Viewing a single comment thread. View all comments

KoGamer01 t1_iwrkvlm wrote

Reply to comment by seejarrick1 in 🔥 with XOM puts. Cashed out and looking to get back in again 💁🏻‍♂️ by seejarrick1

You see, oil could go down in the short term and up in a longer timeframe. Buy shares to go long, sell OTM short dated calls to collect the most premium then use the premium to hedge your bet against your long by buying OTM long dated puts.

When oil goes down your shares price goes down you make money on selling the call and also make money on the long dated put.

Then when you think the price has gone down enough you sell the puts netting you a nice profit. Keep the entire premium of the calls you sold. And you can add more shares.

The risks include you have to sell your shares if the calls are exercised but since they’re OTM you still made money. The puts were bought with premium so it was never really your money you lost.

Also don’t come crying to me if you get fucked trading this as its NFA.

2

seejarrick1 OP t1_iwrmk0e wrote

Dude how do I pm you? Looking to learn more about OTM options.

3

KoGamer01 t1_iwrn7kr wrote

Just search oil options trading on YT. There are more vids on it there.

You got this, I belive in you young regard. Just know that 90% of retail traders lose money in the long run

1

seejarrick1 OP t1_iwrmdvd wrote

I would cry. A lot. Alone. On the floor. Tucked into a ball.

1