02-16-2019, 01:26 PM
(02-16-2019, 07:59 AM)crimsonghost747 Wrote:Please do not misinterpret my tone. It is not my intent to anger you and your last post gives me that impression.(02-16-2019, 06:11 AM)fenders53 Wrote:(02-16-2019, 03:54 AM)crimsonghost747 Wrote: I am very much a believer in the fact that if you choose your companies correctly, then over the long term it doesn't make a big difference if your entry point was $45 or if you managed to bring it down to $44 with a succesfull option strategy. Sure the latter is better, especially if you can do it consistently, but is it worth potentially missing oMy last post on this thread. We can blow up an option trading thread if you wish
Long story very short: Just because you made a profit it doesn't mean that it was the right move to make.
And briefly (if I am even capable of that lol) ....
By the above logic any stock we buy now is a mistake because it was cheaper five years ago?
No. I'm saying 5 years ago it would have been a mistake to sell a put that didn't get assigned vs just buying the stock. Pretty much any stock. I can't look to the future, otherwise I'd tell you what the price of KO will be on 16th of February 2024 and then we would know if the put was a better idea than just buying at $45.24. (Friday's close) Of course if it gets assigned then it's all good for you, and I certainly hope it goes that way.
If you think KO is a good play going forward then I really hope you do get assigned. Right now you are looking at a difference of $0.24 per share between the current price and your strike. If KO keeps executing well (which you seem to believe in) then it would be a big loss if you missed out on a good run because you wanted to get in with a put at $45 instead of going in straight at $45.24.
KO is just used as an example. I guess I'm just not a big fan of giving up your options (in both meanings of the word) unless you are very confident on the direction the stock is going short term.
I'm not sure why we are talking about KO but KO just blew their quarter. You may have missed the earnings report details a few days ago? I do not believe KO is going to run hard for quarters. But I do believe it remains a Wall Street darling with downside protection. 100 shares is under 1% of my port. I'll save my real stress for my high beta stocks like APPL and AMZN because those positions are large. Worth more than my first house. I took a beating going long in KHC and MO and those concern me as well. The point is I am not trying to pretend I have a perfectly executed plan, but here are some facts I know to be true personally.
-I can't speak for Mike but I am not telling you to employ this strategy with all your assets, though I honestly wish I had. You could end up 100% invested in equities in a severe market. It's OK if you don't do it at all, but we do believe strongly you should give it a fair try when you have the resources. It's not because we got lucky once or twice. After 100 or so put sales in WIDELY varying markets you realize this isn't a bad plan.
- About 25% of my port is committed to this strategy. I got real serious about doing it in volume SEP 18. Not great timing as the market is down about 5% since then?
-This part of my port has yielded an 18% return since SEP 18. That works for me annualized. I'm very OK with that because my cashy stuff yields under 3% and lets not talk about my long positions because they were negative.
-DEC 18 was horrible. The worst market in about a decade I think. You would think I would be assigned in most every position. That's not what happened. I was assigned shares of MO, BAC, MET, ABT, KHC In DEC. Some bounced, some didn't, we can't see the future, especially short term so irrelevant.
-The reality is it's a high monthly income yielding strategy that far exceeds dividend payments, but eventually puts you long so I choose solid stocks. After seeing the level of income, I will continue to be very patient going long.
We really should move this to the other thread if you wish to continue.