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VisualMod t1_j29hzdi wrote

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Total Submissions 1 First Seen In WSB 11 months ago
Total Comments 482 Previous Best DD
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VisualMod t1_j29i01i wrote

As you can see, option trading has surged in recent years, with the total volume of contracts traded rising by 5% last year. This growth is likely to continue in the coming years as more and more investors seek to profit from the volatile markets.

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12

Ok_Significance_4008 OP t1_j29jiso wrote

Source - US Stock Options Smash Record, Surpassing 10 Billion Contracts (msn.com)

WSB has impact on global stock options trading market:

" The outsize increases of 2021 and 2020 are attributed to small-fry retail traders whose interest in tech shares and so-called meme stocks such as GameStop Corp. sparked huge demand for leveraged investments such as options and other derivatives. But during a year of steep equity losses, many of those participants were likely put to flight. "

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LizHurleyFan t1_j29mip1 wrote

Fast way to lose money and bring down inflation

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mpoozd t1_j29n034 wrote

$4 trillion worth of options expire on every OPEX fucking insane

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pharmboy008 t1_j29nstd wrote

It was me that pushed it over the edge. You’re welcome

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Rim_World t1_j29rkai wrote

Dark pools are thanking all of you degenerates

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Derpazoid69 t1_j2a5rcr wrote

This is why I don't screw with options, I only buy shares. For every gain porn post where someone posts a few hundred thousand $ options gain, there's 45 loss porn posts about people blowing up their account from $50-$100k to $250 using options. Why take the risk of being wrong? To make money with a call you have to be right about the upward direction of the share price AND the time frame, if you're wrong your calls expire worthless. If you had just bought the shares and you're wrong and the share price doesn't increase you still have the shares and the majority of the time they still have value. You can just hold them until they increase in value. I'm down 32% right now just holding shares of various companies if I had used options I'd probably be down 90%+. But I can hold until the next bull market and my companies increase in value. Holding shares extremely rarely results in your investment account going from $100k to $0.

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slayer1am t1_j2ahfsb wrote

Replying to Derpazoid69 (#1,192,349)

You've left out the safest method of trading options: selling them.

You sell a put, and you get paid no matter if it goes up or down or sideways. The only difference is whether you have to buy the shares or not, and even if you do, it will be shares you wanted anyway.

Let's say your put expires in the money, and you buy the shares. Now you sell a call option out the money, and get paid to hold the shares. If the price goes up, you sell the shares above your cost, if it goes down, you keep the premium.

Come over to /r/thetagang and learn the better way to play options.

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vengeful_toaster t1_j2ahiho wrote

Replying to Derpazoid69 (#1,192,349)

Options can be less risky than buying shares.

If I sell a put at 10 dollars and the stock drops from 12 to 9 dollars, then I've acquired the stock at a cost basis of less than if I bought the stock outright at 12 dollars.

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xeio87 t1_j2ak2qc wrote

So options trading grew less than inflation?

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mind-trainer t1_j2al3tf wrote

I see so many home down payments, college funds, 2nd mortgages, margin calls, foreclosures…

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baconography t1_j2alwzz wrote

I think it's no longer a secret that the derivatives now steer the underlying.

On top of that, max pain has been quite accurate since Cboe rolled out the new 0dtes as well.

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MikoPaws t1_j2ao0yf wrote

Replying to Derpazoid69 (#1,192,349)

I mean, depends on how you do it. If ya had $10,000 and wanted to buy MCHI, you could buy like 200 shares for about that much.

Alternatively, you could put about $1,400 into 2x 1-year call options ATM and control the same movement of 200 shares. If you're expecting something to rise but you're also nervous it could crash, this strategy allows you to pay an insurance fee so that you don't risk the same amount of capital.

The problem is that, because the call options are $700, WSB doesn't like to just buy 2 and call it a day. They go all in, and buy 15 of em, or heck maybe even realize they can get it cheaper and get 500 of them OTM epiring in a day and blow up their account to theta decay faster than they can give a handjob behind a Wendy's dumpster. To each their own

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97soryva t1_j2aok4n wrote

On net, options are just stimmy checks being redistributed to hedge funds lmao

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cookingboy t1_j2at6wr wrote

Replying to [deleted] (#1,195,545)

> More millionaires have been created in the past few months than ever before in history.

Yeah my dude I’m gonna need some actual data beyond “trust me bro I am seeing a ton of internet posts”.

But again, this is WSB so maybe that’s how you do DD for your stocks 🤣😂

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bagacrap t1_j2atjdd wrote

Replying to [deleted] (#1,195,545)

pretty sure there are more new millionaires every day during a bull market, when portfolios tick over from $998K to $1M on a random day while said owner is out to lunch. But they don't go making egoposts about it.

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bagacrap t1_j2atns3 wrote

Replying to ShankThatSnitch (#1,192,267)

def. not healthy for the regards losing their life savings, but I do think it helps smooth out the market's movements a bit. The last 2 weeks have been pan flat because too many people are buying puts.

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EvaUnit343 t1_j2atvy5 wrote

It’s me. Hi. I’m the problem it’s me.

2

Bin_Jin t1_j2ayd8a wrote

I think the 🦍s deserve some credit for this.

3

SuperBottit t1_j2b38w4 wrote

This shows you the amount of fucking degenerate regards out there

4

SuperBottit t1_j2b3oo8 wrote

Replying to MissingFucks (#1,197,538)

It's the same theoretically. The money just shifts from losers' pockets into the winners'

Many options can be closed out on both sides of the ledger so there's never actually anything to exercise. Contracts that are open and in the money almost always get exercised.

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YoloAlgo t1_j2b5dni wrote

Replying to Puzzleheaded-Ad4229 (#1,200,721)

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

−5

YoloAlgo t1_j2b6f17 wrote

Replying to Puzzleheaded-Ad4229 (#1,201,156)

WHATS FUNNY? WHAT THE FUCK ARE YOU LAUGHING ABOUT. YOU LITTLE FUCK. YOU THUINK YOU CAN FUCKING LAUGH ME. EAT MY BAGS YOU SHITLORD AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH

−5

jimmiew t1_j2b8xr1 wrote

Replying to MikoPaws (#1,196,742)

This. I can’t even afford 100 shares of SPY buy I can risk $200-$300 for an SPXL option and get massive exposure to the same market. It’s a built in stop loss

1

YoloAlgo t1_j2bf7d3 wrote

Replying to Stormedgiant (#1,202,544)

HAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAAHAHAHAHAHAAHAHAA

−49

StackOwOFlow t1_j2bn487 wrote

this here shows how degenerate gamblers are doing everyone a service by helping the Fed pay down inflation

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32no t1_j2bqqeu wrote

TSLA is the single stock with the most traded options

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lispyfriend t1_j2br0lx wrote

Replying to 97soryva (#1,202,391)

Interesting. That intuitively makes sense to me for commodities. The option is purchased to reduce volatility even though it costs a little more (basically an insurance product). So in aggregate the insurers win for taking on the risk.

I guess I'm just surprised that's the case with stock.

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WroughtenPS2 t1_j2bylsy wrote

As you can see, WSB started blowing up in 2020.

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Idbuytht4adollar t1_j2c1zfn wrote

Replying to lispyfriend (#1,201,419)

No because that's priced into to the option. Your logic works with a lottery ticket as well or a low probability sports bet. Even if the upside potential is huge the odds would still be in mm side in the long run their side will profit

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lispyfriend t1_j2c52be wrote

Replying to Idbuytht4adollar (#1,209,593)

Understood. I just wonder if that pricing accurately measures probability of these events. Of course the market encouraged it to, but people also still measure stock risk as standard deviation of price, so idk.

0

[deleted] t1_j2cvbxb wrote

keeping the casino alive all in 🎰

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brucekeller t1_j2cwfob wrote

A huge chunk of that had to have been because of RH and then stim checks for kids with dreams of financial independence and that didn't have to pay rent.

At least back in the day, you had to lie about your financial qualifications and experience and I think some places even required a min balance to get L2 options. RH would just give it to you if you applied, basically, and without commission so a bunch of .01 bets were 'more doable'.

1

Few_Abrocoma1475 t1_j2d9g30 wrote

People ran out of cash to buy the dip so sold stocks to buy more calls instead

1

ShankThatSnitch t1_j2drsgv wrote

Replying to [deleted] (#1,221,481)

Mainly what it does is make the market more volatile, and it is a big factor in how you have to trade. The market can move in the opposite directions it otherwise would, simply because of the options put/call ratios and expirations.

And counter intuitive to the above point, it stop thr market from rocketing or plunging. Because people pile into options in the direction the market is moving, and the more option pile on, the bigger and harder the reversal ends up being.

So it helps to analyze how many options are at what strike and expiry, to know when to make trades.

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NotMimir t1_j2dz8av wrote

Machine trading volume turned way up

1

Wurst85 t1_j2e1h4x wrote

Spoiler: 2023 won't break that record. ATH will last for a couple of years.

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lispyfriend t1_j2e5xcu wrote

Replying to [deleted] (#1,221,088)

> Supposed to.

Well stddev is nice for their mathematical model. The critique is that the model is not really measuring risk in the business. It sounds more plausible for options though.

1