I am probably not thinking straight after reading this article and
need some one to explain this seventeen thousand percent gain!!!
Does this mean that if i had bought these call options for 10 cents a
contract..say for a total of $100 yesterday. I would be looking at a
profit of $17,000?
Is this possible?

http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=G...

i didnt open the link but you must be reading them right, goog apr 520
call was around $.15 yesterday, i.e. one contract for FIFTEEN
DOLLARS , you can sell that right now for over TWO THOUSAND DOLLARS,
with that ratio, one hundred dollars investment (read it gamble) would
have fetched u $14K :)

awesome isnt it...

That's the power of derivatives and options trading. I'm not surprised
at all.

Yes and yes.

Yes.  The gain assumes you trade in (purchase) and out (sell) of the
referenced options contract.  Purchase price was $0.10.  High was
$17.63.  Theoretical gain was $17.53 or 17,530%.

I didn't check your math, but your logic is correct. Make's you wanna
quit your day job, huh?

Is there a limit as to how many contracts an individual investor may
purchase at any given time?

unbelievable....
yes with $100 i could have quit my day job...but if i had made soo
much..what about the other guy who had to cover this..i am assuming
this kind of trading is a zero sum game...somebody had to lose their
shirt, pants and hair right?

Nope, the person who wrote the options probably owned the stock too so
they made money from the rise in the stock price but if somebody wrote
naked calls... then theyre pretty much screwed.

You have to have a huge account to right naked calls or puts.

So the person most likely owned the stock and when he wrote the call
was selling it and getting the extra 15 bucks for the call he wrote.

To him it was a small small gain but a gain non the less.

To the gambler who bought it he made the difference in price from .10
cents (10 bucks cus that is really 100 shares per contract) and the
17.50 x 100 = $1750

Welcome to the world of options trading.
Once you understand its basics you will most likely spend a great deal
of time in this market vs buying and selling the actual stocks.

$10000 into $1000000 happened many many times today.
Also 10k into 0 happened a tons as well lol

You don't need a huge account. My brokerage firm lets me deal with
naked puts and calls.

The reason why you could have had such a huge return is because those
options have essentially no time value left (they expire tomorrow) 0
intrinsic value (they were expected to expire worthless). The only
thing they had was .10 implied volatility. However, nobody could have
forecasted GOOG would have popped 20% today.

For the most part, I don't suspect people lost their shirt on this,
just whoever was at the opposite end of those calls missed out on the
20% move that their stock had today. However they were recouped with
the $10 premium they got per contract hahaha. Typically when you write
covered calls, I buy them back before earnings if I'm hoping to get in
on the price movement.

you could write naked calls all day; no need of huge account. u should
comment ONLY if you know so

pb4pmin... a couple of place I checked with wouldn't let me write
naked options.  I didn't ask what it takes to do that, but I suspect
that you need to have lots of money in your account.  Either way,
Inashad was at least half right in that most normal people probably
can't write naked options.

I am going to quit my job too, do it is the person sitting next to me,
eventually half world is, and we might need to go and get aliens to
work, cause all of us will be making money on the market. The problem
is, if we don't find any aliens to work for us, then what will the
money be worth, when there is nothing to buy...

What have we become...lol

SMOKED!!!

i bot 100 way otm apr 500 calls for .75 and sold them at 45.52!
basically i risked $7.5k of my roth ira and turned it into a cool,
untaxed $455k. huge speculation but made SIZE. any sane person
would've hedged w/ short stock b/c of such large deltas, but i took a
gamble. i wouldn't recommend this unless you feel like playing with
some casino-like bets. if you really thought goog would move, you
could've bought $25 atm straddles and made a hefty profit.

why are your proceeds untaxed?

I didn't know I could trade options in an IRA

because his account is a Roth IRA. He won't be taxed, but he needs to
wait until 59½ years of age to take it out. However, he can take out
upto his contribution at any time without being taxed.

You can, but you're limited to option strategies that don't require
margin. Basically that includes covered call writing, and buying calls
and puts. Spreads and other complex strategies that require margin
cannot be done in a retirement account.

You don't need a huge account, you just need approval for a certain
level of options trading. I don't write naked options, but I will
often "leg out" of a spread, leaving me with a naked put or call. It
only requires a margin account, and there are certain margin
requirements. If the stock moves against you, then you may get a
margin call, but you don't need a large amount of money.

No, not necessarily. They could have been written as part of a multi-
leg option strategy (bear call spread), whereby the lower strike call
was sold, and a higher strike call was bought as insurance. In this
way your risk is limited to the spread (but of course you would still
lose money).

Great! Thank you for the info.

many people will say it's stupid to trade options in a roth ira b/c of
the large risk associated with naked positions (remember, options
traders hedge positions thereby making trades based on volatility, or
chance of movement, of the underlying... and not on direction).
however, as a 23 yr old i think it's very smart to make trades w/ high
potential profit within an account with tax advantages. keep risk vs
reward in mind when doing these trades. if it works out, you won't
ever be taxed on the gains, assuming you can wait until you're 59.5yrs
old. compounded returns over 37+ years is beautiful.

Jesus christ....100$ into 17,000 ?!?! Damn I need to find out how
options work, I was happy with my 120% increase with ABPi 2 days ago,
but this is just insane !!!

So basically you had to buy 1000 contracts ( at .10 per contract  + w/
e the fee is you online broker charges per contract)  and then resell
them at 17.53 ?

Sorrry for sounding like a newbie, thats what I am, I just got into
stock less than a month ago so I'm very young ( only 21) and new to
this.

The odds of doing it again are like hitting a jackpot.Yesterday was
the biggest price increase in google history.