Board 8 > Stock Topic 26

(+) Yeah! (+)

Unless I am reading this or doing something wrong, looks like I can buy back right now for less than what I got in premium? Far less than the $5600 figure.

Very true. But a variable here is Im doing weekly puts, not anything farther out. That gives me the ability to change the strike price accordingly far more often

Im not trying to be combative with you guys and I appreciate that we look out for one another here.

Sunroof posted...

Unless I am reading this or doing something wrong, looks like I can buy back right now for less than what I got in premium? Far less than the $5600 figure.

Because the stock went up. If it went down you'd have to pay more. It went up, so you can close the position for a profit. Stocks can go both down and up.

The point at where you'd have to pay $5,600 to buy it back looks to be a little above $178, and that's assuming no time value for the puts at all. If you're doing it before late on the last day, that point would actually be higher.

If you had done this 2 weeks ago with VIAC (and CBS is a pretty "safe" company) you'd in a hole that it would take years to climb out of with this strategy, if ever.

Also, I am not saying that this strategy will return you 11.7% on average. That was done with very rough assumptions that I believe are quite generous to this strategy.

But like, this risk profile wouldn't be bad if it was diversified among 3 or 4 companies.... it is less risky (with less upside) than owning the stock, after all.

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Yes, I will definitely diversify after 4/9 as mentioned a few times before. Just gotta pick some good ones.

Bought 6 $85 VIACA calls

See you when I've made 20k from them.

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Doesnt that mean you need them to hit $85 in order to make money?

Yes. Throwing those long balls.

Only cost me $400

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Whats your expiry date?

5/21

I mean who knows if it does anything but whatever. I think Viacom is super oversold right now. Kinda playing the DISCA move but there's also earnings that can move it.

Gambling is okay as long as you put really small amounts in.

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What are some high dollar ($100+) non-volatile stocks? I dont want to get screwed too hard by my platforms $1/contact commission fee.

BRK.B

If you use Geico and you own shares you can also get a discount on your car insurance.

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Nice pick.

I actually used to investigate insurance fraud before switching jobs for the government. I didnt work for Geico, but I had them as my carrier. One day I got into a car accident and ironically Geicos claims rep sent my claim to the fraud department. Everything ended up being fine and they paid my claim, but it left such a bad taste in my mouth that I refused to ever use them as my carrier again.

But I have no problem using them to make me money!

Personal recommendations for high value safe puts

AAPL
AMD
BA
BABA
BRK.B
DIS
PYPL
SBUX
SONY
TM (only has monthlies)

Some are more safe than others but if I had your funds this is the wheel ring I'd be running.

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Awesome! Ill check them out.

Might be common knowledge but I read that most day traders do not hold positions over a weekend. They close all positions on the last trading day of the week, typically Friday, except for holidays like this week where the market is closed on Friday.

Reason is, stupid unforeseen stuff can happen over a weekend that will affect stock prices. So, from a traders point of view, having maximum flexibility (cash) is best at market open on Monday.

This is another reason to start your calls and puts on Monday rather than Friday.

Sunroof posted...

Might be common knowledge but I read that most day traders do not hold positions over a weekend. They close all positions on the last trading day of the week, typically Friday, except for holidays like this week where the market is closed on Friday.

Reason is, stupid unforeseen stuff can happen over a weekend that will affect stock prices. So, from a traders point of view, having maximum flexibility (cash) is best at market open on Monday.

This is another reason to start your calls and puts on Monday rather than Friday.

This is a reason you DO want to hold over the weekend. Those people are going to be paying a premium for the lowered risk they get from not holding over the weekend. This is one of the reasons the vast majority of day traders lose money.

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ETH chilling out around $2k, good sign. I'm thinking 2200 in the cards for the near future.

market closed today so enjoy your weekends

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Yeah, I loaded up on more ETH, it's poised for a breakout after lagging behind all the others.

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After organizing and sifting through a bunch of stocks, here are the ones that made my final cut:

F
CAT
GS
MS
JPM
LVS
WYNN
SBUX
DIS

These are tailor-picked for selling puts on one week out. Im going to pick three or four each week, depending on how theyve been performing.

The variables I looked at to arrive at these stocks were premium return, one week performance, one month performance, and one year performance.

The top performers as of today are:

F
GS
JPM
LVS vs WYNN
DIS

Wow, +916k jobs in March for the US. That's an impressive number.

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Too bad the market wasnt open today.

How tf is there a $3,000 offering for the Ford $12 put option?! Thats insanely generous, it hasnt closed under $12 since March 1. I might have to sell my Disney put on Monday to get in on this.

Please explain your math and how many contracts (and what date) you are talking about and then calculate your breakeven for it

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Because Ford is pretty volatile. I'm up about 100% on it and plan on holding until I hit the one year mark in June. It's not GME but compared to those others it's pretty volatile.

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Its at the top left.

I just did $240k for each stock even though I dont plan on doing that amount in a single stock moving forward, it was just for uniformity.

But for Ford, I did $240k / $12 (the strike price) which came out to $20k. That is 200 contracts. Date is 4/9.

I dont know how to calculate the break even. Can you show me?

red sox 777 posted...

Because Ford is pretty volatile. I'm up about 100% on it and plan on holding until I hit the one year mark in June. It's not GME but compared to those others it's pretty volatile.

I dont think its that volatile at all, certainly not in a given week, compared to all other stocks anyway.

what premium are you assuming per contract. I'm assuming 0.16 per share so 15 dollars per share after your fee.

So your breakeven is basically the strike price - the fee. In this case your breakeven is 11.85. There is a good chance ford ends below 11.85 next Friday. Now if you are ok owning the stock at 11.85 its not a huge deal but if you don't want to get assigned at all it's pretty risky for a 1.25% gain. (It will actually be less since Monday will have less premium due to theta unless the share price went down

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Why do you think it has a high chance of being below $11.85 at Friday close?

Sunroof posted...

Why do you think it has a high chance of being below $11.85 at Friday close?

He is probably just going by what the options market is saying (the market puts a high premium on it). The more important question is why do you think it doesn't? You're the selling the put. If you think the options market is wrong, you should have a good reason for your belief.

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I base all my opinions on the trends. I know you all will say I should be basing it on DD, research, etc. And youre not wrong. But Im looking at the one week and one month chart and noticing that it doesnt move a whole lot, much less below $12.

The greeks have you at around a ~30% chance of ending below 11.85 next Friday. I think that's probably overstated but even then I doubt it's below a 10% chance.

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Just looked up theta, great new term.

How do these people come up with their numbers anyway?

Sunroof posted...

I base all my opinions on the trends. I know you all will say I should be basing it on DD, research, etc. And youre not wrong. But Im looking at the one week and one month chart and noticing that it doesnt move a whole lot, much less below $12.

I will tell you this again, and you're not going to listen, but if you're basing your investment decisions solely on ultra-short term trends, you're not going to make much money in the long run. You will probably lose money. And I'm not sure what you're looking at - F was over $13 less than 3 weeks ago. If you zoom out to a bit over a year you will see that it has trebled from the low point.

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I will have to learn the hard way to fully comprehend. But it being at $13 recently reinforces to me that it wont be under $12. Thats how Im looking at it, anyway, as opposed to how quickly it can fall.

Sunroof posted...

Just looked up theta, great new term.

How do these people come up with their numbers anyway?

They start with the assumption, which is totally reasonable but which you don't seem to believe, that there is no such thing as a "free lunch" on the market. There is no investment you can make that will be profitable, riskless, and easy to find. Then there is some math you can to do work back from the current premiums for different strikes/expiries to figure out what the options market thinks the probabilities are.

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Yea i'm just going to reiterate my personal opinion. I don't think it's a good ideal to sell puts unless you are ok with getting assigned.

I personally don't think getting assigned on Ford is a bad thing at all (although please use smaller position sizes) but if you want to avoid assignment it's not where i would look.

And when it comes to trends I would at least recommend looking into moving averages and understanding them if you want to trade on trends.

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Yes. That is why I chose these safer stocks, and multiple ones so that I can diversify. I do not plan on putting all $240k into F or any individual one. In the event I get assigned, so be it.

ETH ATH baby!! @neonreaper

Been lurking for a while, might start being more active. Moonroof, I'd highly recommend a chat with a financial advisor to figure out the optimal play given your goals and risk appetite. Or at least to provide a more fleshed out sanity check and exploration of alternatives.

And for crypto/bitcoin, I'm keen on the stock-to-flow model. Underdamped log-scale step responses make a lot of sense to me. Overshoots probably decrease with the increasing market cap but I still think there's a trade around autumn.

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Lol, I know this isnt at all the FAs shut it feel like theres an intervention and Im being told I need a psychiatrist.

frankftw posted...

Been lurking for a while, might start being more active. Moonroof, I'd highly recommend a chat with a financial advisor to figure out the optimal play given your goals and risk appetite. Or at least to provide a more fleshed out sanity check and exploration of alternatives.

I couldn't agree more. You've built an amazing nest egg and really need to evolve beyond listening to board 8 of all places for investment advice.

In other news, the wife and I decided we're going to have a baby and I am raising money to invest in assets now so that when it is born in a couple of years we can reliably take time away from the business to spend with the newborn.

So last chance before I go to an evil bank to invest in chris industries :O


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Congratulations!!! Thats awesome news man!

thanks! I am like super happy tbh. A little stressed about the first part but I can't wait to grow our family :D

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PALM is the next crypto to watch out for. Hasnt hit the market yet but its the same people with ETH. It is tied to the famous painter Damian Hirst and I dont know all the details but I reckon its going to be big.

https://www.crowdfundinsider.com/2021/03/173775-ethereum-development- XXXXX studio-consensys-heni-group-heyday-films-launch- XXXXXXX palm-nft-studio-an-innovation-lab-for-digital-artists/amp/

Delete the Xs, link was too long

Is that a currency or just a new way to purchase NFTs with Ethereum? I read over the article and i'm still not sure.

Regardless it seems like the only way to buy into it at least initially will be via MetaMask which I still haven't set up. It's a legit pain in the ass to set up all the various accounts for crypto and keep them safe. It took me 2 months before my binance.us account was fully verified to allow me to deposit funds into it. I guess I should get around to setting up accounts on other sites that might prove useful, and I still need to figure out how to set up a cold wallet to store funds that I don't plan to use for day trading.

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You might be right actually. Im not sure if there is a way to make money off this then.