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Conservative option strategies, what did you buy or sell today?
#31
Would this be the morning to sell puts at super low strike price on KHC? (Like $30?) Or just waaaay too toxic / risky until we have more information on how all this plays out?
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#32
(02-22-2019, 09:48 AM)Kerim Wrote: Would this be the morning to sell puts at super low strike price on KHC? (Like $30?) Or just waaaay too toxic / risky until we have more information on how all this plays out?

I'd wait a couple days.  This one is not going to run away from you in any significant way.  I'll edit this post in a few with my KHC option trades.

EDIT: It rained lemons on my remaining 100 KHC shares. Some poor guy took my other 100 shares last Friday when my sell expired 25 cents in the money. I'd like to just sell it all and ban myself from the stock forever. Did this instead. I had an APR Strike 50 call sell open. It went worthless today so I bought it back for $3 to clear the way for a new call sell. Just sold a MAR 37.50 cover call for $60. I will consider selling a put in a few days. I need to sleep on that. Too many unanswered questions and people will be looking for the exit. KHC could drop another 10% and I am not going to get burned bad again.

Kerim your $30 strike is proper thinking though. That option premium will likely get better in a day or two but we never know. I may be angry now but KHC is deal at some price.
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#33
Looks like no one is doing any option trading? :p

I didn't find any good deals in my regulars, so this week it's time to try something new and exciting and super risky!
Sold 2x ACB puts for Friday with a strike of $7. I got $20 for each so that's a 2.85% premium in a week.

As always for me, this is a pure trade. If they get assigned then I'll just cover call the shit out of them until they are gone.
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#34
(02-25-2019, 10:12 PM)crimsonghost747 Wrote: Looks like no one is doing any option trading? :p

I didn't find any good deals in my regulars, so this week it's time to try something new and exciting and super risky!
Bought 2x ACB puts for Friday with a strike of $7. I got $20 for each so that's a 2.85% premium in a week.

As always for me, this is a pure trade. If they get assigned then I'll just cover call the shit out of them until they are gone.
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#35
Let us now how that one turns out.  It's been very slow for me, but I'll not complain too much about this market.  Smile  I've been stuck working a lot the past few weeks and and the market has been right for much put buying.  I should see a few covered calls later in the week   I gave to be careful now that the market only goes up every day lol.  I don't mind rolling a few calls forward, but a bunch of once is a hassle.
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#36
Here is an example of patience paying off when you sell a call on a stock you don't wish to sell, but are just trying to boost income. Lately this plays out favorably on a stock or two for me most every month. It requires some courage and the stock better be quality so it is somewhat predictable on the downside. As it applies to covered calls, we never know when a stock we wish to hold and are just trying to steal some premium on will run up WAY faster than we planned. Here is an example for Crimson to critique lol.

HD runs up fast near 180 from the high 160s I sell a call about a month out at strike $185 for only only $143. This is easy money. I can't lose since it is way overbought already right? $143 is a really nice three week monthly "dividend". It looked so good on paper lol.

So option is expiring last Friday I roll it forward. HD is like +$7.50 in the money and there is no hope I won't be exercised tonight. I buy back that call for $740! This $600 paper loss really, really sucks but I know I can resell a Mar 190 for $626 and buy some time and get back to even for now. I am now up like $20 by some miracle and endured the stress of missing the HD run trying to not sell my shares WAY under-market. But I still got my shares. I thought HD earnings would be mediocre and oh look that $626 call drops to way under $200 on the dip today, only a week later. Good chance it expires near worthless if I hold. I could retire it now and make a couple % overall. Certainly not how I planned it but the point is this requires some nerve, and you must be dealing with quality stocks or you lose in the end. Puts or call sales matters none when you bet wrong. I was WAY in the red on MO, MET, XOM, PRU etc. I was ridiculously under water on MO. Losing on MO would stink, but it was thousands had I panicked only weeks ago. It's a high probability you can dance your way out of a deep in the red play by selling time until the market or stock bounces. This rarely works with garbage stocks. Quality will save you with patience. I have never had to do it for more than a few months, but I would roll forward many months if I had to.

Yeah this option drama is not for everyone. The overall income makes it endurable for me every month. Hasn't failed me yet in some real bad months. I only SELL options and remain convinced the odds make me a winner over time, as long as I remain rational when it gets very ugly.
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#37
(02-26-2019, 10:27 PM)fenders53 Wrote: Here is an example of patience paying off when you sell a call on a stock you don't wish to sell, but are just trying to boost income.  

Wasn't your number one rule not to sell a put in a company you don't want to own? Isn't selling a call in a company you don't want to get rid off kinda the same thing?  Tongue

But I have my own trades to criticize too hehe. ACB ran up 10% in the past two days. This stock moves lightning fast so anything is possible but I'm just saying that going long would have given me 10% in 2 days instead of the 2.85% in 5 days that I'm looking at now. And I still have 3 days of risk to absorb as closing the position early doesn't really seem to work with this one. (and this is one of those stocks where a 10% drop in a day is very much possible)

A more regular trade: covered call play with WBA
Went in at $71.36. Sold a $72 call for 8th of March.
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#38
(02-27-2019, 01:31 AM)crimsonghost747 Wrote:
(02-26-2019, 10:27 PM)fenders53 Wrote: Here is an example of patience paying off when you sell a call on a stock you don't wish to sell, but are just trying to boost income.  

Wasn't your number one rule not to sell a put in a company you don't want to own? Isn't selling a call in a company you don't want to get rid off kinda the same thing?  Tongue
No, it's not the same thing.  OK, maybe it is. I knew something like that was coming from you.   Big Grin 

Seriously though, the "have my cake and eat it too trick" was complicated this month.  I don't wish to deal with it constantly, with a handful of stocks.  It's just become a market of extremes.  I think everybody here expected the market to bounce, and nobody expected it to go up everyday for months, barely stopping long enough to take a breath.

I thought both my AAPL and HD shares were goners.  I waited for them to run way up before I sold the calls.  I guess the only point I was trying to share is you can often squirm out of expiration. The best compromise is probably to not have calls sold against some of your shares like I do with T.  Unfortunately I don't have a couple hundred extra shares of AAPL laying around lol.  I'll have to be more careful with my expensive shares. I wouldn't be happy if AAPL ran $40 in a month and left me behind.  That is something I consider possible. 

There isn't any doubt that selling puts and calls is much easier to manage in a flat or even a choppy market.  A whole lot easier to do that buy high-sell low thing.   I really don't mind rolling puts forward a few times to get in near a bottom.  MO and XOM are not so volatile (usually), and it is much easier to manage.
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#39
(02-27-2019, 07:54 AM)fenders53 Wrote:
(02-27-2019, 01:31 AM)crimsonghost747 Wrote:
(02-26-2019, 10:27 PM)fenders53 Wrote: Here is an example of patience paying off when you sell a call on a stock you don't wish to sell, but are just trying to boost income.  

Wasn't your number one rule not to sell a put in a company you don't want to own? Isn't selling a call in a company you don't want to get rid off kinda the same thing?  Tongue
The best compromise is probably to not have calls sold against some of your shares like I do with T.  Unfortunately I don't have a couple hundred extra shares of AAPL laying around lol.  I'll have to be more careful with my expensive shares. I wouldn't be happy if AAPL ran $40 in a month and left me behind.  That is something I consider possible. 
Yeah if you happen to own 400+ shares then messing around with a call or two becomes possible without sacrificing your whole position. I can count quite a few situations recently where I've looked into it, knowing very well I can't do it because I only own 100 shares or less. 

Either I need to get rich or some of my companies have to do a split.  Blush
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#40
(02-27-2019, 08:04 AM)crimsonghost747 Wrote:
(02-27-2019, 07:54 AM)fenders53 Wrote:
(02-27-2019, 01:31 AM)crimsonghost747 Wrote:
(02-26-2019, 10:27 PM)fenders53 Wrote: Here is an example of patience paying off when you sell a call on a stock you don't wish to sell, but are just trying to boost income.  

Wasn't your number one rule not to sell a put in a company you don't want to own? Isn't selling a call in a company you don't want to get rid off kinda the same thing?  Tongue
The best compromise is probably to not have calls sold against some of your shares like I do with T.  Unfortunately I don't have a couple hundred extra shares of AAPL laying around lol.  I'll have to be more careful with my expensive shares. I wouldn't be happy if AAPL ran $40 in a month and left me behind.  That is something I consider possible. 
Yeah if you happen to own 400+ shares then messing around with a call or two becomes possible without sacrificing your whole position. I can count quite a few situations recently where I've looked into it, knowing very well I can't do it because I only own 100 shares or less. 

Either I need to get rich or some of my companies have to do a split.  Blush
Yes, being rich would make this a whole lot easier lol.  I do have 200 shares of quite a few companies.  Sometimes I do have calls sold against all shares.  Of course our stock, or overall timing will be very flawed at times.  So why would I sell both calls on the same day, rather than stagger the contracts weeks apart?  Oh yeah, to save literally just two dollars on commissions by making it one trade.  I shake my head at myself sometimes.  Smile  Anytime you have the chance to spread the risk of being a bonehead, we must do it.
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