Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 9
Last December I bought deep in-the-money calls:

January 2020, 135 strike price. I paid $28.15/share for 6 contracts.

I sold one earlier this year, and have 5 left. My cost: 28.15 × 5 × 100 = $14,075

Current bid price: $130.37

If I were to sell them now, I'd get $65,185. (And I'd have to pay short-term capital gains tax.)

If I did my math right, that's a return on investment of 363.13%

I cannot credit my personal genius for this this (paper) windfall, because while I expected it to go up, I was expecting something more like 15% or 20%.

Now, if the share price can just stay high until December 27, I can sell it and pay the lower long-term capital gains tax. (And if I can wait until January 2, I won't have to pay that tax for 15 months!)

In 2008 I lost $20,000 on options, so I don't always pick winners.

If you're wondering why I bought contracts that were deep in the money, it's because I'm risk-averse (read: chicken).
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.