I was lost on how the current value went from 108.xx and you bought with a 10% call prediction (around $120) .. then 2 contacts, or X 2 = est $240 .. but when u paid it ended up approx $485 How did it double again? I got confused there. Thanks
Great question, we asked Davis to personally answer this one-check out his answer below! 🥳 "Hey there, good question! I can see how it is confusing, given the numbers involved. If you go back to the video, around 41 minutes in, you can follow along with this answer. The key issue is to separate the strike price of $120, in effect, the target price in this example, from the price of the option, which is about $240. In other words, the option with the $120 strike price costs $240 for each contract. Because I was buying 2 contracts, the total cost of the trade, the “premium,” is double that, or $480. The confusing factor is the fact that the strike price happened to be half of the price of the contract…I will try to use less confusing examples in the future!" -Davis ✍
I was lost on how the current value went from 108.xx and you bought with a 10% call prediction (around $120) .. then 2 contacts, or X 2 = est $240 .. but when u paid it ended up approx $485
How did it double again? I got confused there. Thanks
Great question, we asked Davis to personally answer this one-check out his answer below! 🥳
"Hey there, good question! I can see how it is confusing, given the numbers involved. If you go back to the video, around 41 minutes in, you can follow along with this answer.
The key issue is to separate the strike price of $120, in effect, the target price in this example, from the price of the option, which is about $240. In other words, the option with the $120 strike price costs $240 for each contract. Because I was buying 2 contracts, the total cost of the trade, the “premium,” is double that, or $480.
The confusing factor is the fact that the strike price happened to be half of the price of the contract…I will try to use less confusing examples in the future!"
-Davis ✍
I would enjoy more if she didn't interject.