Investing General Discussion

Could always dump money into marijuana stocks on the speculation Trump actually does re-classify it from Schedule I to Schedule III

Foler said:

Lmk if you find a home for money outside of tech. I’m 100% in tech atm and looking for something outside it.

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You can get an ETF for just about every asset class. Find an index that doesn't have tech in it. Which one, that's up to you.

Khane said:

Could always dump money into marijuana stocks on the speculation Trump actually does re-classify it from Schedule I to Schedule III

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‘those stocks pump and dump like beasts but I have actually never lost doing this. Wait for IV to drop and stock to trade in its little channel. It will linger there for 6 months or so. Buy ATM leaps a year out, when it pumps sell immediately Because unless things actually change it will drop right back down after the hype falls. Not sure if the names are still valid but I think it was ACB, TRLY, CRON, and CBC or something.

do not get in if they are already pumping. Just asking for trouble

One heck of an uneventful OpEx

Friend of mine showed me how his portfolio was up about $81k just selling SPY options. He claimed he was able to do it on margin with a $100k account; essentially he was selling 0DTE CSPs at 10 delta, about 10 CSPs each trade. Made $81k since April.

I don't quite understand how Schwab was allowing him to sell $600k worth of SPY with $100k liquidity.

My only criticism of that strategy is if the market crashes. What do you guys think?

tugofpeace said:

Friend of mine showed me how his portfolio was up about $81k just selling SPY options. He claimed he was able to do it on margin with a $100k account; essentially he was selling 0DTE CSPs at 10 delta, about 10 CSPs each trade. Made $81k since April.

I don't quite understand how Schwab was allowing him to sell $600k worth of SPY with $100k liquidity.

My only criticism of that strategy is if the market crashes. What do you guys think?

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I can't speak to his specific success obviously, but I absolutely increase my annual yield by about 3-5% by selling options on my SPY positions. I am not super intelligent or detailed about it so I play it insanely safe. I basically sell daily/weekly(depending on my life and opportunity to be at computer) at the < .1 delta. I do that low of a delta specifically because I may not have the ability to manage my position. I also refuse to sell calls below my cost basis which on downturns can mean no sold calls or ones for like .05 cents(5$) or whatever(rare now because I've held SPY so long).

If one is looking for a way to add a little bit more each year in a managed account I would strongly recommend some research and doing this. However as with anything, it carries risk. Sell strikes below your cost basis trying to catch premium, could lose money. Sell high delta strikes for attractive premium, need to roll or get called. And a roll could work....if it dips again and a sold put brings you back in play. But generally speaking while your dollar value goes up, your share count has gone down and thus future premiums could be lower.

Hence my < .1 delta

It's NOT a get rich quick scheme, but it absolutely gives a minor boost to an account

EDIT:

I now read that you said he is selling CSP. Same concept though. The general term for this stuff is "the wheel" but yes, I have no idea how they let him margin 600k with a 100k account. Your friend may be exaggerating.

Also to add context:
This is for monday. Current SPY is about 643. I would sell a CC(covered call) at the 649 strike because I don't *really* want to get called. If I am....649 is way above my cost basis so not the end of the world, plus i could roll or eat the buy back and other options, but its a "safe" play.

Let's say you had a bit over half a million (1,000 shares) in your account for SPY. Based on what I read for current prices you'd make about 100-120$. As I said, not exactly a huge moving of the needle. But this is a DAILY option, so if you hypothetically did this every day, you'd add an extra 25k to your account beyond whatever natural dividends and appreciation it received. Or 3-4% of your total account value.
Goes back to "get rich quick" absolutely not, but if you could add 3-4% annually to the top of whatever you were getting, would you?

As much as Araysar can be a douche in other threads, he made a fantastic point in some esoteric post once. Dudes will spend 1000 hours mastering guitar hero or min/maxing diablo 4, but when it comes to their financial independence and success anything over a 30 second youtube video is annoying.

It’s not cash secured if he’s doing 600k on 100k. That’s naked gambling.