I promised an accounting for these strategies and now that GME's options have expired we can count the money. I'm going to include a "What If" to demonstrate how these would have worked out "If" GME had closed at a price of $41.50Quote: s2dbaker
1 Wide) The Long Strangle
Buy GME May 18 $39.50 Call @ $0.31
Buy GME May 18 $37.00 Put @ $0.27
Total cost (sans commission and fees ) $0.58 and I make money when it moves beyond the range $36.42 to $40.08
Risk of ruin $0.58 * 1800 = $1044
I could buy 18 with $1044
1 Narrow) The Long Strangle
Buy GME May 18 $39.00 Call @ $0.45
Buy GME May 18 $37.50 Put @ $0.40
Total cost (sans commission and fees ) $0.85 and I make money when it moves beyond the range $36.65 to $39.85
Risk of ruin $0.85 * 1200 = $1020
I could buy 12 with $1020
2 Long) The Long Straddle
Buy GME May 18 $38.50 Call @ $0.66
Buy GME May 18 $38.50 Put @ $0.81
Total cost (sans commission and fees ) $1.47 and I make money when it moves beyond the range $37.03 to $39.97
Risk of ruin $1.47
I could buy 7 with $1029
2 Short) The Long Straddle
Buy GME May 18 $38.00 Call @ $0.91
Buy GME May 18 $38.00 Put @ $0.58
Total cost (sans commission and fees ) $1.49 and I make money when it moves beyond the range $36.51 to $39.49
Risk of ruin $1.49 * 700 = $1043
I could by 7 with $1043
3) The Long Guts
Buy GME May 18 $37.00 Call @ $1.64
Buy GME May 18 $39.50 Put @ $1.47
Total cost (sans commission and fees ) $3.11 and I make money when it moves beyond the range $36.39 to $40.11
Risk of ruin $0.61 * 1700 = $1037.00
I could buy 17 with $5287 (much more money up front but $2.50 per option or $4250 is guaranteed in value )
Just to be clear, these people are always wrong. Here is what they sent me on August 25, 2009Quote: Moneynews
Dear Moneynews Reader,
I recently interviewed my favorite stock picker . . . Bill Spetrino.
Bill’s model portfolio has captured 161% returns since 2009 and his readers have done great following his wisdom (one man even made $1.2 million listening to Bill’s advice).
But with the stock market hitting all-time highs, I wanted to see if Bill thought it was time to get out before the a sell-off wipes out our gains.
To my surprise, Bill said: “Buy more.”
In fact, he believes the stock market is poised to rally 399% (catapulting the Dow to 60,000!).
We can expect to market to crash. The question is when, not if.Quote: Moneynews, August 25, 2009
The U.S. dollar is going the way of the Mexican peso: down!
More than $10 trillion in government spending is triggering a sudden and massive devaluation.
The TARP chief told Congress the federal bailout will now total over $23 trillion! That would be over $70,000 per person.
But if you act fast, you can protect your life savings from 1970s-style mega-inflation . . . and you could DOUBLE your money . . .
I guess they think that if they predict everything will happen then they'll get something right.Quote: Moneynews
Wiedemer, best known for correctly predicting the collapse of the U.S. housing market, equity markets, and consumer spending that almost sank the United States during the “Great Recession”, provides disturbing evidence in the video interview for 50 percent unemployment, a 90 percent stock market crash, and 100 percent annual inflation . . . starting as soon as 2013.