I was today old when I learned...

[Im-back]

A couple years ago I felt pretty smart and started selling covered call contracts. Eight months later I had nine contracts called for a company that everyone would recognize. Shortly after I realized even focusing full time, I can't compete against the institutional investors. Shortly after, I stopped trading options and haven't looked back. 

If your feelin extra sporty I suggest you start playing with MSTR options. Now that SEC has started allowing bitcoin options it like gasoline has been thrown on MSTR. Me, I'm too faint of heart. 

[markbeiser]

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@Im-back wrote:

A couple years ago I felt pretty smart and started selling covered call contracts. Eight months later I had nine contracts called for a company that everyone would recognize. Shortly after I realized even focusing full time, I can't compete against the institutional investors. Shortly after, I stopped trading options and haven't looked back. 

If your feelin extra sporty I suggest you start playing with MSTR options. Now that SEC has started allowing bitcoin options it like gasoline has been thrown on MSTR. Me, I'm too faint of heart. 

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Yeah, I fully accept that there is no way I can compete with proffessional investors, not now or ever, especially not institutional ones who can and do manipulate markets in their favor.
I'm just after the table scraps for the most part.
Your story about getting all your shares called away is the kind of thing I'm considdering about my Tesla positions, I don't actually want to lose them, so I may end up only playing with 1 call and 1 put at a time.

I looked at MSTR, holly cow the premiums look tempting, but it is the kind of stock that can wreck you in a flash, so no, just no.

[IsambardPrince]

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@markbeiser wrote:

...that you can trade options inside a Roth IRA!
24 years of contributing to it, and I never knew this.

Of course I only started learning about how to do options trading when I was 2 weeks ago old, and don't know enough to fully realize what I don't know yet, so I'm not going crazy with this new found knowledge.
I at least try to be self aware enough to not be in contention for any Dunning-Kruger "Top Left" awards!🤣

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Unfortunately Walmart's 401(k) is inside Bank of America, which is utter crap. They listed my spouse as "Female" when he is a man and then made us talk to Walmart HR about fixing even that. Every once in a while you log in and it says the account balance is $0. Then it's back.

They have passive funds, and they pretty much all suck. They even have a bond fund that somehow manages to underperform AGG.

I'm sure that Walmart works with BofA even though they're terrible because they took bids on who would charge the lowest fees to Walmart, of course BofA is always reaching in and grabbing management fees for their funds that underperform.

I wish there were some active ways to day trade other than moving money around some funds. Employers could work on this, but I doubt they ever will. The law should let you direct retirement contribution matches to wherever you want them.

About the only reason why switching us over to a Roth might make sense is if our taxes fall so much due to wages not keeping up with inflation (which has been happening, a lot) that we're left with no real tax burden anyway and so a Roth means tax-free growth, and that's a real possibility in the next few years I think.

If taxes fall to zero or very close, probably the only place for them to go in the future is up.

The problem with the Incoming Regime's tax and spending programs is that it'll be a national version of Illinois Governor Edgar's "Pension Holidays/Ramps" (AKA, the "Edgar Ramp") and "Tax Deferrals" back in the 90s, and then it's raining crap on us 30 years later. The only solution becomes higher and higher taxes when the adults are back in the room and the bills come in.

Just as the Edgar Ramp didn't mean the State of Illinois didn't owe pensions, tax cuts don't mean that the federal government will spend less or not incur bills. It just means that the bill comes later, with sharp tax hikes.

So what does that mean for a 401(k) or 403(b)?

It means that if tax policy drops your tax rates significantly over the next 10 years or so, consider switching to Roths for new contributions and then switch back to Traditional later on if the rates go up again. Traditional doesn't help if you don't owe taxes, but you will owe tax later if your investments grow.

For most people, the real value in a company-matched retirement account is the match and tax optimization, which lets them double their contributions and shield them from taxation (either now or later), not so much the growth in the indexes. 

If you go by growth in the indexes over the last 4 years, then your investments didn't actually grow at all, they just got repriced in inflated Dollar terms.

People baked in a set of assumptions, which assumed that the federal government would be stable enough that our money didn't turn into something like a banana republic's and now that that assumption did not hold, they come back out of retirement looking for work.

[FicoMike0]

@markbeiser 

That's part of my stratagy. I see a stock at $7.25 would I buy it at $6.50? If so, I sell a $6.50 put on it. I usually go with an expiration a week away. With no change in stock price, every day that passes after I sell, the option is worth less. If it expires worthless, no lose. If I'm assigned, I'm selling a covered call at the same strike price. As long as the bottom doesn't fall out, I make money.

[markbeiser]

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@IsambardPrince wrote:

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Unfortunately Walmart's 401(k) is inside Bank of America, which is utter crap. They listed my spouse as "Female" when he is a man and then made us talk to Walmart HR about fixing even that. Every once in a while you log in and it says the account balance is $0. Then it's back.

They have passive funds, and they pretty much all suck. They even have a bond fund that somehow manages to underperform AGG.

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Do they not let you select how to allocate your investments in the 401k, or is it just that the selections suck?

28 years ago I worked at a place with a 401k plan, and they gave us a choice of letting the fund manager allocate things for you, choosing from a list of things they recommended, or with restrictions on how often you could make changes, picking what ever the heck you wanted and the percentages of contributions to each thing.

Until a couple of years ago I had my Roth IRA in a managed account, glad I ignored their strong recommendation against it when I directed them to switch $15k over to 60 shares of Tesla stock in 2019, as that has become 900 shares!
I switched to a self directed account in 2022 and have been very happy not paying someone to adhere to their "fiduciary responsibility" rules.

[markbeiser]

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@Im-back wrote:

If your feelin extra sporty I suggest you start playing with MSTR options. Now that SEC has started allowing bitcoin options it like gasoline has been thrown on MSTR. Me, I'm too faint of heart. 

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I don't know if I should thank you or curse you for bringing up MSTR, but I've been looking into it all day and have half talked myself into YOLOing a 1 week put for 1 contract of it.
The premiums, for puts way below and calls way above the strike price are just crazy...

[IsambardPrince]

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@markbeiser wrote:

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@IsambardPrince wrote:

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Unfortunately Walmart's 401(k) is inside Bank of America, which is utter crap. They listed my spouse as "Female" when he is a man and then made us talk to Walmart HR about fixing even that. Every once in a while you log in and it says the account balance is $0. Then it's back.

They have passive funds, and they pretty much all suck. They even have a bond fund that somehow manages to underperform AGG.

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Do they not let you select how to allocate your investments in the 401k, or is it just that the selections suck?

28 years ago I worked at a place with a 401k plan, and they gave us a choice of letting the fund manager allocate things for you, choosing from a list of things they recommended, or with restrictions on how often you could make changes, picking what ever the heck you wanted and the percentages of contributions to each thing.

Until a couple of years ago I had my Roth IRA in a managed account, glad I ignored their strong recommendation against it when I directed them to switch $15k over to 60 shares of Tesla stock in 2019, as that has become 900 shares!
I switched to a self directed account in 2022 and have been very happy not paying someone to adhere to their "fiduciary responsibility" rules.

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The funds are just bad.

[Realist]

I see what you guys are doing here, so I'll ask the following question.  Either you are already doing this and know this by default, or you aren't taking advantage of maximum opportunity available to you.  I've heard no one mention in this topic.

Do you guys know how to chart read or how to apply TA?  If you don't, I would recommend you learn.  It's like a looking glass into the likelihood of stock market movements, and while it's not 100%, it's absolutely more solid than nothing at all.

I can look at a stock chart, toss up a few indicators and overlays, and make an educated guess to decide what the stock is most likely to do.  This in turn, whether up or down, allows you a bit more confidence in your options strat.  I'm a fan of taking advantage of maximum potential, when possible.  I highly recommend, and apologize if you already utilize this.

[markbeiser]

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@Realist wrote:

I see what you guys are doing here, so I'll ask the following question.  Either you are already doing this and know this by default, or you aren't taking advantage of maximum opportunity available to you.  I've heard no one mention in this topic.

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I'm just taking my first steps into it, so have a lot to learn.
I'm not trying to maximize gains at the moment, just keeping it simple so I don't blow anything up.
I've been doing DCA long time on stocks I wanted to keep long term, and never even looked at options trading, so have a LOT to learn, it requires a very different way of looking at stocks.
Now I'm 56 and on plan to retire at 62, or maybe sooner, so need to learn how to replace my income.

[Im-back]

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@markbeiser wrote:

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@Im-back wrote:

A couple years ago I felt pretty smart and started selling covered call contracts. Eight months later I had nine contracts called for a company that everyone would recognize. Shortly after I realized even focusing full time, I can't compete against the institutional investors. Shortly after, I stopped trading options and haven't looked back. 

If your feelin extra sporty I suggest you start playing with MSTR options. Now that SEC has started allowing bitcoin options it like gasoline has been thrown on MSTR. Me, I'm too faint of heart. 

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Yeah, I fully accept that there is no way I can compete with proffessional investors, not now or ever, especially not institutional ones who can and do manipulate markets in their favor.
I'm just after the table scraps for the most part.
Your story about getting all your shares called away is the kind of thing I'm considdering about my Tesla positions, I don't actually want to lose them, so I may end up only playing with 1 call and 1 put at a time.

I looked at MSTR, holly cow the premiums look tempting, but it is the kind of stock that can wreck you in a flash, so no, just no.

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Only got 1/3 called. But it still stung. Still stings. Big taxable gain and lost opportunity.