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Option Maestro

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  • 5 Reasons to Buy Gulfport Energy [View article]
    This strategy is explained at the bottom of the article. I state the theo value is $10 per contract. Assuming I could get the rights to anything above $7.50 on 100 shares of this for $10 versus buying 100 shares for $680 my cost of opening the call position would be less than 2% of buying 100 shares. Although I am more likely to lose 100% of my investment (if it doesn't get over the strike price) it is only $10 compared to if the very volatile stock goes down.

    On Jun 29 08:11 AM ArtfulDodger wrote:

    > Macro Hickey wrote: "I have also started using a new strategy as
    > this stock can move down very fast and although I can lose 100% of
    > my investment it is less than 2% of the risk of buying the common
    > shares and watching the stock go to zero."
    > Said what?
    Jun 29 12:56 PM | 1 Like Like |Link to Comment
  • 5 Reasons to Buy Gulfport Energy [View article]
    Yes sorry for not being more clear. A 7.50 Call contract gives me the right to the shares (100 per contract) at $7.50 until the July options expiration. In return I pay a premium for this "right". The theoretical price or the theo value is the most probable value you could open or close the contract for. This splits the bid/ask price, and as I wrote this article the ask was $20 per contract and there was not a bid ($0 per contract); think of it as averaging the bid and ask prices.

    On Jun 29 09:05 AM Shale Gas wrote:

    > "I have been speculating with this stock by purchasing the July 7.50
    > Call contracts. The theoretical price at which they can be purchased
    > is $10 a piece."
    > Can you please explain this statement?
    Jun 29 12:28 PM | Likes Like |Link to Comment
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