6D·

Option expiry

Actually, I didn't want to increase the NU at all - but now it's been thrown at me... ^^

Will be sold again as a short call and premiums earned in the meantime. Not sure yet about strike and maturity. Possibly 15s in June. Could live with 36% profit on the selling price and the premium would be around 2% over 3Mte... Schauma mal!

24.03

Nu Holdings

Compró 200 a 11,00 US$

2200,00 US$

7 Comentarios

Roan@HrtPyn

What do you mean by strike, what do you mean by 15s, and what premiums are you talking about? That's like a new language 😂

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GeldGenie@GeldGenie

@HrtPyn You're right, it really does seem like a new language at first! I'll try to explain it simply:

1. "Strike" (or strike price) is the price at which I have to sell the stock if the buyer of the option exercises it. For example, if I write a "call option with strike 15", this means: I undertake to sell my share for $15 - no matter how high the price is then.

2. "15 in June" means in concrete terms: I am considering selling a call option with a strike price of $15, which expires in June. So the buyer has until June to buy the share from me for $15.

3 "Premiums" are the money I receive when I sell an option. In return, I assume the risk of possibly having to sell the share at a fixed price. In my example: If I got the NU stock now at $11 and sell an option with a $15 strike, I might get, say, $0.30 to $0.50 per share as a premium. That's income no matter what - as long as the option is not exercised.

The whole thing is called a "covered call" - I own the share and at the same time sell the right to someone else to buy it from me. If the price stays below 15, I keep the share and collect the premium. If it rises above 15, I have to sell it - but at a profit. But I may "lose out" to the market if the share is then at 16, 17 or even higher.

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Roan@HrtPyn

@GeldGenie Wow, thanks for the detailed clarification! Good luck!

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GeldGenie@GeldGenie

@HrtPyn No problem :-)

Thank you 🙏

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Patrick@Pazi3

@GeldGenie So if the share falls to $6, you take the price loss with you, but still get the premium?

What's the catch? I'm missing something right now

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GeldGenie@GeldGenie

@Pazi3 Exactly.

The catch is that I don't take/risk overperformance with me.

Someone on the opposite side assumes higher prices at the corresponding time. If the thing then stands at 20, the counterparty buys it "cheaply" at the strike price. 😊

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Patrick@Pazi3

@GeldGenie basically an interesting possibility. Thanks for the article, I didn't know that before. 👍🏼

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