TL;DR
A Reddit user claims a 3,000% gain on call options, raising skepticism among others. While the user’s story is unsubstantiated, it highlights the dangers of chasing quick riches in volatile markets.
Story
Overnight Riches? Or Overnight Disaster? The image boasts a 3,000% gain on call options, turning $500 into $18,000. Sounds too good to be true? It probably is. Let’s unpack why this ‘miracle’ trade is more likely a mirage.
How It (Supposedly) Happened: The user claims to have bought 60 call option contracts* with a strike price* of $545, expiring the next day. These contracts allegedly cost $9 each. When the underlying asset’s price soared past $545, the contracts’ value skyrocketed, selling for $307 each. Boom—massive profit.
‣ Call Option: A bet that an asset’s price will go up. ‣ Strike Price: The target price for the asset.
Why It Stinks of Manipulation: Several red flags scream caution. First, the sheer scale of the gain is improbable. Markets rarely offer such quick, exponential returns without significant risk or insider information. Second, the image lacks crucial details: timestamps, brokerage statements, trade confirmations. This missing proof allows for fabrication.
The Human Impact (Potential): Imagine thousands piling into similar trades, chasing this ‘get-rich-quick’ illusion. When the market inevitably corrects, most will lose their shirts. This isn’t investing—it’s gambling, fueled by social media hype. Think back to the dot-com bubble or the 2008 crash: Herd mentality often leads to financial ruin.
Lessons to Protect Yourself: Don’t fall for ’too good to be true’ narratives. Verify claims with concrete evidence. Avoid options trading without thorough understanding. Options are complex instruments that can magnify losses as quickly as gains.
Conclusion: Treat this ‘success story’ with extreme skepticism. It’s more likely a misleading snapshot than a sustainable investment strategy. In finance, if something sounds like a fairy tale, it usually is. Stay informed, stay skeptical, stay safe.
Advice
Don’t trade options without understanding them. Verify social media claims—‘screenshots’ can be faked. If it sounds too good to be true, it probably is.
Source
https://www.reddit.com/r/wallstreetbets/comments/1k60455/500_to_18k_overnight_3000_gain/