Investing General Discussion

• Short the stock: means borrow stock, sell it immediately at the current price. Buy it back and return the stock later. You may need certain account level privileges for this depending on your broker, typically margin account is required.
  • Pro/Con: Potential loss = infinite. Potential gains = 2.16$ per share shorted assuming it goes all the way to zero. Reality: somewhere in between those extremes. You will pay interest on the amount "borrowed" so your profit should plan to be greater than that, which if your thesis is correct it should be. Otherwise you borrowed money and pay back more than you borrowed. Like taking out a mortgage
• Buy PUTS: you buy the ability to sell the stock at a specified price by a specified date. You may choose to do this at any time(american style options) or you can simply sell the put back to the market/someone else at any time
  • Pro/Con: Max loss = what you pay for the put. This will change depending on the price you want the ability to sell the stock at and the date you want as a window in which to do this. Max gain: in theory again 2.16$ but realistically not

Rangoth said:

2 choices(outside of more challenging plays):

• Short the stock: means borrow stock, sell it immediately at the current price. Buy it back and return the stock later. You may need certain account level privileges for this depending on your broker, typically margin account is required.
  • Pro/Con: Potential loss = infinite. Potential gains = 2.16$ per share shorted assuming it goes all the way to zero. Reality: somewhere in between those extremes. You will pay interest on the amount "borrowed" so your profit should plan to be greater than that, which if your thesis is correct it should be. Otherwise you borrowed money and pay back more than you borrowed. Like taking out a mortgage
• Buy PUTS: you buy the ability to sell the stock at a specified price by a specified date. You may choose to do this at any time(american style options) or you can simply sell the put back to the market/someone else at any time
  • Pro/Con: Max loss = what you pay for the put. This will change depending on the price you want the ability to sell the stock at and the date you want as a window in which to do this. Max gain: in theory again 2.16$ but realistically not

Here is an actual option for what you posted:

Buy a June 20th, 2025 PUT @2.00$ strike for 0.15(bid) - 0.25(ask)

Let's assume you have to pay the 0.25(asking price, what someone wants for this).

This means you will pay 25$ today for the ability to sell 100 shares of CTMX @ 2.00$. In order for this trade to become profitable(in layman's terms) the price of CTMX will need to drop to 1.75$ or lower by June 20th, 2025.

Will it do that? I don't know, that's the bet you want to make. This is "safer" than shorting because if you are wrong the absolute worst is you lost your 25$. Let's say the price drops to 1.50$, you would turn 25$ into 50$.

All of this is ignoring the more minutiae of how options work and how you can make money even if none of that happens, etc.

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While I know nothing about this ticker, these type of shit stocks do tend to drop and keep dropping. I also see that it has a potential listing violation, so your instincts are probably correct it's headed for gloom. With options you are not only betting on the direction it will go(down), but also how quickly or in what timeframe it will do it.

One thing to be aware of is that sometimes these shit stocks find a little trough they rest in due to the value of pure physical assets or IP or cash in hand, whatever. Not always, but in the above example it could drop to 1.80$ and linger there for months, causing your to lose even though you bet correctly that it would drop.


My final advice, while you may be correct unless you know what you are doing you'll pay a higher premium than you should and end up not making much money. I'd study up on options a bit before you try to make a quick buck on this. The spread on the June put isnt terrible but look at July, its .25 to 1.00, meaning everyone agrees with you it's going to drop and they are asking more for the trade because of it. Harder to scalp a few dollars there.

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Jysin said:

No idea what it is, but 13 trades is a completely insignificant pool of data.

You would need hundreds of trades over a much longer period of time. Pretty sure I could get a 100% win rate with some crazy P&L in just 13 trades.

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Sanrith Descartes said:

UNH has an IV of 78.

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• Like anything don’t trust it 100%, it’s more of an idea generator than gospel
• it has really good filters and specific stock idea generators. I find that if I filter too much looking for the perfect trade I obviously get zero hits, all trades have risk
• it is directly integrated with some platforms but not fidelity, so once I find an idea I then start research mode
• it’s great at showing how to lower risk on potential positions(usually in the form of a spread or butterfly) so instead of risking 50k for infinite I can risk 10-20k for maybe 50-80k(which you’ll never get infinite or maximum anyway outside of shit luck)

Rod-138 said:

I’m buying UNH. My coworker is kind of like my personal reverse Cramer index and she just announced healthcare is too scary right now.

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Sanrith Descartes said:

NVDA is up 60% from the bottom in 5 weeks.

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