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Playing & Trading Strategy

The difference is this...

Posted by: accountant_4_Jesus (a.k.a ) on Jun 01, 05:09 in response to nash151's post Difference between a Call option and an OW Warrant ?????

The Call has a strike price. If the movie makes less than 40M, then it cashes out at 0, and you only lose $2/option. If you invest in the OW, it doesn't have a strike price. Whatever the movie makes during the weekend is the $ amount that the OW cashes out at. Therefore, if you buy it and SUPR8 only makes 20M, you lose $20/option. If you're confident of how much you think that the movie will gross, investing in all of the related options in the right way (eg. buy the call, buy the OW and short the put) would get you the most money, but how you play the options depends on the movie. It's a case-by-case basis.





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