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02-17-2021, 07:46 AM
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#41
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 161
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I’m analyzing selling more covered puts as a way to earn (on stocks I like anyway) while my hunk of ballast (cash) hangs out, waiting for a market correction. I don’t mind working at it and maintaining it weekly and monthly, as it makes sense. I’ve started analyzing at the top of my “buy more” list, but it occurred to me that some of you are already doing this and might have some favorites I could research.
For example, I like both ARKK and AAPL over the long run. If I choose options about 30% under current price, I could earn $73 for ARKK and $16 for AAPL. At the moment this gives me me an annualized earn of almost 8% if I repeat monthly for ARKK, but only 2% if I do the same for AAPL. (Earnings divided by reserved cash, x12)
My question is - how are you finding your optimum stocks, then optimal put price to maximize your earnings? This is within an IRA, so no tax implications. TIA for any suggestions.
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02-17-2021, 08:19 AM
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#42
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Dryer sheet aficionado
Join Date: Apr 2018
Posts: 36
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Someone tell me if I am crazy, but as we all look for yield on our money, I found something that I like.
So Delta Airlines (DAL)
I highly doubt it will go out of business and I think it is safe to assume that a year from now it will be back to normal.
With that said, you can buy DAL today at say $43.69 and write a covered call for next January 2022 $30 for $16.4
So you are shelling out $27.29 today, and making $2.71 if it trades over $30 next year. That yield is over 10% annualized.
There are other combos, like you can do it with a $50 call and even pocket some over today's price.
Worth the risk?
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02-17-2021, 08:34 AM
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#43
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 161
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Quote:
Originally Posted by DR1959
Someone tell me if I am crazy, but as we all look for yield on our money, I found something that I like.
So Delta Airlines (DAL)
I highly doubt it will go out of business and I think it is safe to assume that a year from now it will be back to normal.
With that said, you can buy DAL today at say $43.69 and write a covered call for next January 2022 $30 for $16.4
So you are shelling out $27.29 today, and making $2.71 if it trades over $30 next year. That yield is over 10% annualized.
There are other combos, like you can do it with a $50 call and even pocket some over today's price.
Worth the risk?
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Yes, to me. I’m selling covered calls on a lot of my stocks, and even consolidating some positions so that I can have more round lots (of 100) in order to sell more calls.
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02-17-2021, 08:39 AM
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#44
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 161
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Oh, and if you sell those calls on stocks with good dividends, you can also keep the dividends and add them to your net yield.
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02-17-2021, 08:59 AM
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#45
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Dryer sheet aficionado
Join Date: Apr 2018
Posts: 36
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I do alot of covered calls and even some cash secured puts.
But the idea of using a LEAP which is a long term option seems like a good way to boost yield.
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02-17-2021, 10:51 AM
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#46
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2013
Posts: 11,078
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Quote:
Originally Posted by RVplusDog
I’m analyzing selling more covered puts as a way to earn (on stocks I like anyway) while my hunk of ballast (cash) hangs out, waiting for a market correction. I don’t mind working at it and maintaining it weekly and monthly, as it makes sense. I’ve started analyzing at the top of my “buy more” list, but it occurred to me that some of you are already doing this and might have some favorites I could research.
For example, I like both ARKK and AAPL over the long run. If I choose options about 30% under current price, I could earn $73 for ARKK and $16 for AAPL. At the moment this gives me me an annualized earn of almost 8% if I repeat monthly for ARKK, but only 2% if I do the same for AAPL. (Earnings divided by reserved cash, x12)
My question is - how are you finding your optimum stocks, then optimal put price to maximize your earnings? This is within an IRA, so no tax implications. TIA for any suggestions.
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I've been playing with Apple calls as I have a little too much. I'd been going out 2-3 weeks for 8%-10% OTM. I need to sell one more for 2 weeks out but I'm going to wait till APPL settles down after this adjustment.
I'll be looking at shorter duration too. I've also been doing this with ICLN and just yesterday bought a put on ARKF. It's on my buy list and it can be an OK producer of premiums. Looking at ARKK that's interesting too. Little volatility is good for options prices. I swear the ARKs just had weeklies added this week.
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02-17-2021, 08:44 PM
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#47
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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Speculative Plays I currently hold:
ALTO, AUPH, BFT, CRLBF, DM, FIII, GBTC, GIK, OCUL, PSHZF, PSTH, TFFP, VFF, VUZI, XERS, XL, ALTO, BMWLF, BRGGF, DMYD, PDAC, SIOX, INSG.
Average (weighted) profit on these (as of 2 days ago) 27.5%, Average holding time: 46 days.
I've also made a bunch of short term trades on these (and others), average (weighted) return 16%, average weighted holding days 29. Well over 80 trades and counting. [These numbers are already out of date, I made a spreadsheet of these earlier this week and have done trades since then. The holdings are across multiple accounts and multiple brokerages, making it harder to automate.]
I am not counting any trades made on long term holdings (I've sold off a bit of Apple as it represents too much single stock risk, sold off Intel as I no longer like their longer term outlook). Most of those sales have been to max out Long Term capital gains in 2020.
This has been a great market for speculative, small cap plays for the last few months. I've done more trades in the last couple/few months than all told in several years, perhaps more.
Yes, this will end badly, as all speculative markets do. How burned I will be when that (eventually) happens remains to be seen. (I hope to be able to get out and not ride it down, but future actions are always suspect.)
Still pissed at myself for not buying INMD or a BUNCH more GBTC in the low 30's, or in the case of Bitcoin when it broke through its 2018 all time high.
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02-17-2021, 11:02 PM
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#48
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 17,010
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Quote:
Originally Posted by RVplusDog
I’m analyzing selling more covered puts as a way to earn (on stocks I like anyway) while my hunk of ballast (cash) hangs out, waiting for a market correction. ........, I like both ARKK and AAPL over the long run. If I choose options about 30% under current price, I could earn $73 for ARKK and $16 for AAPL. At the moment this gives me me an annualized earn of almost 8% if I repeat monthly for ARKK, but only 2% if I do the same for AAPL. (Earnings divided by reserved cash, x12)
.....
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I'm doing the same for ARKG but only about 10% below price, so of course the payout is about $250 per lot.
Catch is, should the music stop, I'll be owning some at a steep price compared to a 40% market drop.
But less worse than buying the stock outright.
Quote:
Originally Posted by copyright1997reloaded
......
Yes, this will end badly, as all speculative markets do. How burned I will be when that (eventually) happens remains to be seen. (I hope to be able to get out and not ride it down, but future actions are always suspect.)
....
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So very true
__________________
Fortune favors the prepared mind. ... Louis Pasteur
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02-19-2021, 04:08 PM
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#49
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 161
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E*TRADE just finished getting my accounts transferred over from Vanguard - and I wish I had done this years ago!
They have SO MANY tools! Conditional orders?!?! Options income finder? Ok gotta go, gots lots to read. Will let y’all know if I find anything good. And, as a PS, I’m glad I picked up some PLTR a couple of days ago :-)
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02-19-2021, 04:21 PM
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#50
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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Quote:
Originally Posted by RVplusDog
E*TRADE just finished getting my accounts transferred over from Vanguard - and I wish I had done this years ago!
They have SO MANY tools! Conditional orders?!?! Options income finder? Ok gotta go, gots lots to read. Will let y’all know if I find anything good. And, as a PS, I’m glad I picked up some PLTR a couple of days ago :-)
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Welcome to the 21st century!
I primarily use Ameritrade's Think Or Swim (TOS) platform, which has more features than seems humanly possible. For instance, in active trader view I can click on a bid or ask to hit it. I can create an order then in a chart view drag the order up/down in price to have it resubmitted at that price.
If I weren't so busy (excuse) I would dedicate a few days just watching videos on features in it to become more comfortable with some of the hidden features it has.
Just be careful clicking things! I recently bought when I meant to sell! Fortunately I realized it and corrected (sold both what I had and the purchase) with it slightly higher.
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02-19-2021, 04:22 PM
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#51
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 161
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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!
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02-19-2021, 04:23 PM
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#52
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 161
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I am so easy to please after 30 years at Vanguard. The simple capability of single-click resubmitting expired orders almost makes me cry.
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02-19-2021, 05:19 PM
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#53
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Dryer sheet wannabe
Join Date: Jan 2020
Posts: 19
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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.
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02-19-2021, 05:36 PM
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#54
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2013
Location: Limerick
Posts: 5,637
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This Bitcoin craze is unbelievable. We bought some GBTC on Tuesday and it’s already increased 13% since our purchase. We did this with some fun money.
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02-19-2021, 05:49 PM
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#55
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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Quote:
Originally Posted by copyright1997reloaded
Speculative Plays I currently hold:
ALTO, AUPH, BFT, CRLBF, DM, FIII, GBTC, GIK, OCUL, PSHZF, PSTH, TFFP, VFF, VUZI, XERS, XL, ALTO, BMWLF, BRGGF, DMYD, PDAC, SIOX, INSG.
Average (weighted) profit on these (as of 2 days ago) 27.5%, Average holding time: 46 days.
I've also made a bunch of short term trades on these (and others), average (weighted) return 16%, average weighted holding days 29. Well over 80 trades and counting. [These numbers are already out of date, I made a spreadsheet of these earlier this week and have done trades since then. The holdings are across multiple accounts and multiple brokerages, making it harder to automate.]
I am not counting any trades made on long term holdings (I've sold off a bit of Apple as it represents too much single stock risk, sold off Intel as I no longer like their longer term outlook). Most of those sales have been to max out Long Term capital gains in 2020.
This has been a great market for speculative, small cap plays for the last few months. I've done more trades in the last couple/few months than all told in several years, perhaps more.
Yes, this will end badly, as all speculative markets do. How burned I will be when that (eventually) happens remains to be seen. (I hope to be able to get out and not ride it down, but future actions are always suspect.)
Still pissed at myself for not buying INMD or a BUNCH more GBTC in the low 30's, or in the case of Bitcoin when it broke through its 2018 all time high.
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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.
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02-19-2021, 09:12 PM
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#56
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Recycles dryer sheets
Join Date: Aug 2017
Posts: 199
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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.
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02-20-2021, 03:29 AM
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#57
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 161
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Quote:
Originally Posted by copyright1997reloaded
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.
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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.
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02-20-2021, 07:45 AM
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#58
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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Quote:
Originally Posted by RVplusDog
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.
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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.
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02-21-2021, 03:28 AM
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#59
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 161
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Quote:
Originally Posted by DR1959
Someone tell me if I am crazy, but as we all look for yield on our money, I found something that I like.
So Delta Airlines (DAL)
I highly doubt it will go out of business and I think it is safe to assume that a year from now it will be back to normal.
With that said, you can buy DAL today at say $43.69 and write a covered call for next January 2022 $30 for $16.4
So you are shelling out $27.29 today, and making $2.71 if it trades over $30 next year. That yield is over 10% annualized.
There are other combos, like you can do it with a $50 call and even pocket some over today's price.
Worth the risk?
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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%!
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02-21-2021, 06:33 AM
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#60
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Thinks s/he gets paid by the post
Join Date: Feb 2004
Location: Switzerland
Posts: 1,045
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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.
__________________
FIREd, April 1, 2015. My Retirement Benefits Package includes: 6 months vacation, twice a year.
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