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authorlxf <sng@luxagraf.net>2024-09-21 16:28:35 -0500
committerlxf <sng@luxagraf.net>2024-09-21 16:28:35 -0500
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+Can you check my math?
+Buy $114 calls at $1.15 with delta 0.50
+25% stop on calls is $0.87 (1.15 x 0.25 = 0.28 and 1.15 - 0.28 = 0.87)
+
+--correct
+
+Stop on stock price $112.26 (.87/delta 0.50 = $1.74 move in price, therefore 114 - 1.74 = 112.26)
+25% profit on calls $1.43 (1.15 + 0.28)
+25% profit for stock price $116.86 (1.43/delta 0.50 = 2.86 move in stock price, therefore 114 + 2.86 = $116.86)
+
+--So the stop on the option is .28 cents lower. A delta of .50 means that for every $1.00 the stock moves, the option will move .50 cents. So, if we only want the option to move .28 cents, then that would mean a .56 cent move in the stock price. .28 / .50 = .56 so, the stop on the stock would be ~113.44
+
+--Profit of 25% is ~.28 cents higher on the option, so .28 / .50 = .56 so the target for the first sale would be ~$114.5
+
+6.10 x .25 = 1.54
+6.10 - 1.54 = 4.56
+
+1.54 / .5
+
+calc 2.81*.25
+calc 2.81-70 = 2.11
+
+calc 2.11/.45
+
+calc 71.76-4.68