Many individual investors — many of them, followers of a popular, juvenile, foul-mouthed Reddit page called Wall Street Bets have gambled their savings for the chance of massively beating the stock market. One reddit user, u/Professsssssssor gambled about $2500 into Oracle call options expiring on December 10th. (Source found here.)
Oracle has been a steady performer for the past few months, fluctuating between $85 per share and $100 per share. However, in the past few weeks, Oracle steadily declined from its all time highs of $100 down to around $88 per share. On December 9th, Oracle's price ended the day at $88.77.
However, Oracle's earnings was after hours on December 9th, and many investors gambled that Oracle would have a strong performance on earnings. And as hoped, Oracles earnings and revenue were better than expected, beating earnings expectations by 8% and revenue expectations by 1%. This was the catalyst that many investors hoped to see!
In contrast to buying shares of Tesla, buying call options means that the user has bet that Tesla prices will massively move and would definitely be higher than a certain out-of-the-money price by a given expiration date. (This is a lot of conditions to check off.) You can learn more about options on Investopedia.
The benefit is that the potential gains are unlimited; however, the downside is that the entire investment can potentially be lost if the conditions are not met by the expiration date. This Reddit user bought about $2500 of Oracle options, betting that Oracle would be higher than $97 the next day given that it was $88 on Decmber 9th.
As hoped, not only did Oracle surpass $97 on December 10th, but Oracle reached an all time high of $106 and ended the day at $102. This Reddit user had a return on investment of 3000% by turning their $2,500 into $76,000! Congrats to this user for their victory. And as quoted
$ORCL daddy is back in business
Just as a reminder, invest with what you can lose. And none of what I provide is financial advice.
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