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Anyone using covered puts
#11
(09-05-2018, 09:59 PM)NilesMike Wrote:
(09-01-2018, 04:14 PM)fenders53 Wrote:
(09-01-2018, 03:08 PM)NilesMike Wrote: Some drawbacks are that you can only do it round lots of 100 shares.

You will not participate in the stock price growth.

A plus is you will far exceed 2-3X any dividends with the put selling.

Appreciate the input.  I often buy round lots.  But I am definitely NOT scheduling $20-30K stock purchases 30-45 days in advance.  The premium may look good but too much can happen to change the story when going past a month at times.

Are you only selling weekly puts?

No, you can't get premiums to make it even close to worth it for most DGI stocks if you go under a month.   I'm not making a 100 share commitment for $20 premium.  Easier to wait for a down day and head straight to covered calls.  That changes of course when volatility returns someday.  My comment above was more related to AAPL.  100 share assignment will set you back $22K+.  After a pullback then a covered put makes more sense to me. Not at lofty valuations after the market has run for a few months and the stock is approaching overbought.   I have not had much luck getting a put trade to execute at my price lately when I try to squeeze the last $10 on a limit order.  I'll continue to try to make it happen on my terms.
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#12
(09-05-2018, 10:45 PM)fenders53 Wrote:
(09-05-2018, 09:59 PM)NilesMike Wrote:
(09-01-2018, 04:14 PM)fenders53 Wrote:
(09-01-2018, 03:08 PM)NilesMike Wrote: Some drawbacks are that you can only do it round lots of 100 shares.

You will not participate in the stock price growth.

A plus is you will far exceed 2-3X any dividends with the put selling.

Appreciate the input.  I often buy round lots.  But I am definitely NOT scheduling $20-30K stock purchases 30-45 days in advance.  The premium may look good but too much can happen to change the story when going past a month at times.

Are you only selling weekly puts?

No, you can't get premiums to make it even close to worth it for most DGI stocks if you go under a month.   I'm not making a 100 share commitment for $20 premium.  Easier to wait for a down day and head straight to covered calls.  That changes of course when volatility returns someday.  My comment above was more related to AAPL.  100 share assignment will set you back $22K+.  After a pullback then a covered put makes more sense to me. Not at lofty valuations after the market has run for a few months and the stock is approaching overbought.   I have not had much luck getting a put trade to execute at my price lately when I try to squeeze the last $10 on a limit order.  I'll continue to try to make it happen on my terms.

Selling a put or buying covered calls is synthetically the same position. Except that selling a put has less commission..

I agree to wait for a pullback, better stock price and a likely bump in volatility gets you a better premium on the put.

One does not need to get assigned, you can buy back the put at a loss or roll it further away and further out in time.

Selling puts beats buy and hold.
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#13
(09-06-2018, 06:09 AM)NilesMike Wrote:
(09-05-2018, 10:45 PM)fenders53 Wrote:
(09-05-2018, 09:59 PM)NilesMike Wrote:
(09-01-2018, 04:14 PM)fenders53 Wrote:
(09-01-2018, 03:08 PM)NilesMike Wrote: Some drawbacks are that you can only do it round lots of 100 shares.

You will not participate in the stock price growth.

A plus is you will far exceed 2-3X any dividends with the put selling.

Appreciate the input.  I often buy round lots.  But I am definitely NOT scheduling $20-30K stock purchases 30-45 days in advance.  The premium may look good but too much can happen to change the story when going past a month at times.

Are you only selling weekly puts?

No, you can't get premiums to make it even close to worth it for most DGI stocks if you go under a month.   I'm not making a 100 share commitment for $20 premium.  Easier to wait for a down day and head straight to covered calls.  That changes of course when volatility returns someday.  My comment above was more related to AAPL.  100 share assignment will set you back $22K+.  After a pullback then a covered put makes more sense to me. Not at lofty valuations after the market has run for a few months and the stock is approaching overbought.   I have not had much luck getting a put trade to execute at my price lately when I try to squeeze the last $10 on a limit order.  I'll continue to try to make it happen on my terms.

Selling a put or buying covered calls is synthetically the same position. Except that selling a put has less commission..

I agree to wait for a pullback, better stock price and a likely bump in volatility gets you a better premium on the put.

One does not need to get assigned, you can buy back the put at a loss or roll it further away and further out in time.

Selling puts beats buy and hold.

It sure can when the market runs in the proper direction.  I sure try to figure it out but I'm often wrong when I think I know where the market is going next week.  I don't aspire to be the option king but judicious use of them adds income along the way,  That said I did sell a KHC put today.  A stock I'd like to own a larger position of at a lessor price and if not I picked up a nice premium.  I am mixing things up.  Long positions, CC positions and some put sales.  I'll sort it out.  it's nice to have something working no matter which direct the market heads short term.  If the market makes a real drop I will be all over some puts as I want long positions in the end.  Most of my put sales are only 1-2 contracts so it isn't worth it to me to chase tiny premiums.
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#14
Sold a single contract of MMM OCT 19 210 strike put for $410. I have wanted to own the stock since forever. I will do this again if the contract expires worthless, or perhaps I roll it forward if that ends up making sense next month. As I said I have little experience selling puts but I like it so far.
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#15
Sold a JNJ 130 put and an SO put as well. I'll be quite surprised if the JNJ put is assigned to me but the SO has a chance. I'm producing some cash flow either way and hope to own both of the stocks eventually. Still chasing the elusive T puts. Hopefully I'll find the right moment eventually.
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#16
Looks like you'll be fine because of your strategy. Selling puts to get the stock at a discount or keep the premium.

High class problems.
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#17
(09-07-2018, 06:15 PM)NilesMike Wrote: Looks like you'll be fine because of your strategy. Selling puts to get the stock at a discount or keep the premium.

High class problems.

Definitely first world problems.  I am trying to buy MMM under 210 because I missed my chance to buy it at 110 long ago.  Smile  I got here trying to keep my basis low and I'll continue to enter positions that way.  No doubt I will regret being cheap along the way.  More than a few opportunities have gotten away from me.  I want to document my trades here.  Then I will look back in six months and evaluate my decisions for better or worse.
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#18
Sold a few more cash covered puts this week. MET, CSCO, and another SO contract. Someday I'll actually be long on most of these companies then we'll explore CCs where it makes sense.
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#19
Sold my first put in a long time. OMC at 67.5
It's a win-win situation since I don't really mind if it gets assigned, I feel like jumping on board with this company. (though maybe with 40 or 50 shares instead of 100)
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#20
Good for you Crimson! It only fails you when you fall in love with option premiums and subject yourself to long position risk in a stock you don't wish to own long-term anyways. Same goes for CCs. If you don't really want to own the stock for five years then don't buy 100 shares just to sell calls or you'll find yourself in a bad spot before you know it. Been there and felt the pain. It doesn't always work out but but more often then not if you get assigned the position is oversold. Fair chance you can dump half the assigned shares if you desire. I have a few positions where that may happen if I get assigned. Mostly I stick to positions where I am good with 100 shares. I have a lot of cash to deploy so this is a special situation for me.
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