11/13/2020 21:41

$Corsair Gaming, Inc. Got a Question about calls. I bought one for dec 12 for a $30 call. It says i have to hit 32.45 to break even.. but if i sell my contract rn ill get $288 When i bought it for 245.. how does that work, im a little confuse.. do i Have to wait for it to hit 32.45 to sell or can i do it now and make the 43 dollar profit.
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All Comments(6)

Green_dragon11/13/2020 22:54
Also, watch on the time decay, theta indicator. In other words, for an example let us say that on Monday at 9:30 the stock price is the same as it was at the closing today, then your contract on Monday would be valued less than it was today. Here is an excerpt from the Investopidia "Theta is a measure of the rate of decline in the value of an option due to the passage of time. It can also be referred to as an option's time decay".

Note that theta does not care it was Saturday and Sunday, it counts as two full days that would increase the time decay.

Go to option calculator on the web and play with it, to see how it influence the value of option.


J Pandeng11/13/2020 22:31
Single options like that have intrinsic and extrinsic value (aka premium). Intrinsic value is the value you can extract from it this moment if you exercise it to buy 100 shares. Since the stock is less than your strike, it has no intrinsic value right now since why use your call to buy at 30 when you can buy it for cheaper on the market. For example it will have 1.24 in extrinsic value when the stock is at 31.24 since exercising it and selling the shares would result in a 1.24 profit per share.

Extrinsic value is simply the premium people are paying for the option on top of any intrinsic value it may have, and it’s determined by a lot such as time till expiry, volatility, market sentiment, etc. If you want to understand how to interpret how extrinsic value will behave, look up “Option greeks”

The breakeven point is when the intrinsic value will be more than what you paid for the option, and intrinsic value is what you should be betting on when you purchase the stock because extrinsic value is fickle and can cause it to drop if the stock rises too slow. Highly recommend looking more into this stuff if you want to buy more options. Don’t buy what you don’t understand.

WeakPaperHands11/13/2020 22:40

Thank you this comment. It cleared a lot of stuff up. I watched “IN THE MONEY” option video and it cleared a lot of stuff up. I was just confused about that part but it makes sense now. Thank you!


pvt***com11/13/2020 22:13
please at least you tube option trading before giving it a swing

WeakPaperHands11/13/2020 22:32

In the money, out the money, dont exercise unless you have the cash in the account. I think i got the basics of it. It’s just my first time doing it so it was conFusing, but people cleared it up. Thank you.


Matthew Lamones11/13/2020 21:49
Break even is if you intend to exercise it to actually own the shares. If you sell the call you can collect the profit you see now.

WeakPaperHands11/13/2020 21:55

Okay that makes sense. So i can hold my contract until the Expiration date and hopefully it would be worth more or i can sell it now and take the small profit? Either way if it goes up, i should still be good right? As long as it doesnt tank?


ryan11/13/2020 21:47
you can sell it whenever don't have to hold it through, try watching some videos on youtube about options though, you can get burned really bad if you don't know what you're doing

WeakPaperHands11/13/2020 21:52

I watched a few, i get how it works just that part confused me a little.


viper11/13/2020 21:46
no, that is the average cost per share. so to be in the money they need to hit that price a minimum. if you sell now you make $43. or you can purchase the 100 shares at $30 a share for $3000 total and hold the shares

WeakPaperHands11/13/2020 21:52

Okay thank you. That helped!


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