and I wouldn't change this system for the world.Submitted by moonyou22 t3_11dfyy3 in wallstreetbets
TetraMental t1_ja9ab0m wrote
Reply to comment by polarbearbreeze in and I wouldn't change this system for the world. by moonyou22
theta gang are people who look around at the people gambling on options here and realize that for every sucker buying a contract, somebody with some shares is on the other side selling them the contract.
Platypus_Legion t1_ja9kmzn wrote
It also works for puts, and you just need cash for that.
Kenobi3371 t1_ja9xlus wrote
If you're not on Robinhood you can do covered puts too
selipso t1_jaah3ul wrote
How does a covered put work? Do you sell the shares first and then buy them back later?
jonnyohman1 t1_jab1zbd wrote
called a cash-secured put. Selling a put means you'll have an obligation to buy those shares at the strike price if it expires and you get assigned. If you want to get fancy you can then take those shares you were assigned and sell covered calls on them. That's called the wheel.
CarbonHardened t1_jabt74p wrote
It's how thetagang rolls.
PlanesFlySideways t1_jabwpwc wrote
Heh
AnonymousLoner1 t1_jab5a9x wrote
He's talking about a short sale-covered put.
Just like long shares cover a short call, short shares cover a short put.
That's why you can't do it on Robinhood, since they don't allow short selling.
OTD303 t1_jabmqmh wrote
The fact they don’t allow That means they know the kind of power that is the retail trader Lmfaoo
needspantsu t1_jabtx7r wrote
I assume, given shorts have limitless* loss potential, and hood is aimed towards teens and low income peeps, it's a bad mix.
Kenobi3371 t1_jaah9z1 wrote
No, same as selling a regular put but you have shares instead of cash as collateral
The_Paniom t1_jab46in wrote
You can do cash-secured puts on Robinhood.
coinpile t1_jaapxcg wrote
You don’t even need cash, I sell puts on margin.
no_simpsons t1_jabjmx1 wrote
"with some shares"... I roll naked, dawg
SokarDaGreat t1_jabkvlj wrote
My greatest flaw in life is not being allowed to sell naked. Truly embarrassing.
BoofingFluoride t1_ja9op76 wrote
And then with enough time they realize that they're still the suckers crossing the bid-ask spread.
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