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
MikoPaws t1_j2ao0yf wrote
Reply to comment by Derpazoid69 in US Stock Options Smash Record - The number of traded contracts surpassed the 10-billion mark in 2022 or the first time ever by Ok_Significance_4008
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