It sounds like you are quite familiar with these products! So I assume you know that the Jan $50 can easily hit 4.50, then go to 0. My plan is to sell the whole enchilada at 4.50. That gives me proceeds of 135K on investment of 20K. Then, at that time SVXY will have fallen to 40 or lower, so I will buy 2018 or 2019 calls on SVXY. Rinse and repeat! It looks like a third consecutive green day for our good UVXY!
Today looking good, and we have 225 days to go. It's going to be a lovely year. I bought them for 20K, will sell for 135K proceeds. Lovely!
I'm not saying they will close in the money, just that they will hit 4. I only have 300 contracts so I am not that much of the open interest
Normally I could see someone saying it's pretty slim, because options pricing should be efficient, and that's almost 300% gain. However. IMO. There is 98% chance they hit 4, and only 2% chance they stall out and expire worthless before hitting 4. Let's see how it goes!
Then the initial investment of 20K is already more than recouped, as I collect 45K from selling 150 at 3. I assume I will collect the other 90K, so I still make almost 600%, but I am playing with house money early in the trade.
It almost seems too obvious- seriously, are we the only ones who can see how easy this is? UVXY up up up third day in a row tomorrow, it doesn't take much. $3 on those calls in a hurry!
Just to clarify, when you were talking about UVXY of 12.50 giving me a double, did you mean a double from my 68 cent purchase, or a double from 1.13 today? I could see 1.36, that makes sense, not sure about 2.26. We got the right time to buy UVXY!
Of course, I don't mean to downplay it, because 19.60 is a double, which is an incredible (and arguably unjustified) move in UVXY.
Wow! That seems ambitious! 12.50 on UVXY and the 50 calls at $2, we'll see if that happens next week. I am going "full balogna" and selling all 300 calls at 4.50. Boy, 19.60, crazy to think that's all it would take for $4.50 on the 50 calls. I like it though!
Once my 20K is worth $135K I ride off into the sunsets.
Almost 600% gain. Not "doubling". I am already up almost 70%.
I think 25, what do you think?
It don't matter, the January $50 calls are going to $4.50. Watch for it!