DOCU put option
$150 strike 1,525x return
From 12/1/2021 – 12/3/2021*
DOCU call option
$245 strike 99.8% loss
From 12/1/2021 – 12/3/2021*
Here is a closer look into how one DOCU contract turned $500 $762,500 in 2 DAYS, while another DOCU contract turned $500 into $1.
DocuSign, Inc (DOCU) Option Contract
1,525x return in 2 DAYS
From 12/1/2021 – 12/3/2021*
Contract Details:
• Underlying Stock: DOCU
• Call or Put: Put
• Expiration Date: December 3, 2021
• Strike Price: $150
How This Positive Return Occurred
DOCU’s underlying stock price decreased from roughly $230 to about $135 between 12/1/2021 – 12/3/2021.
When buying a Put Contract, you believe that the underlying stock price will decrease below the Strike Price of the contact.
In this case, DOCU’s stock price decreased below the $150 Strike Price on 12/3/2021.
On December 1, 2021, DOCU’s Put Contract at the $150 strike price last sold for 1 cent (.01). See below for details.
|
Exp |
Strike |
Bid |
Ask |
Last |
|
3 DEC 21 |
150 |
0 |
.05 |
.01 |
On December 3, 2021, DOCU’s Put Contact at the $150 strike price last sold for $15.25. The contract’s price increased because DOCU’s underlying stock price fell below the $150 Strike Price on this day.
|
Exp |
Strike |
Bid |
Ask |
Last |
|
3 DEC 21 |
150 |
14.20 |
15.95 |
15.25 |
To paint you a picture, if you invest $500 on this Put Contract on 12/1/2021, your return could’ve been over $762,000 on 12/3/2021.
The Math:
15.25/.01 = 1,525x return
$500 x 1,525 = $762,500
DocuSign, Inc (DOCU) Option Contract
99.8% loss in 2 DAYS
From 12/1/2021 – 12/3/2021*
Contract Details:
• Underlying Stock: DOCU
• Call or Put: Call
• Expiration Date: December 3, 2021
• Strike Price: $245
How This Loss Occurred
DOCU’s stock price decreased from roughly $230 to about $135 between 12/1/2021 – 12/3/2021.
When buying a Call Contract, you believe that the underlying stock price will reach the Strike Price of the contact. In this case, DOCU’s stock price decreased down to roughly $135 on 12/3/2021. Since the investment was that DOCU’s stock price would increase to $245, the contract lost 99.8% of its value.
On December 1, 2021, DOCU’s Call Contract at the $245 strike price last sold for $5.
|
Last |
Mark |
Bid |
Ask |
Exp |
Strike |
| 3 DEC 21 (0) 100 (Weeklys) | |||||
|
5.00 |
5.025 |
4.80 |
5.25 |
3 Dec 21 |
245 |
On December 3, 2021, DOCU’s Call Contact at the $245 strike price last sold for $.01. The contract’s price decreased because DOCU’s underlying stock price decreased. The bet was that the stock price would increase to $245.
|
Last |
Mark |
Bid |
Ask |
Exp |
Strike |
| 3 DEC 21 (0) 100 (Weeklys) | |||||
|
.01 |
.005 |
0 |
.01 |
3 Dec 21 |
245 |
The Math:
5.00 – .01 = 4.99
4.99/5.00 = 99.8% loss
$500 x .998 = $499
$500 – $499 = $1
As you can see above, options can move quite a bit! We hope this helped you get a sense of the opportunities versus risks that lie in the market. If you’re looking to become an informed options trader/investor, we have free education to help you get there.
Important information
Any examples or illustrations provided are hypothetical in nature and do not reflect results actually achieved and do not account for fees, expenses, or other important considerations. These types of examples are provided to illustrate mathematical principles and not meant to predict or project the performance of a specific investment or investment strategy. Accordingly, this information should not be relied upon when making an investment decision.
Options trading is not suitable for all investors. Your TradeStation Securities’ account application to trade options will be considered and approved or disapproved based on all relevant factors, including your trading experience. See Characteristics and Risks of Standardized Options. Visit TradeStation.com/Pricing for full details on the costs and fees associated with options.
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