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People making so much money with stock options

1 points by paulpauper ↗ HN
On Reddit's WallStreetBets people making so much with options, turning a few hundred or thousand into thousands of hundreds of thousands. Anyone else feel like they are missing out, or is this just one giant cautionary tale of survivorship bias?

Even in 2021 it was not this much, and only limited to maybe 2-3 stocks, those being GME and AMC. Ai dialed it up to 11. I have never seen anything like this. The mere mention of "AI" can send a stock up 20-100+% in a day. A small earnings beat can do the same too. I made a lot, but it seems like I can always do better.

6 comments

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allears
The problem with options is they're highly leveraged, which means that if the stock moves the wrong way you can lose your shirt. Not just the money you invested, but you can be on the hook for much more than that.
paulpauper
these are out of money cash secured options. no way to be in debt
colesantiago
You're not missing out, this is just gambling, most people lose their money trading, easy money easy to lose, you can safely ignore them.
newprint
Personal perspective: I took the money I've save toward home and put them into stocks (large semiconductors), made 35% of realized gains and had 89%/11% gain/loss in 3 months. It is absolutely exhausting and nerve racking experience. One day you wake up and see that your account dropped by -$15k, because feds posted numbers that market didn't like. Traded only stocks, using very conservative margin, kept gains in stocks. Getting a large sum in few months had the opposite effect on me of what I was expecting: I became more irritated and depressed.

What you see on wallstreetbets are survivors/extremely lucky individuals. Even those who posted large gains, often digging themselves from previous large losses. It is a gamble.

WheelsAtLarge
Keep in mind that the posts are from people who have made a profit. The ones who lose their shirt are less likely to post anything. It's very easy to lose. Most people will let their losses run and cut short their winnings so there will be an imbalance that ultimately leads to big losses. Also, it's very easy to have the market turn from a bull market to a bear market but you as a trader not change your strategy which will lead to losses.

Ultimately options trading is gambling. True some people can be winners but it's a very small group. Even some of those traders who are posting winnings will end up losing it all in the longer term.