLA is just an example. Trying to understand how the market value is calculated (and P&L)
 
1 option = 100 shares

Premium of $31 has a multiplier of 100. So, that was a debit of $3100 to your account.

Now that the premium is $41. You have an unrealized gain of $4100-$3100= $1000. The commissions are trivial.
 
Listen to NW...Hes 101 percent right..You arent accounting for time value/extrinsic

the option has time value which represents the cost for having an asymmetric payout. you should study some basic options thery (even wikipedia will be good start).
 
Bro it was priced much higher in expectation of delivery numbers. He bought OTM 1150 weekly calls (approx $100 out from the underlying.) which cost him $3100 a contract. If you look at the 1280 calls currently right now (approx $100 out from the underlying) they're priced at only $800 a contract or less.

Bro, what are you talking about? The vol was 58 and it was carrying north of 60. No event was priced in.

stay in your lane bro and don’t be snide to newbies when you yourself don’t know what you are talking about.
 
1 option = 100 shares

Premium of $31 has a multiplier of 100. So, that was a debit of $3100 to your account.

Now that the premium is $41. You have an unrealized gain of $4100-$3100= $1000. The commissions are trivial.
1 option = 100 shares

Premium of $31 has a multiplier of 100. So, that was a debit of $3100 to your account.

Now that the premium is $41. You have an unrealized gain of $4100-$3100= $1000. The commissions are trivial.

ok then I see how the market value increases. I missed the 1:100. Thank you for clarifying this
 
Bro, what are you talking about? The vol was 58 and it was carrying north of 60. No event was priced in.

stay in your lane bro and don’t be snide to newbies when you yourself don’t know what you are talking about.
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So I just made an honest misassumption he bought them last week on Friday at $31 a contract. That would be the only reason I can think of as to why the $100 OTM weekly call would be so expensive.

In that case, you could've just simply corrected me that he was buying ITM/ATM calls today? Almost, feels like you were hiding the fact I was making an oversight just so you can get a chance to gloat on your superior knowledge. :rolleyes:
 
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So I just made an honest misassumption he bought them last week on Friday at $31 a contract. That would be the only reason I can think of as to why the $100 OTM weekly call would be so expensive.

In that case, you could've just simply corrected me that he was buying ITM/ATM calls today? Almost, feels like you were hiding the fact so you can get a chance to gloat on your superior knowledge. :rolleyes:

Why would i hide a fact in a post made by someone else?

It doesn't matter why or if the call was expensive. What mattered is that he didn't understand why he made money.

You weren't very nice to the OP while being off topic and wrong in your statements.
 
Why would i hide a fact in a post made by someone else?

It doesn't matter why or if the call was expensive. What mattered is that he didn't understand why he made money.

You weren't very nice to the OP while being off topic and wrong in your statements.

How was I not being very nice to OP? I was trying to offer constructive criticism but I was only offtopic since I made a little oversight into thinking he bought the calls last week.

Your trying to escalate a small matter into something gigantic.
 
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How was I not being very nice to OP? I was only wrong cause I made a little oversight that he bought the calls last week.

Your the one being snide and trying to escalate something small into gigantic.

you were denigrating his trade when his question had nothing to do with the rationale of the position and then you got virtually every aspect of the situation wrong: earnings, timing, and vol level.

You were trying to show off your smarts and you turn out to be the dumbest guy in the thread.
 
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