Considering Trying Options

My First Winning Options Play: A Real-World Example from the GLP-1 Boom (And Why I Started with Established Names)

Options trading can feel intimidating—especially as a beginner. The potential for big wins comes with equally big risks, including losing your entire investment in a single trade. But with the right education, thesis, and risk management, it can be a powerful way to participate in market trends.

In a recent chat with Grok, I explored rotating out of pure momentum micro-caps into more established players in the health/tech/bio space, like GLP-1 leaders (Eli Lilly - LLY, Novo Nordisk - NVO) or Palantir ecosystem partners. The discussion included a step-by-step walkthrough of my hypothetical "first winning" options play: a bullish call on Eli Lilly during the 2023 GLP-1 surge.

The Theme: GLP-1 Drugs and the Obesity Treatment Revolution

In early 2023, GLP-1 receptor agonists like tirzepatide (Zepbound/Mounjaro from Eli Lilly) were exploding in popularity for diabetes and weight loss. The sector promised massive growth—the global market has since ballooned, with projections estimating continued strong expansion through the 2030s despite some adjustments in forecasts.

Eli Lilly's stock reflected this hype, surging from around $330 in January 2023 to over $590 by late 2023 (and much higher in the years since—currently trading well above $900+ in early 2026).

This created a classic bullish setup: strong fundamentals, positive news flow (trial data, approvals), and sector momentum.

The Trade: A Simple Long Call Option

Strategy: Buy a call option (right to buy the stock at a set strike price before expiration). This gives leveraged upside if the stock rises, with limited downside (you only lose the premium paid).

Hypothetical setup in early 2023:

• Stock price: ~$330
• Expiration: June 2023 (~6 months out)
• Strike: $350 (slightly out-of-the-money for cheaper entry)
• Premium paid: ~$10 per share → $1,000 total for 1 contract (controls 100 shares)

Breakeven: $360 ($350 strike + $10 premium)

Why this worked: LLY climbed steadily on GLP-1 catalysts. By expiration, the stock was well above $400–450 in reality, turning the option deeply in-the-money.

Outcome (hypothetical based on history): Sold the call for significant profit—potentially 400–900% return on the premium in months.

Long Call Payoff Diagram

Profit kicks in above breakeven; max loss is the premium if the stock stays flat or drops.

Step-by-Step Walkthrough

1. Research the Thesis — Strong GLP-1 demand, positive pipeline news.
2. Choose Strategy — Bullish long call for leverage.
3. Select Expiration & Strike — 6 months out, slightly OTM.
4. Calculate Costs/Breakeven — Premium = max loss; breakeven = strike + premium.
5. Execute & Monitor — Place via broker; watch catalysts.
6. Exit — Sell to lock profits before expiration (avoid theta decay).

Key Lessons for Beginners

• Start small (1 contract, paper trade first).
• Focus on liquid names like LLY (tight spreads, high volume).
• Have a clear thesis tied to fundamentals/news.
• Use only risk capital—options can go to zero.
• Exit winners; don't get greedy.

This play "won" because the thesis aligned with a real megatrend. Not every trade does—most beginners lose money initially.

Important Disclaimers

• This is NOT financial advice. I'm not a licensed advisor.
• Past performance (even historical examples) doesn't guarantee future results.
• Options trading involves substantial risk of loss and is not suitable for all investors. You can lose more than your initial investment in some strategies.
• Always do your own research, use a reputable broker, and consider consulting a financial professional.
• The example is educational/hypothetical based on 2023 events; real pricing, IV, and outcomes vary. Current LLY is much higher, with different option premiums.

For the complete back-and-forth discussion—including shifts to Palantir partners, other GLP-1 plays, and more sector ideas—check out the full Grok conversation here: https://grok.com/share/c2hhcmQtMw_4a01ebd0-cf0d-451c-ba09-b730c45b5a45

Have you tried options yet? What was your first experience like? Share below (but no specific trade advice, please—keep it educational!).

Happy (and safe) trading! 🚀