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Anonymous asked in Business & FinanceInvesting · 2 months ago

What am I looking at here?

OP says his contracts are 26$ expiring 3/5 and $40 expiring 3/19

Has this person made $4000? Could he just take those profits now? What are the contracts and how can anybody make such a profit from so little? 

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1 Answer

  • 2 months ago

    The post appears to indicate he bought 3 call options with a strike price of $26 expiring  March 5 for $147 and at the time of his post those options could have been sold for a $4,000 profit. Certainly that is possible, but I have no way of knowing it it is actually true.

    (From your description it also appear he bought call options with a strike price of $40 expiring March 19, but you did not include details associated with that transaction.)

    <<<Could he just take those profits now?>>>

    He could have made that profit if he sold at the time he made the post. If he has not sold yet he will make either more of less than that when he does sell.

    <<<What are the contracts and how can anybody make such a profit from so little? >>>

    The contracts are call options which give him the right (but not the obligation) to buy 100 shares per contract by paying the strike price ($26 per share) at any time before the options expire on March 5. 

    It appears he bought the options when the price of the stock was way below $26 per share so the contracts were very inexpensive.

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