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You don’t get to use the premium, it’s held in escrow as collateral against the position. There is basically zero chance NVDA goes in the money on these, but that wasn’t the goal. The real way this trade is profitable is any spike in volatility will decrease the spread. I.e: I opened the spread and received a $29.99 premium by putting up $0.01 in risk. NVDA earnings has a 5-7% run up in a few weeks… (very possible, look around at all the insane volatility) Now the spread is “more likely” to hit, IV increases, and there are buyers for $26-$28. I close the position for $27 and keep $2.99 x 100 x 225 =$67,275.00 for ~$250 in risk. This play is about as dumb as buying single leg call options that are deep out of the money. It’s dumb, and gambling, but not as regarded as the millions of people in this sub that don’t actually understand options.
Stop using words you read here but you don’t understand. Everyone has a “thesis” but they have no clue what it really means.
Shouldn’t he be getting margin call for about $675K. Because he has to buy 225,000 shares at 320 a pop and sell it back for 290 a pop which should leave him a difference of $675K? Why is he getting margined call for $6M+?
I think you are dumb because nvda has close to 0% chance of reaching 290 by 12/19. Even if nvda gets to 270 or 280 by then, which is still highly unlikely, You still incur the maximum loss of the spread which is (30 - 29.99 - (the fee / 22500)) \* 22500 = $206 However, as long as you didn't get assigned before expiration, I suppose you do have the premium you received for selling the spread. which you can invest for 1 month and 19 days before you lose it when the position expires. Seems like a weird way to gain access to capital but maybe there is some world where this makes sense?
This is interesting, I had similar assignment just before midnight, and seeing the assignment message dated 12:01 AM now, and at 3 AM long puts has been assigned. Does it mean I will pay 1 day of margin interest for $133K? https://preview.redd.it/mf7h3m9iziyf1.jpeg?width=1290&format=pjpg&auto=webp&s=01dcdf7df7906b9f0e395d842222828a233ea209
US has the German equivalent of Stasi on the Streets. And Market goes Up because why Not.
My investment strategy has been rated 'Hold' by every analyst. Mostly because I'm holding a handful of empty ramen packets and waiting for my options to print
predictions market is a simple yes/no contract that you can trade anytime before the game ends. Normal sports betting involves a lot more robust bets on scores or individual players. I'm a simple man and I let my yes be yes or my no be no lol example; 70 cents xyz team wins pay out 1 dollar or 30 cents abc team wins pay out 1 dollar. You bet on the underdog, midway through the game the underdog has a massive overturn and is leading! so the contract prices flip. You flip and lock in a profit or you hold till the end in hopes that they stay ahead and you get your full payout. I have been betting against Texas this entire time and won flipping contracts when mississippi upset midgame....I should have sold everything in that moment or bet that Texas might have a huge comback as the contract dipped from 80 cents to 4 cents texas win. Instead I sold most of my bag for a smaller win and let the rest expire worthless.
I've no skin in this one so happy to be wrong too. Although, if you're holding shares and not trading it then im sure you'll have an opportunity to break even or make proft, just not sure when. I think it has potential down the line.
You may be right but you never know what announcement is next. The stock has bottomed out and on a gradual uptrend. Institutional holders have also been increasing positions
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