Ok this thing is so cool. It will look at any stock lists (what you have, watchlist you set up, etc). I can tell it I want to sell a put, minimum stock discount (you choose: I picked 10%), and minimum option premium (I left the default of 25). It came up with a list of puts, ideal exp dates & strike prices, % return if the put expires, and annualized if-expired return. Perfect!
Stock Picking 2021
- Thread starter RVplusDog
- Start date
I bought a stock called CVLB on the OTC market for about .18 each about 3 years ago. I ignored it for a bit, (direct to consumer pharmacy at the time and some small telemed). So telemed exploded they expanded that part of the business and its now on the Nasdaq (after a reverse split) and its been as high at $33. They are changing their name to LifeMed next week and the revenue projections keep going higher. I got quite lucky, and only dabble a little in stocks but this past month has been fun! I just retired so its nice to have the unexpected "fun" money. Of course I don't know when I will actually sell!
I only buy in things I really understand, airlines, travel and pharma etc.
I only buy in things I really understand, airlines, travel and pharma etc.
copyright1997reloaded
Thinks s/he gets paid by the post
ARK investments latest buy list has a new entry, VUZI. It was up 11% today and then up another 12%+ in after hours (as I type this, after the ARK news hit). My cost on this one is under $5. Unfortunately, I did not buy nearly enough of it.
When I bought it, I liked their stuff, but was concerned if they a) could make money selling AR glasses and b) whether they would be hurt badly/wiped out if a big player (e.g. Apple, others) got in the game. I still have those concerns, but apparently the market doesn't.
I'm a big fan of BTC and ETH in a 75:25 ratio which is the tangent portfolio for the pair. I've traded GBTC in my Roth but the trust is about 30% overvalued, and a risk is when there is an actual tradable crypto ETF that can be bought into a Roth or TIRA that premium will evaporate. Canada just approved a crypto ETF and Australia is just about online with one too.
ARK investments latest buy list has a new entry, VUZI. It was up 11% today and then up another 12%+ in after hours (as I type this, after the ARK news hit). My cost on this one is under $5. Unfortunately, I did not buy nearly enough of it.
When I bought it, I liked their stuff, but was concerned if they a) could make money selling AR glasses and b) whether they would be hurt badly/wiped out if a big player (e.g. Apple, others) got in the game. I still have those concerns, but apparently the market doesn't.
We love this stock. Nephew recommended it a month or two ago. After research, DH bought a lot and I bought a little. I kept mine, he bought more. I think his was 300% a couple of days ago.
I also watch the ARK buys. I tried to get BILL when they bought in, but it was a rocket. I did pick up a little CMLF, and not at the best price, but I’m OK selling calls on it or holding until I have a good return. So far, I haven’t had the best luck with trying to buy in any time close to the ARK announcements ~ I’ve either paid too much or bid too low & missed out.
copyright1997reloaded
Thinks s/he gets paid by the post
My main (initial) purchase of this was mid October @$4.94, and I had to hold my nose and buy it as it was more than double the March lows. I then got to watch it slowly deflate to under 3.5 in early November, and it spent time from 3.5 to 4.5 range for the next month. So it sounds like you bought it just about the perfect time! They are quite "frequent" with their press releases, but do have some interesting technology and I think this (AR glasses) has tons of opportunity, perhaps even eventually replacing cell phones (i.e. a heads up display with the ability to capture voice and project image and sound). Not for everyone/everything, but interesting none the less.
I happen to have a few lots of AG. E*TRADE is telling me I can get annualized static return on a $18 10/21 call of 36%!
Bryan Barnfellow
Thinks s/he gets paid by the post
I have a concentrated portfolio of stocks with strong dividend growth characteristics, which represents 40% of our income. Recently I sold INTC--a 20 year hold--because of continuing execution and competitive concerns. Also, sold CVX and KMI and now am completely out of any fossil fuel names. Looking to an increasingly likely green energy future.
I was hoping the fossil fuel companies have a bit more of upside during the first half of the year or so. And I think I remember seeing info from PSX on their roadmap away from fossil fuels... I still have cvx, kmi, and psx. My sorta-greener kinda-energy plays are nee, LNG, NI, OGS, ETR, GE, ENB, CNP, and maybe some parts of my utilities (DUK, ED, & reducing my D). I also have generator, solar, & battery exposure. I hope those are profitable companies going forward.
Dash man
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
My green energy play is CMI. Building natural gas trucks, but more importantly are working on hydrogen powered trucks.
Out-to-Lunch
Thinks s/he gets paid by the post
Do they have any plans on where to acquire the hydrogen?
Dash man
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I shorted GBTC, RIOT, and ETHE on Friday, and bought some puts on RIOT. How low can Bitcoin go this week? Looking to buy and cover about half of my positions today.
Also short a bunch of speculative tech stocks. Hopefully they continue tanking this week and I can cover and roll the gains into some value plays.
Also short a bunch of speculative tech stocks. Hopefully they continue tanking this week and I can cover and roll the gains into some value plays.
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I'm too chicken to really short anything, the closest I'll come is selling puts on ARKG.
Dash man
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
At first glance it looks like we’re getting punished, then I look further back an see how far it’s risen over the past year.
This might be a good time to do some selective stock Roth conversions.
I sold puts on a lot of stocks I’d like to own. I think I’m at under 5% assigned. I sold a last-minute put on PLTR last week that came in at a price lower than the limit buy I had previously placed. Then I was able to sell calls on that PLTR for 21% APY at a $45 strike, so that worked out well.
I’m slowly learning which stocks have good volume & premium on options. There’s prolly great tools /websites out there for that which I haven’t found yet
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
One issue I have with selling Calls and Puts, is evaluating (or knowing) what is a good price in relation to the strike price and stock and I'm sure volatility plays a role.
Until I learn how to figure out that, I'm just going by my feelings of:
How do I feel selling my stock at price X in some number of days (if it gets called), and the opposite about selling the put.
Until I learn how to figure out that, I'm just going by my feelings of:
How do I feel selling my stock at price X in some number of days (if it gets called), and the opposite about selling the put.
I do alot with calls and puts.
Cash Secured puts, with a call date right before a good stock pays a dividend is a good trade. I get the premium and if I get assigned, I then grab the dividend. I then immediately write a covered call.
Covered calls also just after a dividend is paid, so I can grab dividend and then lose my stock.
Another play I like is a LEAP on a good dividend stock. So you take a stock paying a solid 5%, buy the common, write a covered call with a call price well over your cost. In 1 year, you collect 5%, plus if you get called, the premium and the difference on call over cost. You can pocket 20% plus, better than a CD!!
I think best way to play market is look for these income plays and not look to make a killing on a growth stock.
Cash Secured puts, with a call date right before a good stock pays a dividend is a good trade. I get the premium and if I get assigned, I then grab the dividend. I then immediately write a covered call.
Covered calls also just after a dividend is paid, so I can grab dividend and then lose my stock.
Another play I like is a LEAP on a good dividend stock. So you take a stock paying a solid 5%, buy the common, write a covered call with a call price well over your cost. In 1 year, you collect 5%, plus if you get called, the premium and the difference on call over cost. You can pocket 20% plus, better than a CD!!
I think best way to play market is look for these income plays and not look to make a killing on a growth stock.
How does "grabbing the dividend" on the put you wrote gain you anything since the stock price is automatically reduced by the amount of the dividend.
example: stock xyz trading at $52 you sell a put at $50 with a March 31st strike @ a premium of $2.00 and a dividend date of say Apr 2nd. On Apr 2 it pays a $1 dividend.
On Mar 30th it drops to $48. The stock is put to you at $50. Your cost is ($50-$2) $48. On apr 2nd you get a $1.00 dividend and your cost is now $47 but the price of the stock is adjusted to $47 as well. So you either have a $48 stock that you paid $48 for or a $47 stock that you paid $47 for. Therefore the dividend didn't gain you anything. If you then "immediately write a covered call" it will gain you less premium if you write it when it is valued at $47 than it would if you wrote it @$48, again a wash.
So you are missing something.
Use your XYZ example but lets say 4/2 is the Ex-div date, I don't use div-date.
If you sell a $50 Put, you pocket the $2 premium and it has to get below $50 for it to be assigned to you by 3/31.
If it doesn't you pocket the $2 and it expires worthless.
If it does, then on 3/31 you get assigned the stock, let's say it dropped to $49, now you are in the stock at $48. On 4/2 it goes ex, and it drops further but before it did that you wrote a covered call for $50, now you get the premium from that and the dividend.
It's not foolproof, but I rarely lose on the trade if done right.
Try it on paper and you will see!
I also play with stocks I don't mind owning if I get stuck.
When I wrote "dividend date" I meant the ex div date (the day the stock price is adjusted down by the dividend amount) not the "payout date". Sorry for that confusion. The price is immediately adjusted down on that ex div date not the payout date as you pointed out. So I can see how your example would work.
So at a minimum you always collect the premium(from writing the put) and the dividend. The risk of course is that the price drops below the strike -premium-dividend before expiration and you now own it for more than it is worth. so say it went to $45 before Mar 31st and it cost you $47(50-2-1) to own it. So now you are down $2 and your covered call writing yields a smaller premium than hoped for.
On the plus side if it is a good stock you don't mind owning you still only paid $47 for it rather than $50.
Still there is that grey area of when to write the covered call. Do you now wait and hope it jumps back up from $45 before the ex date and possibly fall further behind or do you just write it right away regardless.
I guess it also even depends on how close the strike date is to the ex date so that you even have a choice.
You get a feel for it as you do it. There are still many variables, like the overall market. Works well in a bull market, but if you get caught holding and dividend stock, then you are still earning. Also your boosting your income by writing covered calls. I have some stocks I have been in and out 10 plus times a year. Some I keep writing calls and keep pocketing dividends. I have a goal of $500 a week and I have achieved that the last 2 years and exceeded it. This year my average is $1200 a week. I am playing with a decent amount of capital and retired, so its more of a hobby.
Don't get greedy. I will take $100 from a trade in 1 day and be happy. Better than gambling and better than getting .01% on MM.
But don't get me wrong, last March/April, I was holding and sitting on covered calls. I made money on every call but was sitting on large losses, market came back and I wrote covered calls all the way back and called out on most of them.
Cash secured puts, you need to have the cash in account. I calculate my yield on the cash. So if I secure a put with say $10K and it makes $100 in say 1 month or less, that is a 12% plus annual yield and I happy with that!
Don't get greedy. I will take $100 from a trade in 1 day and be happy. Better than gambling and better than getting .01% on MM.
But don't get me wrong, last March/April, I was holding and sitting on covered calls. I made money on every call but was sitting on large losses, market came back and I wrote covered calls all the way back and called out on most of them.
Cash secured puts, you need to have the cash in account. I calculate my yield on the cash. So if I secure a put with say $10K and it makes $100 in say 1 month or less, that is a 12% plus annual yield and I happy with that!
