The Speculative Stocks....

[vbin]

I have sep spy $200 puts

[fenders53]

(03-26-2020, 10:05 AM)vbin Wrote: I have sep spy $200 puts

It's time I do that.  I've dodged some bullets and made a lot of money the past week or so being over allocated to stocks long.  I need to pull my bull horns back in lol, and get a little more protected.

[DividendGarden]

(03-26-2020, 10:05 AM)vbin Wrote: I have sep spy $200 puts

how much were those?  Maybe I'll pick up a couple.

[Otter]

(03-26-2020, 10:01 AM)fenders53 Wrote:

(03-26-2020, 09:47 AM)Otter Wrote: Bought some SQQQ and 9/18/20 UAL 35 Puts today on the speculative/high risk side.

Airlines will be interesting.  They probably have unlimited GOV support but their finances are a mess.  I lightened up on my DAL long position on the nice spike.  Selling covered calls on the remaining shares.

My short-term play is essentially:

1. Today is the best news airlines will have for several weeks or months with the bailout money passing
2. People won't be spending their $1,200 checks on United Airlines tickets
3. Gov't taking an equity stake = dilution
4. Gov't may not be as hands off with an airline equity stake as it has been in other bailout scenarios (the public hate airlines). There may be gov't pressure to be more passenger-friendly (revenue negative). Even one or two Senators raising the issue publicly could cause shares to crater temporarily.
5. Buybacks banned, so that's one tool of share price support gone. 
6. Volatility is still a thing, and when airlines drop, they like to go 10% or more in a day lately. 

I think I'll have one big down day to test this theory soon. Not sure there is going to be a huge appetite to hold long positions into the weekend after the week's big runup.

[fenders53]

(03-26-2020, 10:10 AM)DividendGarden Wrote:

(03-26-2020, 10:05 AM)vbin Wrote: I have sep spy $200 puts

how much were those?  Maybe I'll pick up a couple.

The price will change from minute to minute.  If you do it, just make sure you give yourself some time for blind luck to help you out.  An option that expires in a couple weeks or a month is much cheaper, but guessing what the market will do in a week or too is no better than a trip to the casino.  It's the reason I make money SELLING options a very high percentage of the time.

[Otter]

(03-26-2020, 10:15 AM)fenders53 Wrote:

(03-26-2020, 10:10 AM)DividendGarden Wrote:

(03-26-2020, 10:05 AM)vbin Wrote: I have sep spy $200 puts

how much were those?  Maybe I'll pick up a couple.

The price will change from minute to minute.  If you do it, just make sure you give yourself some time for blind luck to help you out.  An option that expires in a couple weeks or a month is much cheaper, but guessing what the market will do in a week or too is no better than a trip to the casino.  It's the reason I make money SELLING options a very high percentage of the time.

Yep. A lot of the folks buying weeklies have gotten burned badly this week. The potential return is much higher due to the lower premiums, but it can be real easy to wipeout.

[fenders53]

(03-26-2020, 10:14 AM)Otter Wrote:

(03-26-2020, 10:01 AM)fenders53 Wrote:

(03-26-2020, 09:47 AM)Otter Wrote: Bought some SQQQ and 9/18/20 UAL 35 Puts today on the speculative/high risk side.

Airlines will be interesting.  They probably have unlimited GOV support but their finances are a mess.  I lightened up on my DAL long position on the nice spike.  Selling covered calls on the remaining shares.

My short-term play is essentially:

1. Today is the best news airlines will have for several weeks or months with the bailout money passing
2. People won't be spending their $1,200 checks on United Airlines tickets
3. Gov't taking an equity stake = dilution
4. Gov't may not be as hands off with an airline equity stake as it has been in other bailout scenarios (the public hate airlines). There may be gov't pressure to be more passenger-friendly (revenue negative). Even one or two Senators raising the issue publicly could cause shares to crater temporarily.
5. Buybacks banned, so that's one tool of share price support gone. 
6. Volatility is still a thing, and when airlines drop, they like to go 10% or more in a day lately. 

I think I'll have one big down day to test this theory soon. Not sure there is going to be a huge appetite to hold long positions into the weekend after the week's big runup.

Agree with every bit of that.  And the longs don't want a serious GM style bailout anyway. They'll get a few grants along the way most likely.  Mostly just more loans most of them can't service.  I still believe DAL is about the only one you shouldn't bet hard against.  Doesn't matter if I am wrong, there are MUCH easier targets.  Some of those jokers couldn't properly manage their books when times were great.

[vbin]

(03-26-2020, 10:10 AM)DividendGarden Wrote:

(03-26-2020, 10:05 AM)vbin Wrote: I have sep spy $200 puts

how much were those?  Maybe I'll pick up a couple.

I bought them yesterday for approx $10.

[fenders53]

(03-26-2020, 10:35 AM)vbin Wrote:

(03-26-2020, 10:10 AM)DividendGarden Wrote:

(03-26-2020, 10:05 AM)vbin Wrote: I have sep spy $200 puts

how much were those?  Maybe I'll pick up a couple.

I bought them yesterday for approx $10.

Dividend Garden, Option prices are normally times 100 when you see us list them in this thread.

[fenders53]

Sold my first SPY put. A JAN21 230 Strike, and a SEP20 225 Strike. That's enough until I feel more comfortable with how they move. I can adjust on the fly when the inevitable big down day comes.

I'd really appreciate some feedback but you'll have to accept my rationale for what I did to offer advice.

I believe it is highly probably the market pulls back 10-15% in the next few weeks. I think there is no end to what the FED will do to block a decline much more than that. I have no intention of holding these puts more than about a month and only if the virus is getting exponentially worse. I am not holding these puts with any confidence the market pulls back a total of 50% plus. The market will soon enough get numb to catastrophic news like it does every correction. A good fund manager knows there were some generational good deals onceretain stocks last week. I could be wrong but we all have to have to have a thesis. I'm OK with losing half my money for the benefit of the insurance. Nowhere near enough to fully protect my port but it won't hurt my mood on a big down day. This is just a bit of a hedge as I am very much long other than a few covered calls I sell each week. I don't intend to make a big short bet against the market. I am a month late doing that. It's just outside my little box lol. If I felt comfortable doing that I'd just just sell all my stocks and I'm not going to do that either.

[Otter]

(03-26-2020, 12:50 PM)fenders53 Wrote: Sold my first SPY put.  A JAN21 230 Strike, and a SEP20 225 Strike.  That's enough until I feel more comfortable with how they move.  I can adjust on the fly when the inevitable big down day comes.

I'd really appreciate some feedback but you'll have to accept my rationale for what I did to offer advice.    

I believe it is highly probably the market pulls back 10-15% in the next few weeks.  I think there is no end to what the FED will do to block a decline much more than that.  I have no intention of holding these puts more than about a month and only if the virus is getting exponentially worse.  I am not holding these puts with any confidence the market pulls back a total of 50% plus.  The market will soon enough get numb to catastrophic news like it does every correction.  A good fund manager knows there were some generational good deals onceretain stocks last week.  I could be wrong but we all have to have to have a thesis.  I'm OK with losing half my money for the benefit of the insurance.  Nowhere near enough to fully protect my port but it won't hurt my mood on a big down day.  This is just a bit of a hedge as I am very much long other than a few covered calls I sell each week.  I don't intend to make a big short bet against the market.   I am a month late doing that.  It's just outside my little box lol.  If I felt comfortable doing that I'd just just sell all my stocks and I'm not going to do that either.

You sold or bought to open? I assume you bought to open to initiate a bearish option position?

If that's the case, I think volatility will be in your favor at least once in the next several days, which is how I would play those. Wait for the first big drop day and close 'em out while implied volatility is your friend (my strategy with the UAL and recent SPY Put option purchases). As you well know, put option premiums today are sky high compared to a month ago. So, you just have to hope you got in somewhere near the apex of an upswing, and can take advantage of implied volatility on a day when it shoots down below levels where you purchased. Gambling, basically. 

[fenders53]

The gamblers are still playing. I can't even believe how much IV aids the option seller. I've been doing this every Thursday.

Take a boring high Div stock like DOW that really has no chance of exploding higher anytime soon. I just sold a bunch of covered calls again. The buyer pays me 2% for the privilege of buying the stock tomorrow for 2% above current price. For one day! As if you cant likely buy it cheaper on Monday in this market. It seems crazy. If DOW ends up a buck in the money tomorrow which I doubt, I'll roll it forward a week and take a little more premium. I completely understand how I can lose with AAPL, HD or some other high flyer because it has happened to me, but this is pretty crazy I can repeatedly do this with stocks like DOW, IP and other boring stocks with no short term catalyst whatsoever. Guess I better just enjoy it while it lasts. IV is definitely my friend right now. Just amazed what folks will pay me for a one day privilege. Makes my dividends I may or may not even get seem so trivial right now.