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Conservative option strategies, what did you buy or sell today?
#71
This week:
started selling calls against that disastrous WBA position. Very conservative ones but at least I get some income.
BAC covered call
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#72
Not a bad plan, but don't get too close to the money on WBA calls. Yeah the premiums won't be so good. Or be like me and fight to keep shares by rolling calls forward. The stuff I am doing to keep my HD and AAPL shares is a hassle. No money lost yet but a real hassle. BAC should work out for you. I have long shares and constantly straddling it with put and call sales. I got stuck with some overpriced BAC shares via put sale in DEC, but I am squirming out of it just fine because it is less volatile.
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#73
(04-04-2019, 09:24 AM)fenders53 Wrote: Not a bad plan, but don't get too close to the money on WBA calls.  Yeah the premiums won't be so good.  Or be like me and fight to keep shares by rolling calls forward.  The stuff I am doing to keep my HD and AAPL shares is a hassle.  No money lost yet but a real hassle.  BAC should work out for you.  I have long shares and constantly straddling it with put and call sales.  I got stuck with some overpriced BAC shares via put sale in DEC, but I am squirming out of it just fine because it is less volatile.

These are purely gambling for me, so I have to get something out of the WBA shares. Keeping them around and generating 3% a year on dividends is not what this money is for. I've given up on the hopes of this WBA adventure having a positive outcome so time to see what I can salvage. Big Grin

I've actually never rolled forward before. But I'll definitely take a look at it if the situation presents itself.
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#74
Rolling puts or calls forward is sometimes necessary because I am truly trying to hold these shares, and not get forced to buy overpriced shares, or sell underpriced shares at initial expiration, but squeeze extra monthly income along the way. It works in both ways. In DEC I had two MO puts WAY in the money. Rolled them a few months and they expired worthless. Sold some more time and the market moved my way. Same deal with BAC, HD and AAPL in the opposite direction. I might sell a call for $200, then buy it back for $850 and immediately resell another at a better strike for $830. The tricky part is the x-div date on a high div stock. You are asking to get exercised on a deep in the money put. That's the only time I get exercised early. Rolling forward a few weeks early is often safer. Smart traders try to avoid exercising a option that still had a lot of time value in it. I pay attention to x-div date when I sell an option. Don't sell a put with an expiration a week before x-div as it will cause you grief if the stock moves wrong.

Now stay tuned. This market was crazy and I danced my way around BAC, MET, HD, MO etc with great success. I'm in trouble on AAPL if it doesn't pull back soon. I have an option $1500 in the money and I already rolled it forward once. I'll need a miracle to not sell my shares too cheap. I expect I am going to break even on a position that would have yielded at least $1000 had I not sold a call. In the big picture I almost always make over $2K a month income on option premiums. I may give all my April income back on one just one position. The rubber band snaps in both directions for sure. I just have to stand back and consider how often the market will swing 20% in a few months. Not very often, but I have to manage it when it does. This is about damage control. Like I said, it's a hassle I have to accept. Options are a legal contract, but you can trade it in for a new contract when the story changes. Sometimes for free, sometimes you are slightly upside down to sell some more time. That's the only real point of this ramble. Selling more time cures problems quite often. That is exactly why I roll them when necessary.
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#75
Re TSLA, right now I'm leaning towards buying butterflies with a directional bias.

Tomorrow, looking to buy 17MAY19 , 260-265-255 all Put butterfly for a dime. Max profit $490. Will look to improve my odds by taking it off if it hits $125 profit.
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#76
(04-04-2019, 09:34 PM)NilesMike Wrote: Re TSLA, right now I'm leaning towards buying butterflies with a directional bias.

Tomorrow, looking to buy 17MAY19 , 260-265-255 all Put butterfly for a dime. Max profit $490. Will look to improve my odds by taking it off if it hits $125 profit.

Mike is getting fancy on us.  Smile   Does this involve four contracts, with two in the middle?  Or is the double at $265 like you typed it?  Or some other variation?  I know there are a quite a few variations of a butterfly spread.  Maybe you could explain it after you execute the trade?
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#77
(04-05-2019, 05:36 AM)fenders53 Wrote:
(04-04-2019, 09:34 PM)NilesMike Wrote: Re TSLA, right now I'm leaning towards buying butterflies with a directional bias.

Tomorrow, looking to buy 17MAY19 , 260-265-255 all Put butterfly for a dime. Max profit $490. Will look to improve my odds by taking it off if it hits $125 profit.

Mike is getting fancy on us.  Smile   Does this involve four contracts, with two in the middle?  Or is the double at $265 like you typed it?  Or some other variation?  I know there are a quite a few variations of a butterfly spread.  Maybe you could explain it after you execute the trade?

Buy 1 265
Sell 2 260
Buy 1 255

Debit $.10 per contract with max possible gain of $490.00 per contract.
While speculative in nature, the risk/reward is why I considered it for this "conservative" option trade thread.
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#78
Gotcha, I look forward to following along. Do I understand the goal of this TSLA trade correctly? You hope to catch TSLA very near 260 after some time value erodes? Then close it.
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#79
Fancy indeed!
I sold another Tesla put @ $242.5
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#80
(04-05-2019, 08:06 AM)crimsonghost747 Wrote: Fancy indeed!
I sold another Tesla put @ $242.5
That sounds conservative to me Crimson.  It's amazing a put that far out of the money is worth the trade.  IMO the cult will save you even if the fundamentals get worse.  Mike's strat actually looks pretty conservative if your life allows you to pay close attention and close the trade on time.  95% of my funds are with Vanguard in an IRA rollover and a Roth IRA.  They won't let me have that too much fun.  My TD account might, but my retirement boat goal is already met and not sure I have the guts to risk it.   With Vanguard I am allowed to sell covered calls and covered puts.  Not sure I can even buy a call. But my option trades are $3 commission so that is the upside.
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