Conservative option strategies, what did you buy or sell today?

[fenders53]

(01-05-2021, 06:43 PM)pdaignau Wrote: [quote='fenders53' pid='23176' dateline='1609770001']
PUT Strike  28  EXP 1/15  Premium received 51.  Currently 41   Up 10
PUT Strike 29  EXP 1/8        57/86  Down 29
CALL Strike 29 EXP 1/15      60/65  Down 5
CALL Strike 30 EXP 1/8        38/11  Up 27
CALL Strike 32.50  EXP 1/22 54/3   Up 51

This is all about consistent income for me.  I have no emotional attachment to T.  T pays a div this week so that is mostly locked in.  I have collected $260 premium up front on these contracts and the extrinsic values should fall rapidly as expirations approach.  This doesn't have to work out perfectly to be a win.  We'll see what happens.    

Paul,

I just lost a long post here. I rolled two options forward and up and will repost details later.

[NilesMike]

(01-06-2021, 06:33 PM)NilesMike Wrote: Bought CRSP Bull Call spread135/140 16JUL21

Paid 2.45, max profit 2.55

Breakeven price 137.45 @ expiration

Anyone see a 28.00 drop by July?

Sold it out today for 3.10

25% profit, 1 day= good enough for me.

[fenders53]

(01-07-2021, 04:00 PM)NilesMike Wrote:

(01-06-2021, 06:33 PM)NilesMike Wrote: Bought CRSP Bull Call spread135/140 16JUL21

Paid 2.45, max profit 2.55

Breakeven price 137.45 @ expiration

Anyone see a 28.00 drop by July?

Sold it out today for 3.10

25% profit, 1 day= good enough for me.

I saw the spike quote today and a little voice told me this trade night not make it to the weekend.  Nice trade.  25% in a day rather than potentially hold it six more months for the unknown.  You won't go broke doing that everyday. 

[pdaignau]

I bought 2 T Feb 05 2021 27.0 Puts @ 0.21 to close the two I wrote on Dec. 31st for .57.  I figured AT&T was going to drop a little going Ex-Div.  I know that's not a lot of money, but this was the first time I've ever done anything like this.  Just happy to make a some money and learn a little.

I contemplated writing a T covered call and/or a KO put today, but I didn't have the time to do the research.

Thank you,
Paul

[NilesMike]

(01-07-2021, 06:48 PM)pdaignau Wrote: I bought 2 T Feb 05 2021 27.0 Puts @ 0.21 to close the two I wrote on Dec. 31st for .57.  I figured AT&T was going to drop a little going Ex-Div.  I know that's not a lot of money, but this was the first time I've ever done anything like this.  Just happy to make a some money and learn a little.

I contemplated writing a T covered call and/or a KO put today, but I didn't have the time to do the research.

Thank you,
Paul

Nicely done! It is less about the $$ but the mechanics at this point. The $$ does add up if done consistently.

[fenders53]

(01-07-2021, 06:48 PM)pdaignau Wrote: I bought 2 T Feb 05 2021 27.0 Puts @ 0.21 to close the two I wrote on Dec. 31st for .57.  I figured AT&T was going to drop a little going Ex-Div.  I know that's not a lot of money, but this was the first time I've ever done anything like this.  Just happy to make a some money and learn a little.

I contemplated writing a T covered call and/or a KO put today, but I didn't have the time to do the research.

Thank you,
Paul

Wait for KO to stop dropping everyday is usually good advice.  That probably happens soon.  No guarantee but pull up a chart.  It has strong support a little south of here.  I sell a put about every dollar drop starting around 50 strikes.  I'm usually a little early but it works out and the div is fine while you wait.  After the downgrades stop having an affect on SP the upgrades will come not too long later.  Yes a couple contracts of T is small money but you closed those out in a week for over 50% possible return.  Getting the process down is good.

[john]

My "speculative" option play
Bought some NIO at 50 to hold a few weeks ago and have been "wheeling" options on some,
Going to have some called away today at $51 so I sold a put for 1/15 $50 strike .80 premium.
Fenders, Mike what would you have done same thing^^ or rolled call forward?
I sold my 1st put ever on NIO when it had its ipo went from $9 to 3ish~ I didnt know what i was doing and sold it after a few months of never moving smh

[NilesMike]

(01-08-2021, 04:12 PM)john Wrote: My "speculative" option play
Bought some NIO at 50 to hold a few weeks ago and have been "wheeling" options on some,
Going to have some called away today at $51 so I sold a put for 1/15 $50 strike .80 premium.
Fenders, Mike what would you have done same thing^^ or rolled call forward?
I sold my 1st put ever on NIO when it had its ipo went from $9 to 3ish~ I didnt know what i was doing and sold it after a few months of never moving smh

A. I don't follow NIO.

B. It's not a dividend stock, see A, above.

C. Regardless of what some might say, a Covered Call is a bullish trade and YOU WANT them called away. That is the objective of the trade, sometimes, some get cold feet when it is about to be called away. The time to make the decision, IMO, is when you initiate the trade.

D. I don't roll, see C, above.

E. That's a pretty good premium on a put that far away, so for me that's a good trade. Since premiums are pretty fat in NIO, why sell the call so close if you wanted to hold the stock? I don't know when you entered but looking at the chart, the obvious price points to sell the call, IMO, was around the Nov highs of 57.00. If it takes out 57 and you bought at 50 and got a good call premium... I'd love that every week!

[john]

Mike, pure speculation play.
To poor to play with Tesla. Actually like the business model of NIO, the way I understand it you buy the car and pay a subscription fee to "rent" the batteries and can pull into a charging station and in a few minutes swap out the batteries and away you go on your trip instead of waiting to charge your own battries.
On this particular trade 11/27/20 sold $50 put 1.58 premium got assigned 12/4
sold 12/11/20 $51 call .64 premium expired worthless
sold 12/24/20 $51 call .51 premium expired worthless
sold 1/8/21 $51 call 1.19 premium
NIO closed at ~58 today so gonna get called away

[john]

(01-08-2021, 05:08 PM)NilesMike Wrote:

(01-08-2021, 04:12 PM)john Wrote: My "speculative" option play
Bought some NIO at 50 to hold a few weeks ago and have been "wheeling" options on some,
Going to have some called away today at $51 so I sold a put for 1/15 $50 strike .80 premium.
Fenders, Mike what would you have done same thing^^ or rolled call forward?
I sold my 1st put ever on NIO when it had its ipo went from $9 to 3ish~ I didnt know what i was doing and sold it after a few months of never moving smh

A. I don't follow NIO.

B. It's not a dividend stock, see A, above.

C. Regardless of what some might say, a Covered Call is a bullish trade and YOU WANT them called away. That is the objective of the trade, sometimes, some get cold feet when it is about to be called away. The time to make the decision, IMO, is when you initiate the trade.

D. I don't roll, see C, above.

E. That's a pretty good premium on a put that far away, so for me that's a good trade. Since premiums are pretty fat in NIO, why sell the call so close if you wanted to hold the stock? 

I have some that I will hold 
I would compare NIO to TESLA the valuation makes no sense thats why I have some shares to play with and some to hold...

[fenders53]

John,

I don't follow NIO closely but if you going to play with a hot stock, It's as good as any. The EV cult is going to grow, and China seems to have chosen Nio as one that will succeed. They're going to continue to grow revenues and units for the foreseeable future as they are starting from a fairly low base. Now that I said nice things, the valuation is nutty but that doesn't matter so much given what you are doing.

I understand what "Wheel Trading" is. That's a new name for an old strategy. I suppose I do my our version of it on income stocks. A few general comments...

1. You sell a put to enter, that's great. It's the best way to enter a stock IMO. Collect those premiums until whenever as long as the stocks narrative hasn't changed.

2. Eventually get assigned. You better really like the stock or you're likely to make impulsive decisions in a rough market. It WILL happen eventually. It's the nature of selling puts and waiting for weeks or months at the whim of the market.

3. Here is the easiest way to screw this strategy up, especially in a bull market. You now need to sell a call. This one requires some deeper thinking to keep the risk reward in balance. Formal wheel trading, if there is such a thing tells you to sell a covered call the day you are assigned shares. NIO isn't KO. You just took the risk of sitting on a put for smallish money. You could have been exercised with a 50% loss in a few weeks. Not being dramatic here. That's a very real risk. So a wheel traders survives that and automatically sells a covered call that will lock in a 5% return in a stock that might run 20% in a month. You just lived that outcome and left money on the table.

You have just exposed the problem with the wheel strategy a volatile stock. I am careful with step 3 these days because I've been burned too many time. I try to forget how I got here and sell the call when it actually makes sense. If it's actually a good stock I'll get a chance when it runs up to at least somewhat overbought. If not collect the dividend a few more months. A decent dividend helps me be more patient. I do what you are doing on stocks like KO repeatedly. In my perfect world I also have some shares not obligated to a call in case it goes ballistic to the upside. It stings less. You can sell a call on the other shares that launched while you regroup selling a put on this or another stock.

The risk/reward is just out of balance for what you are doing. You don't trade NIO the same way you trade KO or T.

I have a couple rolls to share later tonight. They present a good example of the decisions you face. Sometimes you win, sometimes it's meh. You usually only lose if you make stupid decisions. Works too often for me to rule it out.

[Binary]

GPS 21.5 short call expired now, premium of 48 USD collected. I really want to get rid of my 100 GPS shares, so will sell another call on Monday.