@markbeiser wrote:
@FicoMike0 wrote:I look for stocks with more than 100% volitility, but demonstrate modest long term change.
I'm still working on how to evaluate stocks for options trading.
I've always been a long term buy and hold person, so not sure I'm ready to jump into trading options on any stocks I would not have otherwise liked to own long term.
Learning supply and demand here will help for your entries and exits. If the plan might not play out right away youre gonna want to buy time. 6 months and out of the money might not make you a millionaire but you might just be able to put on a stress free trade.
@Im-back
I chickened out on MSTR for now.
Not enough cash in my account to buy it outright, and am not willing to borrow to buy something I may get stuck holding if the price goes way down because Bitcoin went down, and/or the CEO decides to sell a bunch of shares, which he has registered to do.
@Blender
Doing a wheel strategy, selling cash covered puts, then if assigned, doing a covered call at the strike price I was asigned at. Goal isn't to own the stocks, just collect premiums, but I'm doing it on stocks I wouldn't mind buying and holding for a while.
Also selling covered calls on shares of stocks I own.
Selling the calls way out of the money because I don't really want to sell them, but a few extra bucks in my IRA to work with sure will help.
I did get a little greedy and sell 1 covered call on 100 shares of Tesla in my brokerage account at a lower strike than turned out to be safe, which is why I rolled it up and out a week, but then Tesla really shot up Friday, so I just bought the contract back because it was cheaper than the tax would have been. Not risking it again.
I wouldn't have minded if it was in the tax free environment of my Roth IRA, as I've got a little over 1k shares in there.
I'm not approved for doing more than share/cash covered calls and covered puts with Merrill, and don't plan on asking for more until I learn a lot more, though I would like to have access to LEAPS...🤔
@Blender wrote:
Single options are tradeable and most traders dont exercise.
When I bought back the option on TSLA, it was about $5 over the break even for whoever bought the call, and would have been >$10 above by market close, so I can't imagin it not being exercised. Between the iniial premium, net more premium to roll it up and out the first time, then the cost to buy it back, the whole thing was about a $500 loss.
In my head I'm filing it away as a $500 expense to add to my extensive MIT education. (Mistakes I've Tried)
@Blender @Im-back
Something happened this week that I'm equal parts confused and excited about.
I sold 6 puts on PLTR at the $78 strike for $2.23/share on Monday, and despite the closing price ending up being $76.06 I got assigned on all 6.
Somebody lost $0.30/share on the trade, which is the part that confuses me.🤔
I also got assigned 200 shares of HOOD at a similar net profit on the trade.
The part that excites me is that PLTR got added to the NASDAQ 100 Friday night!😀
@FicoMike0 wrote:Using my strategy, id sell a covered call on pltr 78 for $2.58 on monday.
Since it is freshly added to the NASDAQ 100, I'm pausing the wheel and holding it for now.
There will be a huge frenzy of activity on it next week because all of the NASDAQ 100 based funds have to buy into it by 12/23.
By opening on Monday it will likely already be above the $78 strike.
I'm not one of the people that thinks PLTR will 10x in 2025, but I'm expecting to collect substantially more than just a call premium on this one.😉
Selling more puts on it next week may be a safe way to collect some premiums, but it remains to be seen if there is much interest in buying them.
@FicoMike0 wrote:Pltr 78 put is listed now at 4.40. If it sells for that in Monday morning and pltr closes above 78 on friday, that's a $440 profit on $7800 invested for one week. 5+% in a week is pretty good.
The options chain will likely look very different come Monday, will have to see where the stock runs in the overnight and pre markets Sunday night and Monday morning. If there is a lack of demand, the ask prices for puts will go down.
I do plan on selling more puts on it, but I'll play wait and see before I decide anything on covered calls.
If you think the premiums for puts on PLTR look juicy, check out SOUN!
I've sold 2 puts on it for each of the past two weeks, 1 in my IRA, 1 in my CMA, and already made about $2.40/share on a currently $17 stock.
It is a good company, but I don't think the recent growth in share prices is rational.
It is a company successfully implementing an actual working AI solution for commercial customers though, so who knows what a rational price for it is anymore.
Imagine being a restaurant/drive through that can take orders in the customers preferred language, and the order taker NEVER forgets, or is too busy to suggest the upsale items.
It is a cheap(ish) stock, so I'll keep going with it, but I'm not going to risk more than I have been on it.