Hacker News Reader

Comment by flerchin | Hacker News Reader

They're up more than double YoY as of right now. Down ~30% from peak mostly due to the events today. It's not clear to me if the OP on this is "in the money". I don't fully grok options trading.

She says: > My Position:

    CRWD $185 Put, 11/21/25 expiration date,.
    5 contracts @ $7.30, up 16.85% since 06/11/24

View on HN

This basically means the person has a guaranteed buyer who has to buy a set number of shares of CrowdStrike at $185 per share. If the price drops below that, say to $100, this person can buy a share at market value and immediately execute the contract making the person buy it at $185.

In the meantime, as the share price drops the contract's value itself usually goes up. They can sell the contract itself without having to touch shares and still make a profit.

The position doesn't have to be "in the money" to be profitable. At present, the underlying (that is $CRWD, not the puts themselves) is trading around $305 per share, so these puts with the strike price all the way down to $185 are still far, far off from being ITM. But, options are largely a bet on volatility. While the extreme price drop between when this user opened the trade and this morning has already made this trade quite profitable, it could still lose money if the trader holds on to it; IANAFA, but selling and taking profits on this rare event would most likely be in their interests, even if they continue to believe the underlying security will go all the way down to $185 by November.

Those same contracts are currently trading at $13.65, so close to doubled since yesterday.

If they sold right now, ~$7000 on ~$3500 invested; not bad.

they should have stuck with the SEC whistleblower bounty program

Theyd make way more than that DOOM LEAP they bought, but its worth $13 at time of writing, so 100%

people trading the 0DTE made 18,700% though

just save this comment for when you understand it

No, they are not ITM until CRWD hits $180/sh.

$185 puts that cost $7.30 mean they are considered ITM if CRWD drops below $184.27, assuming there's no cost to trade and the $7.30 refers to a single options contract (worth 100 shares). There is likely some (or a lot) extrensic value still remaining in the puts given the far away expiry date. The extrensic value is what makes them valuable.

Yes that was a typo. I meant 185.

Regardless, all of this is just intellectual play considering the Reddit poster has no desire to exercise their options.

Reply on news.ycombinator.com