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AAPL will be making me a half of a billion dollars on Jan. 21 2012.


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AAPL will be making me a half of a billion dollars on Jan. 21 2012.
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cosus
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2011-12-21, 10:28

So it all started as a mistake. Keep in mind that I have ADHD and take Adderall, a heavy coffee drinker and pack per day smoker, it's understandable to make a stimulant based mistake. I bought 75,000 contracts at $90 for $20. If AAPL hits over $400 next month, currently at $396.10 I'll reach my goal of being a millionaire by 35 7.5 years early (now to be a billionaire by 35 :P). Unfortunately I don't take pride in this transaction. I wanted to form my own company, my own hedge-fund… though I don't have a masters degree or affiliation with any financial company so it'll be difficult. The only pride I'm taking is rubbing my cousin's use in this considering he feels I'm a failure in life and had an easy life even considering my near death experience (motor vehicle accident, losing 16 pints of blood… doctors said I kept on making more blood and that's how I lost more blood than I had in my body), aforementioned ADHD, severe depression and Aspergers. I never did anything to the ass other than graduate high school early and never finished college.

So after cashing out, I'll buy each my friends a house or something for each and a car and office space and equipment for myself to start my new company which will be either my dream or more dangerous gray market trading. The rest I'm donating to the Bill & Melinda Gates Foundation as it's the most efficient charity out there. Yes, I'm bragging about this fluke, but I am not proud. I want my own company and to really work on a mutual fund or hedge-fund, a company that will outlive me, my baby. Hell, corporations have the same rights as another US citizen short of voting, but I'll just be forming an LLC.

My only issue withe the charity is that my cousin works for Microsoft and that connection pisses me off. I'm so rubbing this in his smug face and make him even more jealous than he is already. Strange, he thinks I'm a failure and he's jealous. :/

Thank you for listening… or reading. Not like blind people get insulted when you say "look over there!" In my experience they tend to be more insulted when treated differently.

/end bragging, ranting & anger.

Retired 8 years ahead of schedule.
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Brad
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2011-12-21, 11:30

cosus is the one percent! Get him!!
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torifile
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2011-12-21, 11:51

What does buying 75k contracts at $90 for $20 mean exactly? I know that's an options thing but I never understood it.

Oh, and congrats!
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AWR
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2011-12-21, 11:52

^^ (at Brad)

(Nice move - .5 billion? Holy kaschmoly. I guess you're on the cusp of finding out who your real friends are in addition to the much more enjoyable endeavors.)
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Eugene
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2011-12-21, 12:12

Wouldn't 75K options vested at $400 = $30M, aka well short of $0.5B?
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billybobsky
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2011-12-21, 13:35

Yeah... the numbers don't work out here...
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Eugene
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2011-12-21, 13:38

In other news I just inherited a South African gold mine and a LivingSocial coupon book for 5 Big Macs and 5 Large Fries.
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cosus
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2011-12-21, 13:57

One contract is 100 options. My investment includes a significant amount of margin as well. That makes a very small percentage in interest I’d have to pay too on top of the 2,000 for the initial investment.

I’ll be worse than the 1%, I’ll be the 1,000 people in the US as the top 1% and pay zero taxes. Even if I payed taxes, it’d be capital gain, between 10-15%, as much as the gas station attendant at the shell station that charges too much. Then again, in the continental United States we pay more for gasoline than anyone else and we don’t even get mandatory full serve like NJ or OR! Union 76 all the way man.

Retired 8 years ahead of schedule.

Last edited by cosus : 2011-12-21 at 14:11. Reason: Taxes & Margin
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billybobsky
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2011-12-21, 14:35

Wait. you're telling us that you made an accidental $3B bet?

How can you possibly cover that even a fraction of that (ie potential losses on your put)?

Let's also be serious here, with those 7.5M shares, the only way you walk away with 0.5B is if the stock is selling at $66 above your contract price...
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kieran
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2011-12-21, 14:37

I'm so confused by this.

If you don't mind, care to put down a little explanation of the math involved?
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Mugge
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2011-12-21, 14:40

I don't really know what to say about this, cosus. But do keep us posted on it!

Or better yet: ADHD + 500.000.000 USD + Twitter = epic lulz

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AWR
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2011-12-21, 14:41

This is getting more better.
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Wrao
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2011-12-21, 15:00

Seems more like RC material, no?
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alcimedes
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2011-12-21, 15:22

Give money to my work. We're trying to legalize pot. There is no better cause.
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cosus
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2011-12-21, 16:54

The farther an option is of from expiring, the cheaper the option. While I intend to hold the option for no more than a couple months, initially because it was so far off, the option’s value moved very little. Since I liked Apple on a fundamental and a psychological level, I let my date error slide, albeit, it inhibited most of my trading ability. Theoretically I’d have to have paid $150 million, however with margin I only had to pay $150 thousand. This was all back in 4th quarter 2008 when AAPL was valued at just above $90.

Retired 8 years ahead of schedule.
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cosus
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2011-12-21, 16:56

Quote:
Originally Posted by alcimedes View Post
Give money to my work. We're trying to legalize pot. There is no better cause.
As far as I know pot is legal. :P

And for that matter my pain regiment includes synthetic THC which I find more reliable.
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cosus
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2011-12-21, 17:00

Quote:
Originally Posted by billybobsky View Post
Wait. you're telling us that you made an accidental $3B bet?

How can you possibly cover that even a fraction of that (ie potential losses on your put)?

Let's also be serious here, with those 7.5M shares, the only way you walk away with 0.5B is if the stock is selling at $66 above your contract price...
I’m selling it over $300 the option price.
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billybobsky
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2011-12-21, 19:55

so... $2.5B of profit?

Why are your numbers so... wrong?

Also: Let's say this is true and the margin that your brokerage firm demanded was really 1/10th of 1% of the value of the options, you shouldn't buy your friends and family houses or whatever. That is foolish.

Last edited by billybobsky : 2011-12-21 at 20:12.
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709
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2011-12-21, 20:26

Take your meds, cosus.
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drewprops
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2011-12-21, 20:40

Remember: we'll be wanting a new Minecraft server.

And you'll have NEARLY enough to afford a modest version of my rPlank.
Call my people when you're ready.


...

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jdcfsu
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2011-12-21, 21:38

Glad to see I'm not the only one completely and utterly confused here.
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Robo
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2011-12-21, 21:42

When I'm an internet billionaire, I plan on telling none of you fools. I wouldn't want y'all to hate me just because I was beautiful, young, and rich.

I'm glad bobsky edited his post.

and i guess i've known it all along / the truth is, you have to be soft to be strong
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billybobsky
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2011-12-21, 21:56

Quote:
Originally Posted by torifile View Post
What does buying 75k contracts at $90 for $20 mean exactly? I know that's an options thing but I never understood it.

Oh, and congrats!
Ok. The way this *could* work is as follows:

cosus, in a drug fueled mania, accidentally buys 75,000 contracts at $20/share (100 shares each contract) to buy AAPL stock at $90 on Jan 21, 2012. Somehow or another his brokerage firm fronts him 99.9% of the money on that bet, making cosus only owe them $150K. In essence, for 0.1% of the money to purchase those contracts, cosus gets them using the shares, themselves as collateral. I don't know what brokerage firm would do that, but let's say they did. On Jan 21, 2012, cosus will 1) act on his contracts and 2) immediately liquidate every single share he now owns. This will put a huge amount of money into his hands -- he will owe the brokerage the $150M they covered his bet with, plus interest -- AND cause AAPL to drop significantly in value -- the average daily volume of AAPL is 17M shares, cosus himself will flood that volume with another 7.5M shares. Of course by announcing his intensions, I am sure all sorts of lovely things are about to happen.

Edit: It needs to be made clear that most brokerage firms will allow you to buy future contracts on margin from 5-15% (that is you pay them 5-15% of the contract cost, and maintain that value position until the contract expires or you get out). What cosus is claiming to have done here is find a brokerage firm that offers margins 50 fold better than the best ones, which, to say the least, is highly unlikely. These sorts of leverages (1:1000) are only even seen in currency markets.

Last edited by billybobsky : 2011-12-21 at 23:55.
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psmith2.0
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2011-12-21, 22:16

I should be a millionaire by the time I hit 728, so I just need to hang in there...eat right, exercise, etc.
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cosus
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2011-12-22, 04:27

Quote:
Originally Posted by billybobsky View Post
Ok. The way this *could* work is as follows:

cosus, in a drug fueled mania, accidentally buys 75,000 contracts at $20/share (100 shares each contract) to buy AAPL stock at $90 on Jan 21, 2012. Somehow or another his brokerage firm fronts him 99.9% of the money on that bet, making cosus only owe them $150K. In essence, for 0.1% of the money to purchase those contracts, cosus gets them using the shares, themselves as collateral. I don't know what brokerage firm would do that, but let's say they did. On Jan 21, 2012, cosus will 1) act on his contracts and 2) immediately liquidate every single share he now owns. This will put a huge amount of money into his hands -- he will owe the brokerage the $150M they covered his bet with, plus interest -- AND cause AAPL to drop significantly in value -- the average daily volume of AAPL is 17M shares, cosus himself will flood that volume with another 7.5M shares. Of course by announcing his intensions, I am sure all sorts of lovely things are about to happen.

Edit: It needs to be made clear that most brokerage firms will allow you to buy future contracts on margin from 5-15% (that is you pay them 5-15% of the contract cost, and maintain that value position until the contract expires or you get out). What cosus is claiming to have done here is find a brokerage firm that offers margins 50 fold better than the best ones, which, to say the least, is highly unlikely. These sorts of leverages (1:1000) are only even seen in currency markets.
I’m just using TDAmeritrade (specifically thinkorswim which provides bill margin and and high margin) and they are charging me nearly 0% interest. Margin at at such sa high amount isn’t hard depending on how many trades you make. The only reasons my numbers might be off is because I really just forgot went traveling around the world on my own dime and gambling, getting the risk out of my system. Effectively, I had to recalculate everything on my own when I found out my predicament.

Look at the volume and market ca-p ofAAPL, I doubt I make a dent. T any extent, if you don’t believe me, its nota big deal. I’v4e really just trying to calculate it for a few days. I only recalled the investment at most three days ago and I only got back into the USA for a month at most. While yes I’m bragging, but I’m mostly just venting against my ass of a cousin. Why i.e. to strangers anyway, is there a point? Noy like random folks provide an ego boost. Anyways often enough stocks do drop on OPTION days, just never ten AAPL do that.

Retired 8 years ahead of schedule.
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Robo
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2011-12-22, 04:32

I brag to random people on the Internet all the time. I actually have way less money than the unemployed college dropout I claim to be.
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AWR
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2011-12-22, 05:37

That seems to me more of a What Scotch Are You Drinking Now post, but I'm no expert.

Maybe we could use this as a springboard into a Merry Christmas/Holiday best wishes hybrid thread?

Today's my last day at work, returning on the Tuesday, January 3, 2012. Due to the way official holidays and weekends fall, I only need to take three days off for this eleven-day break. Driving to Spain with the family tomorrow at midday, train/flying back on January 1 for a solo week at home/work. My hope is that there is a ton of snow while I'm away and I can go for a mini-epic x-country ski adventure on the the 2nd. (Need to stay sober on the New Years Day, please god. )

Hope everyone has a nice break somewhere, sometime. Relax, even in the holiday/family maelstrom. And don't forget to call them options you forgot about!!

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torifile
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2011-12-22, 07:01

So, cosus, to prove your worth, you need to buy all of us a new, fully loaded, Mac or iOS device of our choice. If it's an iOS device, you pay for any cellular fees for the life of the device. Shouldn't even be a rounding error on your new found riches.

If it's not red and showing substantial musculature, you're wearing it wrong.
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cosus
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2011-12-22, 07:13

Quote:
Originally Posted by torifile View Post
So, cosus, to prove your worth, you need to buy all of us a new, fully loaded, Mac or iOS device of our choice. If it's an iOS device, you pay for any cellular fees for the life of the device. Shouldn't even be a rounding error on your new found riches.
FFS! You or AIDS! But really, my insomnia is getting bd and alcohol has ceased to work.
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psmith2.0
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2011-12-22, 07:27

I'll take a black 32GB iPad (wifi-only). I'm not demanding or hard-to-please (would never fill up 64GB and don't need 3G), so I can make it easy on you. Thanks!

Or we can just wait until next year and get me a top-of-the-line (64GB?) next-gen iPhone and we'll call it done. I'll even foot the monthly bill (don't listen to torifile).
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