Listed below are examples of regular Long Put and Call trades
What I am having trouble ' Understanding " is..... How are these calculated/ and how could I as a Trader, know that if GM stock moved down by 9.42% that the $32 Put that I bought would Net me a profit of 100% ?
Is there a certain Options Calculator that I can plug in the numbers, that will tell me exactally how much in price that GM will have to move in order for my $32 Put to give me a 100% return ?
Here are the EXAMPLES.....
A 9.42% move down in GM from $36.21 to $32.80 got us 100% in GM September 32 puts
A 3.87% move down in PM from $78.31 to $75.28 got us 94.1% in PM March 75 puts
A 5.16% move down in MGM from $25.57 to $24.25 got us 50% in MGM September 25 puts
overnight
A 3.4% move down in CAT from $86.26 to $83.30 got us 83% in CAT June 82.50 puts
A 5.8% move in IMAX from $25.33 to $26.81 got us 116% in IMAX September 28 calls
A 7.9% move in ARUN from$19.09 to $20.61 got us 54% in ARUN February 21 calls overnight
A 5.3% move in FTNT from $22.63 to $23.84 got us 77% in FTNT July 24 calls
A 6.6% move in RMBS from $13.78 to $14.70 got us 100% in RMBS August 15 calls
Here is an EXAMPLE from the same article that the above trades were listed in......
I recommended that my readers purchase the ARUN February 21 calls (ARUN140222C00021000). We entered the calls on Jan. 14 at $0.55, or $55 per
contract, when ARUN common stock was trading at the $19 level.
The very next day, the stock shot up almost 6%, at which point I alerted my readers to close one third of the position at $0.85 for an overnight profit of 55%. We could have closed the entire position and
Thanks for the help,
I just want to be able to "Know" that , when ever I buy a Long Call or Put , that if the stock moves X amount of dollars , that I can expect a near 100% return , 50% , 150%, etc....
My thinking is,
if I expect a $50 stock to move 5% = $2.50 ,
I want to be able to know what ROI that move in the stock will return to me via the Option that I buy.
So..... If all I want to try and get is a 100% return, and a move lesser than $2.50 on the $50 stock will give me that 100% return, this would then change the
strike that I would look to buy
Thanks so much, Always appreciate this Forums help - Michael