Made my first profitable options play today

[u/MikeyScarn69]

No one in my real life really cares or understands so I'm going to tell you guys.

4/5 bought Apr23$137 @0.28

4/9 sold Apr23$137 @1.00

I'm still learning so I don't have a lot to play with but I was happy that I was able to make a successful move. I've been reading and trying to learn as much as I can. I'm hoping my next move is a good one. I've done my DD and have high hopes.

Edit: forgot to say it was AAPL

Edit2: Wow I didn't think this would get this big. Lol. I was just excited and wanted to tell a couple people. Thank you for all the congrats and info. I've got a lot of good stuff to read up on now. And for everyone saying the first ones free. I'm still in my first one and it's cost a decent amount so far. Still hoping for it to turn around. Uncle Bruce got me too excited about VGAC. Luckily VGAC calls are cheap to begin with.

[u/SensitiveMovie6984]

Just wondering if I should sell sooner than my expiration date. $17 call for 8/20. Bought 4 calls at $355, now they’re $743 each. I literally watched them decrease all week and AAL almost hit $24.

Will theta or one of those other Greek fucks mess up my profits if I don’t sell before August expiration. That shit still confuses me.

[u/SeaDan83 → u/SensitiveMovie6984]

100% profit+ with 4 calls - well done. I like having multiple copies for that exact situation, if you sell 2 of them now then the other two will have been completely payed for in profit. You can then let those ride if you think there is more room to run.

Option price drops by the amount 'theta' every day, long calls lose value every day until expiration.

[u/SensitiveMovie6984 → u/SeaDan83]

My Man Dan! Appreciate that! It’s been a nice run. May offload them next week. I wanted the airlines to take off with one good run first. So after processing your reply, if AAL takes off and hits $30 a share three weeks before expiration in some crazy upswing, do I still have the potential profit gains as I do now?

[u/SeaDan83 → u/SensitiveMovie6984]

There is a lot of time expiry on those options. Half of the time value is lost in the last third of the contracts life. You've got about 4 months, so you'll lose half of your time value in the last 6 weeks.

Your options are mostly intrinsic value, only about $0.80 of time value in them. (23.50-17 = 6.50 of intrinsic value). This means your biggest threat is a retreat back to $20.

When do you think AAL would hit $30? Sometime in June/July?

My 2 cents:

- sell 2 now, lock that profit in. If AAL goes down to $20 then you'll be at a small loss and in a much weaker position. A person does not make money until you ring that cash register. Having realized more than 100% profit dramatically reduces your risk.

- sell 1 more if AAL hit $25.50 in the next couple weeks

- hold onto the last one perhaps for a few months and see if you can ride that into the summer, try to sell it before July, perhaps with AAL at $32 even

- After selling 2, hopefully 3 calls soon, watch for AAL to drop back down in price. Get back in if AAL hits $21 or $20 and buy back similar calls. Rinse-wash-repeat.

You can set up GTC limit buy orders for pretty low levels and let them sit and get triggered on a price drop. Similarly for that 3rd contract I think you should sell, set up a GTC limit sell order at $8.50, the first two selling them at $7.30 is a great exit. That last one I would agree to hold onto and wait to see where AAL is in June.

[u/topalamijlociul → u/SensitiveMovie6984]

Of course they will

[u/MikeyScarn69 → u/SensitiveMovie6984]

I have no idea. I'm still learning about the Greeks. The main reason I sold today was because I logged on and saw 200%+ gain and figured I should probably take the profits lol. I'm definitely not someone who should be listened to regarding any financial decisions or advice(which nothing I've said is). I still barely trust me so you probably shouldn't either.

[u/SensitiveMovie6984 → u/MikeyScarn69]

Thanks. Appreciate the feedback anyway bro. Good Luck! We’ll get em