If you can time it right you can make a ton of money (100x) by buying way out of the money sell options on Pfizer. They have to go bankrupt while you hold the option tho, so its not easy.
Wish I understood that stuff more. And knew what tools to use to do this. But what I think you're saying is, when the stock is going down it'll have peaks and valleys otw down. You have to predict the valley and sell on one of those peaks right? But you're automatically setting it up to sell once it's up a certain amount?
Options are just that, options, not obligations. You have to pay for them, but that price is much smaller than the price of the stock. They have an associated price and time, so let's say you buy the right to sell Pfizer at $1 / share before Jan 2024, and that option costs $0.01 / share. If you buy it now, it is worthless because you could sell the share for much more than $1. But if the price of Pfizer drops to $0.05, then suddenly your options are worth $0.95 each, you can buy a share for five cents and turn around and sell it for a dollar.
If the time runs out and you don't exercise them, they expire, worthless. And the reason the options were so cheap is because the people selling them never thought it would be possible for the stock to fall so far so fast. But surprises do happen.
Full disclosure, I've lost a lot of money doing this, its a quite advanced and risky strategy.
If you can time it right you can make a ton of money (100x) by buying way out of the money sell options on Pfizer. They have to go bankrupt while you hold the option tho, so its not easy.
Wish I understood that stuff more. And knew what tools to use to do this. But what I think you're saying is, when the stock is going down it'll have peaks and valleys otw down. You have to predict the valley and sell on one of those peaks right? But you're automatically setting it up to sell once it's up a certain amount?
Options are just that, options, not obligations. You have to pay for them, but that price is much smaller than the price of the stock. They have an associated price and time, so let's say you buy the right to sell Pfizer at $1 / share before Jan 2024, and that option costs $0.01 / share. If you buy it now, it is worthless because you could sell the share for much more than $1. But if the price of Pfizer drops to $0.05, then suddenly your options are worth $0.95 each, you can buy a share for five cents and turn around and sell it for a dollar.
If the time runs out and you don't exercise them, they expire, worthless. And the reason the options were so cheap is because the people selling them never thought it would be possible for the stock to fall so far so fast. But surprises do happen.
Full disclosure, I've lost a lot of money doing this, its a quite advanced and risky strategy.
Thank you for the detailed comment. It's making me want to dig deeper!