If you are buying a put, you look at the stock price in November.
If the price is at 9.30 - its a wash. No one loses. So to some degree that is what they think the price of the stock will be in November.
Its wild that anyone would invest right now, seeing how the masses think the stock is going down ANOTHER 66 percent in a couple of months.
If you are buying a put, you look at the stock price in November.
If the price is at 9.30 - its a wash. No one loses. So to some degree that is what they think the price of the stock will be in November.
Its wild that anyone would invest right now, seeing how the masses think the stock is going down ANOTHER 66 percent in a couple of months.
Its actually quite a bit worse than that.
You lose 100% of your investment, if the stock stays above $17.50.
You donāt even break even until the stock drops below $9.30.
You earn a bit more than 100% if the stock goes to $0.00
Note:
A 100% loss is much worse, than a 100% gain -is good.
A loss of just 50%- would require a 100% gain on another trade to offset it
I wouldnāt buy that Put UNLESS I was fairly certain that DJT stock is going to be worthless by November.
On top of the price tanking, etc. something else that is really interesting is the asymmetry of reporting. When the stock of truth social was around $65, trumps increase of net work of 6 billion dollars was on the front page of every single news source.
I havnt really looked, but its not on the front base of any news sources that trump has lost 4 billion dollars in a single week.
Itās up in premarket. MAGAt morons think they are getting a good deal today.
Have you ever seen a stock where you absolutely, 100% knew that it would end up a penny stock? This is that.
The only question that remains isā¦ when?
So a more techinical questionā¦ can a stock go to zero? I guess it just gets to penny stock status, and as long as someone is pumping money into the company it can be worthless stock and still a business for a long while.
Lets guess when it breaks the magical number $17.50
Even though I think the stockās value is zero, I donāt think it will drop below $17.50 until next Tuesday.
Question is, will we see it major selloff once it drops below this target?
Best comment Iāve seen regarding DJT thus far todayā¦
āWhen it dips into the teens, Matt Gaetz will want some of it.ā - @tobyben1472 on Threads
On top of the price tanking, etc. something else that is really interesting is the asymmetry of reporting. When the stock of truth social was around $65, trumps increase of net work of 6 billion dollars was on the front page of every single news source.
I havnt really looked, but its not on the front base of any news sources that trump has lost 4 billion dollars in a single week.
Thatās the thing with Trump, you canāt keep up with all his shit. Itās just an endless spew that no one can keep up with.
Like trying to track his lies. While you are writing one down, heās already let 2 or 3 more go. You canāt keep up with it.
On top of the price tanking, etc. something else that is really interesting is the asymmetry of reporting. When the stock of truth social was around $65, trumps increase of net work of 6 billion dollars was on the front page of every single news source.
I havenāt really looked, but its not on the front base of any news sources that trump has lost 4 billion dollars in a single week.
This āinvestmentā is a lot more elves and leprechauns - than balance sheets and legal accounting.
Summary:
Max loss- $8.20 (DJT is above 17.50)
Max Gain - $9.30 (if DJT goes to zero)
Break even stock price- $9.30
Ponder that for a secondā¦
This is where I will plead ignorant. Can you put this in laymanās terms? Assume that I am a 10 year old.
Please donāt be insulted if you know this, but for a ten year old:
A put is a right to sell a share at a set price at a set date in the future. At that date if the price of the stock is below that of the agreed upon price you can buy it in the open market for the lower trading price and sell it for the higher set price. Since it is unknown what the price is in the future you have to pay for the option to sell at the set price.
Now lets do it with the DJT example:
In November you have the right to sell DJT at $17.50.
In order to have this right you must pay $8.20 now.
In November if the stock is at $17.50 or above you will not use the option and therefore you will lose the $8.20 you paid (max loss)
In November if the stock goes to zero, you will buy it at zero and sell it at $17.50 making $9.30 ($17.50 - $8.20)
In November if the stock goes to $9.30 you will buy it at $9.30 and sell it at $17.50 making $8.20 on the trade which is offset by the $8.20 you used to buy the option (break even)
Today the options market values the stock at $9.30 in November because that is the break even point.
(please note these are not the actual steps that you go through in options trading and things like the time value of money or exercising early are not figured in.)
Friday.
At first I laughed, then I looked at the stocks slide, and think it could be It seems to be losing close to 10% a day, that would put Thursday in play even. It has to find support at some level, doesnāt it ???
I keep mentioning the put optionsā¦
It is true that options traderās are often just emotional gamblerās.
The cost of puts do tell you something though ā¦
Puts Nov. $17.50 - price $8.20.
Summary:
Max loss- $8.20 (DJT is above 17.50)
Max Gain - $9.30 (if DJT goes to zero)
Break even stock price- $9.30
Ponder that for a secondā¦
This is where I will plead ignorant. Can you put this in laymanās terms? Assume that I am a 10 year old.
I struggle with this, When you buy a put option, youāre buying the right to sell someone a specific security at a locked-in strike price sometime in the future.
Put Nov $17.50 - price $8.20 Means it will cost you $8.20 per share (typically done in 100 share groups so $820 now) to have the option to sell the stock at $17.50. So if stock is above $17.50 in Nov you wont execute the option since you can sell at market rate and make money.
If the stock is below $17.50 you will make the profit on the Market rate vs $17.50 so if its a a bust you make $17.50 per share or ($1,750 on the hundred) but dont forget you spent $8.20 ($820) to buy it. (where The $9.30 number comes from ($17.50-$8.20) to be in the money).
Another way to look at it your betting $820 that it goes down, payouts are if its at $17.50 you get nothing back, to win the bet it has to be below $9.30 at $9.30 its a draw you get the money you put in back out, if it goes to zero you make $9.30 or ($930)
I donāt follow options markets, I have read a few articles, where their is so much short action out there, you basically canāt short it cause it makes no sense. And I believe this is the math behind this, no one wants to sell you a put option that they lose on, so its priced such that the seller (who set the terms) is locking in a profit. Not that a bunch of folks think it will stay that high, if there were folks who thought it would go up or be up the cost of the put would be considerably less, as the seller expects to make money on the option side, not on the transaction cost side. ((My quick analysis others can give a more educated answer on why the pricing is what it is)
Dave -
I think you have the basic gist. But maybe not the details.
A $17.50 put gives you the right to sell at $17.50.
Currently ā¦
It will costs you $8 20 to buy a Put option, to sell stock at $17.50 in November.
Some possible outcomes:
Stock is above $17.50 - you lose the $8.20 you spent.
(You wonāt use the option to sell the stock for $17.50. You can sell the stock for more than that without using the option)ā¦
$8.20 loss/share
Stock is equal $9.30.
You spent $8.20 on the option, you can buy the stock for $9.30 and sell it for $17.50.
Total sale = $17.50
Total cost = $8.20 option + $9.30 for stock
Thus break even is $9.30
Stock is $0.
You can buy stock for $O.
You can sell for $17.50
Max Gain = $17.50 - $8.20 (option price)
Max Gain $9.30
One might say, that since the breakeven point is $9.30 - then this is some kind of estimated value.
Actually - percentage losses and percentage gains are not the same (i.e. a 50% loss is the same as a 100% gain)ā¦
In shortā¦
A rational person would believe this stock is very, very likely to be worthless before they would pay $8.20 for that option.
Letās see what an editor over at Forbes thinksā¦
Ć¢ā¬ÅIf you look at the fundamentals of the company, itĆ¢ā¬ā¢s poised to go down a lot more,Ć¢ā¬Ā Dan Alexander told CNNĆ¢ā¬ā¢s Erin Burnett on Monday. Ć¢ā¬ÅIf you look at the number of users this company has, the amount of revenue that it generates, you know, its valuation should be measured in the hundreds of millions of dollars, at the most. Right now, the public markets are valuing it at 3.5 billion.Ć¢ā¬Ā
Ć¢ā¬ÅSo that means this stock should fall by at least another 90% before the metrics start to make any amount of sense,Ć¢ā¬Ā he continued.
Dave -
I think you have the basic gist. But maybe not the details.
A $17.50 put gives you the right to sell at $17.50.
Currently ā¦
It will costs you $8 20 to buy a Put option, to sell stock at $17.50 in November.
Some possible outcomes:
Stock is above $17.50 - you lose the $8.20 you spent.
(You wonāt use the option to sell the stock for $17.50. You can sell the stock for more than that without using the option)ā¦
$8.20 loss/share
Stock is equal $9.30.
You spent $8.20 on the option, you can buy the stock for $9.30 and sell it for $17.50.
Total sale = $17.50
Total cost = $8.20 option + $9.30 for stock
Thus break even is $9.30
Stock is $0.
You can buy stock for $O.
You can sell for $17.50
Max Gain = $17.50 - $8.20 (option price)
Max Gain $9.30
One might say, that since the breakeven point is $9.30 - then this is some kind of estimated value.
Actually - percentage losses and percentage gains are not the same (i.e. a 50% loss is the same as a 100% gain)ā¦
In shortā¦
A rational person would believe this stock is very, very likely to be worthless before they would pay $8.20 for that option.
Pretty sure thatās what I said, Assuming you do not own the stock today, you will need to buy it in Nov to sell it with the Put, so when I mentioned buying it at Market Rate, thats cause well thats what you will do to sell it with the put.
In shortā¦
A rational person would believe this stock is very, very likely to be worthless before they would pay $8.20 for that option.
And thatās the point that is hard to interpret from your Put values, from a glance for a non-options person.
A high sell point for a future put, indicates, the market is saying oh its probably gonna be lower than this, so I want a bunch of guaranteed money to get into this deal.
Opposite, if a Nov $17.50 on DJT were selling for $1 thatās because the market seeās it as a Free $1 cause almost certainly the stock will be more than that in a few months, so everyone is willing to sell the put and high supply, low demand, price falls.
Donāt know where to see this, anyone have a graph or table, for April, of % drop each day for this stockā¦ its gotta be brutal, seems like a 10% everyday, but I mean it had to have some days that were at least not 10% drops right. Has it had a positive day, in april.
On top of the price tanking, etc. something else that is really interesting is the asymmetry of reporting. When the stock of truth social was around $65, trumps increase of net work of 6 billion dollars was on the front page of every single news source.
I havnt really looked, but its not on the front base of any news sources that trump has lost 4 billion dollars in a single week.
Heās got a long way to go before reaching Musk-level losses.
Put it this wayā¦
There is what is known as a Dead Cat Bounce.
DJT has been much less bouncy than most dead cats.
Donāt know where to see this, anyone have a graph or table, for April, of % drop each day for this stockā¦ its gotta be brutal, seems like a 10% everyday, but I mean it had to have some days that were at least not 10% drops right. Has it had a positive day, in april.
One up, two mostly flat, lots of riding the brakes on the downhill
Donāt know where to see this, anyone have a graph or table, for April, of % drop each day for this stockā¦ its gotta be brutal, seems like a 10% everyday, but I mean it had to have some days that were at least not 10% drops right. Has it had a positive day, in april.
Pick your time frame: https://www.google.com/finance/quote/DJT:NASDAQ?hl=en
Surely news of a streaming capability will send it to the moon: https://www.cnbc.com/2024/04/16/trump-media-shares-fall-7percent-after-saying-truth-social-to-launch-tv-streaming-platform.html
.
Surely news of a streaming capability will send it to the moon: https://www.cnbc.com/2024/04/16/trump-media-shares-fall-7percent-after-saying-truth-social-to-launch-tv-streaming-platform.html
There is NOTHING more exciting than watching a deranged geriatric make up incoherent lies on social media.
Itās like watching C-Span when you are black-out drunk!!
Entertainment gold!!