5 Tips and Tricks to Stop Losing All Your Money on Options
Look, we've all been there. You push your cart past the frozen chicken tendie aisle in Costco, check your Robinhood account, and there's just not enough. You put your head down in shame as your options expire worthless and you loop back around for a second free sample before they notice you keep coming back. At Wall Street Supply, we want nobody leaving Costco without that huge bag of frozen tendies, so we're lending our expertise to provide the best 5 tricks and tips to prevent your options from expiring worthless and maybe unlock the green theme on your Robinhood account.
1) Greeks - You probably remember them from pledging that fraternity on campus, but what do they have to do with options? There's a lot to know about the Greeks, Delta, Gamma, Rho, Theta, but the most important thing is to completely ignore these. We speak English in America, so why pay attention to some outdated language that's just confusing anyway? The nerds will tell you that Greeks are an important measure of what option you're buying, how time can affect the premium as you move closer to expiration date, and --- did you fall asleep yet? Jesus Christ that was boring to even type. Seriously, don't pay attention to the Greeks, unless you're like some fucking nerd or something. It's just too confusing, and we don't like confusing here at Wall Street Supply.
2) Due Diligence - DD is an ancient mythological tool to decide whether or not a specific security will yield a specific amount of tendies for you to heat up in the microwave and enjoy. Old boring investors such as Warren Buffett actually research the company that they're about to purchase, look at their financial documents, and forecast the stability/growth of the company before making a decision. This time consuming waste of energy is completely useless, as we have seen with Hertz and GNC. Don't be a fucking nerd and look at excel spreadsheets to figure out whether or not a company is good to buy, just google whichever companies have gone bankrupt this week, then go ALL IN on their stock.
3) Strike/Expiration Date - High Risk, High Reward. You have to spend money to make money. Anyone with a business-oriented brain will tell you this over and over, and for good reason - it's true. We highly encourage that you refrain from buying ITM options with an expiration date that's more than a week away. What is this, value investing? We don't have time for all of that. If you think a stock that's currently $100/share will go up, buy $130 calls that expire the same week. It's seriously the only way to secure your lambo and tendies, ITM options are seriously for pussies and any Wall Street Trader who's been on CNBC will tell you the same thing.
4) Stonks Only Go Up - With the unlimited QE and the money printer that will never run out of ink, stocks pretty much exclusively go up. I mean, sometimes they don't, I guess, but that's just a red herring. If the market is down and your calls are getting fucked, the bears on FinTwit are starting to laugh at you, Trump will release a tweet that sends all of the bears running back to their wife's boyfriend.
5) Risk - Out of all of the aspects of trading we have discussed today, risk may very well be the most important. Nobody gets rich by playing it safe, so you need to take some serious risk if you wanna stop getting kicked out of Costco for taking too many free samples. For example, put all of your savings account, student loans, and mortgage directly into your Robinhood account. Seriously, it happens all the time and I'm sure it works out great for those who do it. Ran out of money entirely? Get a payday loan, credit card, or a bank loan and toss that shit right into Robinhood. Have an IRA earning 2% interest in a Money Market or CD? I'm falling asleep even thinking about it. Take your life savings, borrow from family/friends/banks/loan sharks, and put it all into Call options that expire the same week. You may ask yourself, is this worth the risk? And the answer to that is, how badly do you really want that yacht?