Quote (FrenchVanilla @ Mar 30 2022 12:55am)

So please do explain, id love to hear how a stock split will affect the decisions of a company or real investors in terms of intrinsic value. Or even what your interpretation of intrinsic value is.

And just because the price goes down and makes options cheaper, the amount cheaper of the options is correlated to the drop in in share price. Sure the nominal cost per contract goes down, which is what I'm sure you're alluding to in terms of capital requirements. But your entire premise is based that there are armies of hopeless gamblers with under like 500 dollars just waiting to throw money into lower cost options they otherwise couldn't afford, which is just silly. Also if the volatility randomly spikes up the price of options goes up anyway.

So again i ask. please enlighten me on how any of this is going to affect anything.

Quote (CheatEngine @ Mar 30 2022 02:36pm)

He means that in order to write, say, a call contract (covered), you need to hold 100 shares of the stock. That is a hard and fast rule if you want it to be covered. I'm not aware of any readily available options contracts that go fractional / less than 100 shares. So AMZN being at $3000+ makes a whole realm of option strategies completely inaccessible. Splitting the stock makes it easier for contracts which again, are in units of 100 shares, to be written/traded.

There are plenty of option strategies where holding the underlying shares isn't required, but there are many where it is.

Quote (FrenchVanilla @ Mar 30 2022 02:32pm)

this makes sense. i could see how needing 300k layout for a covered call would be an issue. but is there really that many people doing such strats to influence the price a significant margin? I do some options trading on a trade account but i never really got into strategies of it. i usually do it as a hedge to my long-term positions during periods where the company is under perceived duress, while also buying the underlying stock. (yes i know its kinda sacrilege to do that)

Quote (CheatEngine @ Mar 30 2022 11:36am)

He means that in order to write, say, a call contract (covered), you need to hold 100 shares of the stock. That is a hard and fast rule if you want it to be covered. I'm not aware of any readily available options contracts that go fractional / less than 100 shares. So AMZN being at $3000+ makes a whole realm of option strategies completely inaccessible. Splitting the stock makes it easier for contracts which again, are in units of 100 shares, to be written/traded.

There are plenty of option strategies where holding the underlying shares isn't required, but there are many where it is.

Quote (FrenchVanilla @ Mar 30 2022 12:32pm)

this makes sense. i could see how needing 300k layout for a covered call would be an issue. but is there really that many people doing such strats to influence the price a significant margin? I do some options trading on a trade account but i never really got into strategies of it. i usually do it as a hedge to my long-term positions during periods where the company is under perceived duress, while also buying the underlying stock. (yes i know its kinda sacrilege to do that)

Quote (NetflixAdaptationWidow @ Mar 30 2022 03:27pm)

There are a ton of retail traders doing basic covered call strategies on stocks like Amazon.

Instead of just insisting I'm wrong maybe learn the absolute fundamentals of what you're talking about.

Quote (BOOTYS @ Mar 30 2022 05:31pm)

Hi guys, what is options and how do i do that?