Investing General Discussion

Fogel said:

Right now I'm about 50/50 puts/indexes. While technically not cash, I've been cautious enough that not many puts have been exercised, and the ones that have I've still been able to sell for a profit within a week or two. The market has been going kind of sideways the past month, which is great for puts.

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With profits I scooped before the election I am at about 25% cash and have been doing puts. Stocks I either own or wont mind owning and going far out-of-the-money trying to keep backtesting showing a less than 15% chance of being assigned. Pig good. Hog bad.

Fogel said:

Right now I'm about 50/50 puts/indexes. While technically not cash, I've been cautious enough that not many puts have been exercised, and the ones that have I've still been able to sell for a profit within a week or two. The market has been going kind of sideways the past month, which is great for puts.

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Forgot to mention, I got 65 cent premium yesterday selling the Dec 18th puts on HYLN at $15 strike. There is some risk involved which is why its 65 cents but I think EV mania is coming back and it should touch $15. If it does its a good entry price.

Locnar said:

I'm the opposite of cash, i've enabled margin on my yolo account and have drawn on it. My retirement 401k stays in its index though. My homestead is paid for, so I feel like I can take greater risk in my yolo account. So far so good. I have not and do not do options/puts,etc. Just shares for me, which i guess helps balance out my non-cash stance.

I'm almost afraid to teach myself about options. I tell myself its too similar to going to the casino.

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To me, options are the opposite of the casino. Options are math and leverage. Options allow me to leverage capital at a lower rate. For example:
MP - Selling puts at $12.50 strike paid a 40 cent premium expiry of 12/18. Current price is $15.09. So per contract I tie up $1250 in cash (i only do cash covered puts, no margin) for a return of $39.3 after commission. So for 30 days it generates a 4.29% return on capital (39.3/1250) and the capital is freed up to be used again in 30 days assuming it runs to expiry. The strike is 17% below current so if I get assigned I am getting a stock I like at a price I am willing to buy it at.

For me the key is to only focus on stock you have a good knowledge of (ie.. stuff you own or have researched to own). Low volatility stocks are safer but of course pay less premium. The further out of the money you go the less premium and of course less risk.

I forgot to add, if you do get assigned then you turn around and start selling covered calls on the stock you just got assigned with to keep generating revenue and eventually get assigned at a profit.

Fogel said:

Yeah, I view cash covered puts as nothing more than setting limit orders on stocks you wanted to buy anyway with the added bonus of the premium you receive. So using this method is no different then buying stocks out right. Only down side to options is you have to buy in 100 share contracts.

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The difference is that buying the stock ties up capital until you sell it. Cash covered puts only ties up capital until the option closes so the capital can be reused for more premium.

Fogel said:

Or the other benefit that if the stock goes up you can close the option way early for pennies freeing up your capital and still keeping the premium

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Exactly. I never let them expire. I would rather spend the few pennies and eliminate the possibility of a black swan fucking me.

If you are betting against EV vehicle plays (be they cars, parts or supply chain) right now you are swimming against the tide.

Locnar said:

This quote from WSB made me laugh:

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I just looked. the Dec 18th $30 strike calls are selling for 40 cents. Thats insane. Implied volatility is 1.33 on the 30s. Crazy.

LachiusTZ said:

The regret of selling Tesla is real.

Did well with it, but it just never dropped again.

Worst economic disaster ever imo

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Patience, Grasshopper.

Jysin said:

Crazy to think TSLA tanked to $330 per share in September, yet here we are >$500 today.

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Lol it was 390 a few weeks ago when I bought back in.