Reddit User Loses $60,000+ in 1 Day From Tesla Options

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/calikoosh gambled $60,000 into Tesla call options expiring on December 10th.

Tesla has been a strong performer for the past few months, and has definitely shown strong upward swings in the past month from prices of $800 to $1250 per share. This is a 50%+ move in only one month from October to November. Tesla did well on its previous earnings (10/20) by surpassing earnings expectations by 15%.

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 all $60,000 can be lost if the conditions are not met by the expiration date. This Reddit user bought Tesla options one day before expiration date of 12/10. Unfortunatley, Tesla did not make a huge this Reddit user has lost 100% of this investment or $60,000 within a single day as Tesla did not break out.

Just as a reminder, invest with what you can lose. And none of what I provide is financial advice.

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