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I have bought USO, and UCO today. I should have waited till 10 and 20 even. I am going to reevaluate my potions on Friday, than again after new year. If no confirmation, I will cut my losses.
Today, GE cost $25.71. If I Bought the Call Option for GE with the expiration date of Jan 23, the premium for each share is $0.37. 100 contracts = 10,000 shares and it would cost me $3,700. In order for me to double my investment, all GE has to go up to is go to $26.50 within the next two weeks or so, correct?
Stick with the monthly options, which are the ones that expire on the third friday of each month.
So, a Jan 17 $26 Call would cost roughly 0.27, you would need to see GE hit 26.50 to double your money.
Quote:
Originally Posted by Quaker15
Why not go Buffett with it?
UCO is a leveraged ETF, which is not Buffet style. It will decay over time and I would be an idiot to hold it long term.
HAL is a solid company and I'm sure it will be fine eventually, but I don't like to have dead money in my portfolio. I know it isn't going back to its all time high overnight, so there will be plenty of time for me to get back in and in the meantime I'll be putting my money into stocks/etfs that are working right now.
I have bought USO, and UCO today. I should have waited till 10 and 20 even. I am going to reevaluate my potions on Friday, than again after new year. If no confirmation, I will cut my losses.
If USO isn't a part of your long-term portfolio, why buy both, save some money on commission.
Stick with the monthly options, which are the ones that expire on the third friday of each month.
So, a Jan 17 $26 Call would cost roughly 0.27, you would need to see GE hit 26.50 to double your money.
UCO is a leveraged ETF, which is not Buffet style. It will decay over time and I would be an idiot to hold it long term.
HAL is a solid company and I'm sure it will be fine eventually, but I don't like to have dead money in my portfolio. I know it isn't going back to its all time high overnight, so there will be plenty of time for me to get back in and in the meantime I'll be putting my money into stocks/etfs that are working right now.
26.50 would more than likely not double your money with a 26.37 BE
I have bought USO, and UCO today. I should have waited till 10 and 20 even. I am going to reevaluate my potions on Friday, than again after new year. If no confirmation, I will cut my losses.
I also bought UCO yesterday at 10.98 with a tight stop. This will be a short term trade for me, I doubt I'll hold it more than 4-8 weeks.
26.50 would more than likely not double your money with a 26.37 BE
Now that the market is open, I can give you more details...
JAN 17 $26 CALLS:
ASK: $0.28
If GE goes to $26.50 10 days before expiration, the option would be worth $0.58
If GE goes to $26.50 5 days before expiration, the option would be worth $0.53
If GE goes to $26.50 15 days before expiration, the option would be worth $0.62
If GE goes to $26.50 20 days before expiration, the option would be worth $0.67
Now that the market is open, I can give you more details...
JAN 17 $26 CALLS:
ASK: $0.28
If GE goes to $26.50 10 days before expiration, the option would be worth $0.58
If GE goes to $26.50 5 days before expiration, the option would be worth $0.53
If GE goes to $26.50 15 days before expiration, the option would be worth $0.62
If GE goes to $26.50 20 days before expiration, the option would be worth $0.67
(GE is 25.72 when I wrote this)
UPDATE: It's already up 32% since I posted.
If he paid 37 cents a doubling of your money would be 74 cents before costs
You are also quoting the wrong option. He said the 26s that expire on jan 23 not the 17th
That was my point. I add well over 2k/month to my accounts. It gets complicated to estimate returns like that, especially when you are starting out. 1 year of investments with no gains at this point will increase my portfolio by about 15%.
I was wondering if people actually had a system or a portfolio tracker that calculated annualized returns for you.
It is complicated and you need more than high-school math, you also need some solid definitions.
Once you know the formulas, it is not hard, just a little bit of Excel data entry.
I think I will write a new post about this, titled "Computing Portfolio Returns". It deserves its own thread.
I already told the OP to buy monthly options, not weekly, which is why I used the 17th.
Which is fine, except it has nothing to do with the example he specifically asked about
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