$90,000 profits in a day or even in the span of a few minutes happen for large hedge funds and investment groups all the time, because they are using such a large amount of capital, but rarely do we see a return of 7,000% +.
With just about an hour to go left in trading yesterday Dense-balance-6041 spent a measly $2,300 on 120 same-day call options on Netflix with a strike price of $520 when it was trading around $515.
Only minutes later the price jumps to $533 and our reddit user cashes out big.
This is either one of the luckiest, well-timed trades of all time or the user acted on inside information.
When asked about his decision making process this is what he had to say:
- Question: “Ok so you sold it but who would buy that?? Like why would someone buy that in the last hour of trading after it’s gone up?”
- Dense-balance-6041: “People who sold to open calls need to buy to close the calls to cover their trade. Some people had to buy It back but with about an hour left and a big name company there are always buyers. Even until the last minute”.
- Question by different user: “So what you’re saying is you did know before but you weren’t sure if it was going up or down?”
- Dense-balance-6041: “I did not know. I was also in tsla same day contracts. Traded nvda and amzn same days throughout the day. Every Friday I trade same days risking a portion of that weeks profits”.
Whether or not this user acted on inside information is not yet certain, but no matter what this was still a risky play as the news could have shifted the price of the stock sharply up or down.
In that case they could have used a straddle strategy where they purchased puts against NFLX at the exact same time, ensuring profits as long as a massive price bump does occur.