ITT: My habits after a few years of trading

>>1743570
>buy cheap options contracts for things people think will never happen
>when they do happen collect exercise the contract and earn huge profits.

>>1743580
Explain?

>>1743584
The current share price of wells fargo is $54

Lets say that I buy a call contract on well's fargo stock with a strike price of $54

Any time in the next six months I can exercise my option to buy 100 shares at $50 regardless of the current market price of Well's Fargo stock.

Then the share price goes up to $120

I can exercise my option buy the shares at $50 and then sell them for $120

Whats even better is markets tend to price options very cheap on things they believe will never happen. So an option like that would be likely to be sold for pennies on the dollar. Such as 0.11 per share

>>1743580
>post a strategy that is straight out of an options textbook
>appear smart on /biz/

>>1743612
>Whats even better is markets tend to price options very cheap on things they believe will never happen

I believe you are wrong there. The value of these "long shot" options have risen drastically over the last few years. As Lewis writes in the Big Short, some of those bets wouldn't have been possible today as they would have been prohibitively expensive.