Thread: Loser but why?

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  1. #1

    Default Loser but why?

    Yesterday I bought 100 september 195 calls of GLD @ .10c ($1000.00) held overnight and this am the stock was up 1.23 BUT my CALL option lost $735.00 down fro .10c to less tham .4c the put lost .92c per share last look.

    Can anyone tell me how the heck you can lose this money? I think the point of a CALL is that when the stock moves up ypur option should move up yet I lost nearly 80 of my investment. Yes I sold but the calls are still down right now so what gives? :thumpdown::s::x
  2. #2


    Now that I have a little more time let me try being a little more helpful and a little less of a smartass. My hope is you have a lot of money and this $700+ loss was no big deal to you.

    When you buy a call you are buying the RIGHT to BUY the underlying stock at the strike price any time prior to expiration. Specific to your case you bought the right to buy GLD at $195 between yesterday and this coming Friday. Options (usually) expire, for all practical purposes, on the third Friday of the month.
  3. #3


    GLD closed today at $178.54. Do you think there is much of a chance GLD will move above $195 before the market closes on Friday? Probably not. You took the wrong side of the trade. You should have been selling that call if you could have found someone ummmm...uninformed enough to buy it.
  4. #4


    There is a reason that the option you bought was cheap. Unfortunately, it cost you $700 to figure that out. In my mind, there ait nothin cheap about a $700 lesson. Learn it well, my friend. And I am going to say once again, do not trade options until you understand them. Most of us can not afford very many lessons like this.
  5. #5


    Thanks for the advice. I pretty much figured it out and see just where I should have been much more in the money with this option. I have been trading mostly in the money calls and puts and have done fairly well in the six months I have been trading.

    The money is not critical to me as I am comfortably retired and took eight k out of my savings which as you know pays squat. I only use money I can afford to loose. Living in Las Vegas gave me that lesson many years ago. I did real well betting SLV in May and so far I am still up 80 in the time I'm trading.

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