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In Reply to: Re: how does that work? posted by WinthorpeIII on December 21, 2006 at 13:54:57:
... and I may not...
You have an option to sell at a certain price, lower than the current price because you think it will drop. Is that right? But if th stock doesn't fall, you don't sell, or do you then have to sell at the agreed price?
I don't see how the guy in the film lost all the money.
Why not just sell at the market price if you know the bomb goes off and the price falls? Selling above the fallen price appears to offer no advantage.
Or do I have the stick by the wrong end?
Follow Ups:
This is why also that the film loose Change was talking about because all the major airlines right before 9/11 had FAR higher than normal put options placed on all the airlines - someone obviously knew something. Then the planes go into the towers all the airline stocks got hammered and someone made a boat load of cash.In the Bond film this was supposed to be a prototype aircraft from a new company and of course if the plane were destroyed (as M noted) then the company would have went into bankruptcy and LeChiffre would have made huge money.
He was taking terrorist money and gambling essentially (but it is not gambling if you stack the deck in your favour - similar to insider information but in Casino Royale he was going to ensure his profit by destroying the plane and thus the company).
I suppose this plot requires the viewer to be fairly well versed in stock markets (though usually I just let it wash over me and ignore it in most of these films because it really isn;t that important -- suffice it to say that he lost the terrorist's money because of Bond and the terrorists will go after Le Chiffre so for the British gov't protection he'll give up the names of the terrorists. I mean as a movie goer this is the only part of the plot that really needs to be understood rather that trying to figure out if there is a hole in the semantics (which there isn't).
The other thing required of the viewer is a basic understanding of Texas Holdem. The movie is after all called Casino Royale so people should be warned that car playing is going to play a major role. Where the film has problems for some is that like most films they get a little too bogged down by the cards rather than the bluff man to man aspect (though for me this was here enough and I enjoy Texas Holdem and so the card playing is more than fine for me).
The problem with this Bond film is that if people loved the traditional cartoon Bond movies this one will be viewed as less of an "escapist entertainment" and more of a "realistic post 9/11" Bond. There is still a sense of the lighter touches but clearly this is a far darker film than any other Bond film with the inclusion of perhaps "On Her Majesty's Secret Service" and "Licence to Kill."
I agree with anyone who prefers a Moore or Connery film because of the dashing "style" of Connery and the "tongue in cheek" Moore films or the blending of those in Brosnan. Craig plays it strait up as a true killing machine -- which is too real perhaps for die hard fans.
I have liked at least one Bond film from every actor -- I think Casino Royale is the best because it is the best actual film for non Bond fans and one that will hold up better than any Brosnan film Most of the Bond films have one dimensional villain cartoons who are out for world domination and after Austin Powers have been lampooned to a laugh. CR is all too real, dark, and this Bond is not about one liners tongue in cheek movie moments.
I hope that next time out they add a bit more ambiance style and a little lighter touch -- but I hope they don't ever go back to the prior Bond films.
The investor has the money in the stock option. The option becomes worthless if it is "out of the money" on the expiration date. In other words if the stock has not moved to an advantageous point to the option holder. Of course, it would take some somewhat extreme conditions for the guy to lose all the money, but certainly possible. Normally the option price would devalue and the investor might sell it for what he could get.The investor does not own the stock -- he is trading the option, which may become worthless on the expiration date.
AMD at $20.95
If this were the price on the expiration date:
$20 call option worth .95, $15 call option worth $5.95
$20 put option worth 0.00 (who would want to sell a $20.95 stock at $20?), $15 put option worth nothing too. $30 put option worth $9.05.
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