TL;DR

One Redditor claims to have made 20x their money on CVNA options, a high-risk, high-reward bet. But for every winner in this game, there are many losers.

Story

Carvana’s stock (CVNA) has been a rollercoaster. One Redditor claims to have turned $10,000 into $200,000 trading CVNA, primarily through options. This sounds like a dream, but it’s crucial to understand the risks involved before jumping in.

How It (Maybe) Happened: Options trading is like betting on the future price of a stock. This user likely bet CVNA would go up, and for a while, it did. They used “calls,” which give you the right to buy a stock at a set price, and made big returns when the price climbed higher. However, they admit to owning only a “put” now, which gives the right to sell at a certain price, suggesting anticipation of a fall. This reveals how quickly fortunes can change.‣ Options: Contracts giving the right (not obligation) to buy or sell an asset.

Impact (The Other Side): While someone boasts big gains, others almost certainly lost. The comments reveal a mix of envy (“Congrats and FU”) and regret (“I’d have $5.6m right now…”). This highlights the zero-sum game aspect of short-term trading: someone’s gain is often another’s loss. ‣ Zero-Sum Game: A situation where one person’s gain is exactly balanced by another’s loss.

Lessons (From History’s Graveyard): Remember the dot-com bubble? Or the 2008 housing crash? Speculative frenzies rarely end well. Don’t be fooled by short-term gains. The market can turn on a dime, especially with volatile assets like options. ‣ Volatility: How much an asset’s price fluctuates.

Conclusion: This story isn’t about financial wizardry; it’s about gambling and luck. While tempting to chase quick riches, focus on building long-term wealth through proven strategies. This Redditor’s gamble could easily go south, leaving them with nothing but a story of what might have been.

Advice

Don’t mistake gambling for investing. Understand the risks before you play with fire (or options).

Source

https://www.reddit.com/r/wallstreetbets/comments/1isebmi/sold_it_all/