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Forum » **OFFICIAL** Trading and Investing Thread- Part -XII- Money Printer Go BRRRRRRRR
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Thread: **OFFICIAL** Trading and Investing Thread- Part -XII- Money Printer Go BRRRRRRRR

post 1627115393 12-31-2020, 12:15 PM
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#6961
  1. chino3
  1. chino3
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Originally Posted By TugOfPeace⏩
I’m roughly 1200 shares deep, cost basis @ roughly $27. I think I need to get approved for options trading to do what you suggested - looking at the options menu on mobile though, still trying to decipher what this stuff means
go to your trade screen, then next to STOCKS there should be OPTIONS, do you have that?



Also, if you were to sell a covered call on all 1200 stocks with a CB of $27, strike price of $30 the premium is $1.6 for 2/19 exp

Let's say it goes to/above $30 at exp, you will have a total return of 18% or $5520!

If it doesn't and expires worthless, you get to keep the full $1920 in premiums. Rinse repeat.
"It won't get better, just different."
post 1627115423 12-31-2020, 12:15 PM
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#6962
  1. Heaney
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  1. Heaney
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Originally Posted By chino3⏩
Also, I don't know how twitter works, but I started following this guy recently because ho lee fook!

That tesla price target tweet is legit 10/10 gold.
post 1627116213 12-31-2020, 12:25 PM
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#6963
  1. TugOfPeace
  2. 1012 ng/dl
  1. TugOfPeace
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Originally Posted By chino3⏩
go to your trade screen, then next to STOCKS there should be OPTIONS, do you have that?



Also, if you were to sell a covered call on all 1200 stocks with a CB of $27, strike price of $30 the premium is $1.6 for 2/19 exp

Let's say it goes to/above $30 at exp, you will have a total return of 18% or $5520!

If it doesn't and expires worthless, you get to keep the full $1920 in premiums. Rinse repeat.
Yep I have that, I just spent the time since I posted last, learning about it - I'm not approved for options, but I just submitted a request and they said I am approved for covered calls and a couple other things. The approval should supposedly take one day.

I was just exploring a similar scenario to what you suggested - I think I understand it well now, but that's insane. There has to be some crazy risk in the background that I'm not aware of, right?

Someone else in my daytrading thread was explaining the same thing you just did.. maybe I'll go back and reread what he wrote, because I just asked the same question there.

Gotta say, been trying to figure out how this works but now that I understand it.. this stuff is fascinating. Way more interesting than what I do for a living.

Edit Hypothetically - if I did the covered call on 2/18 for a strike price of $35.00, premium of $.86, for 1200 contracts - that would mean if it reached $40, I would make (($35-$27)*1200) + ($.86*1200) = $9600 + $1032 = $10,632..

What happens if the share price reaches something ridiculous like $12? I'm guessing you'd just eat the loss on your shares but keep the premium. Or the strike price hits before expiry. Hm I'll do some research.
Monster0ultra self proclaimed "Chad" face pic looks like vtech school shooter: https://i.imgur.com/z2m6Why.jpg
post 1627116543 12-31-2020, 12:28 PM
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#6964
  1. Heaney
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Originally Posted By TugOfPeace⏩
Yep I have that, I just spent the time since I posted last, learning about it - I'm not approved for options, but I just submitted a request and they said I am approved for covered calls and a couple other things. The approval should supposedly take one day.

I was just exploring a similar scenario to what you suggested - I think I understand it well now, but that's insane. There has to be some crazy risk in the background that I'm not aware of, right?

Someone else in my daytrading thread was explaining the same thing you just did.. maybe I'll go back and reread what he wrote, because I just asked the same question there.

Gotta say, been trying to figure out how this works but now that I understand it.. this stuff is fascinating. Way more interesting than what I do for a living.
I watched a pretty good video on this sort of thing because I'm in the same boat as you, highly suggest plugging "selling covered calls" into youtube if you have some time free.
post 1627116693 12-31-2020, 12:31 PM
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#6965
  1. topperstyle
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Volume ..
post 1627116773 12-31-2020, 12:32 PM
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#6966
  1. usersignup2
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STO
PLTR 5X Jan08 23.50 P
post 1627117013 12-31-2020, 12:35 PM
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#6967
  1. Carbonfibre
  2. Rubber Banding
  1. Carbonfibre
  2. Rubber Banding
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who wants to play casino end of day.


analyst reports coming Monday.

https://www.bloomberg.com/news/artic...rage-next-week


imo

DASH = shiit ipo could drop

ABNB = could plow






post 1627117133 12-31-2020, 12:36 PM
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#6968
  1. usersignup2
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Originally Posted By TugOfPeace⏩
Edit Hypothetically - if I did the covered call on 2/18 for a strike price of $35.00, premium of $.86, for 1200 contracts - that would mean if it reached $40, I would make (($35-$27)*1200) + ($.86*1200) = $9600 + $1032 = $10,632..

What happens if the share price reaches something ridiculous like $12? Or the strike price hits before expiry. Hm I'll do some research.
This is your friend
https://www.optionsprofitcalculator.com
post 1627117343 12-31-2020, 12:39 PM
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#6969
  1. MotorCityCobra
  1. MotorCityCobra
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I basically bough PLTR & ARKK at the top recently and now im deep in red. planned on buying more but i just started investing and dont want to lose it all. come february will PLTR moon or continue this downward trend? any of u buying this dip?
post 1627117633 12-31-2020, 12:42 PM
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#6970
  1. Carbonfibre
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  1. Carbonfibre
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someone has death wish or just hates money.

$1 million in total buy VIX March 17 2021.

100 strike
150 strike

even during the worst market shut down in March VIX was 80 at peak.

100 strike would require war with iran or north korea

something crazy.
post 1627117723 12-31-2020, 12:43 PM
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#6971
  1. Heaney
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If QS put premiums werent so pricey I'd be in big on them. Already over valued by probably 10x and just announced that they registered to sell an additional 300M shares.
post 1627118343 12-31-2020, 12:51 PM
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#6972
  1. chino3
  1. chino3
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Originally Posted By TugOfPeace⏩
Yep I have that, I just spent the time since I posted last, learning about it - I'm not approved for options, but I just submitted a request and they said I am approved for covered calls and a couple other things. The approval should supposedly take one day.

I was just exploring a similar scenario to what you suggested - I think I understand it well now, but that's insane. There has to be some crazy risk in the background that I'm not aware of, right?

Someone else in my daytrading thread was explaining the same thing you just did.. maybe I'll go back and reread what he wrote, because I just asked the same question there.

Gotta say, been trying to figure out how this works but now that I understand it.. this stuff is fascinating. Way more interesting than what I do for a living.

Edit Hypothetically - if I did the covered call on 2/18 for a strike price of $35.00, premium of $.86, for 1200 contracts - that would mean if it reached $40, I would make (($35-$27)*1200) + ($.86*1200) = $9600 + $1032 = $10,632..

What happens if the share price reaches something ridiculous like $12? I'm guessing you'd just eat the loss on your shares but keep the premium. Or the strike price hits before expiry. Hm I'll do some research.
The mainriskwith selling covered calls is if it moon missions you have 2 options... You either miss out on gain train with a capped profit potential, or you buy the option back at a loss and roll forward/out if you want, or just forget about it. Quick example with completely made up information.

You have stock ABC with a cost basis of $25.
You sell a call for 2/19 exp at the strike of $30, for a $1 premium.
If the stock at expiration is <$30, you keep the stocks AND the premium
If the stock goes >$30 your stocks will get called away (sold) at $30, and you get to keep the premium (so a $6 profit/share)
Let's say the stock goes parabolic to $50, the ONLY downside is that you missed out on the profit line of $36-50. But your solution could've been to buy back (at a loss) and sell further out and higher up, or just buy back at a loss period.


If the stock completely tanks, your covered call will expire worthless and keep the premium in full. You have a couple options depending on your level of degeneracy
1) open more CC's on the way down (risky because it could rebound)
2) sell your shares to just get out, and leave the CC to expire worthless (less risky, but if it rebounds you could always buy back in, but most likely you would be able to close it out before exp with a profit)
"It won't get better, just different."
post 1627121153 12-31-2020, 01:21 PM
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#6973
  1. Travis99
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Originally Posted By MotorCityCobra⏩
I basically bough PLTR & ARKK at the top recently and now im deep in red. planned on buying more but i just started investing and dont want to lose it all. come february will PLTR moon or continue this downward trend? any of u buying this dip?
You bought them at the current high, not the top they will ever go. Just hold tight bro.
There is no they…
post 1627121783 12-31-2020, 01:28 PM
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#6974
  1. topperstyle
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Damn Tesla
post 1627121873 12-31-2020, 01:28 PM
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#6975
  1. TugOfPeace
  2. 1012 ng/dl
  1. TugOfPeace
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Originally Posted By chino3⏩
The mainriskwith selling covered calls is if it moon missions you have 2 options... You either miss out on gain train with a capped profit potential, or you buy the option back at a loss and roll forward/out if you want, or just forget about it. Quick example with completely made up information.

You have stock ABC with a cost basis of $25.
You sell a call for 2/19 exp at the strike of $30, for a $1 premium.
If the stock at expiration is <$30, you keep the stocks AND the premium
If the stock goes >$30 your stocks will get called away (sold) at $30, and you get to keep the premium (so a $6 profit/share)
Let's say the stock goes parabolic to $50, the ONLY downside is that you missed out on the profit line of $36-50. But your solution could've been to buy back (at a loss) and sell further out and higher up, or just buy back at a loss period.


If the stock completely tanks, your covered call will expire worthless and keep the premium in full. You have a couple options depending on your level of degeneracy
1) open more CC's on the way down (risky because it could rebound)
2) sell your shares to just get out, and leave the CC to expire worthless (less risky, but if it rebounds you could always buy back in, but most likely you would be able to close it out before exp with a profit)
It all makes sense for the most part, but I just got to thinking.. what's the point of a covered call really? The premium that you're paying isn't a profit, it's just money that you pay which you get back in the end? And the profit you're making if you hit the strike price, wouldn't you have made that profit if you just held your shares anyways? I've been mulling it over for the past 30 min so maybe I'm thinking too hard and sound full retard, but I just don't see how you're profiting from it
Monster0ultra self proclaimed "Chad" face pic looks like vtech school shooter: https://i.imgur.com/z2m6Why.jpg
post 1627123093 12-31-2020, 01:40 PM
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#6976
  1. chino3
  1. chino3
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Originally Posted By TugOfPeace⏩
It all makes sense for the most part, but I just got to thinking.. what's the point of a covered call really? The premium that you're paying isn't a profit, it's just money that you pay which you get back in the end? And the profit you're making if you hit the strike price, wouldn't you have made that profit if you just held your shares anyways? I've been mulling it over for the past 30 min so maybe I'm thinking too hard and sound full retard, but I just don't see how you're profiting from it
CC's serve as multiple purposes:

If the stock has had a tremendous run up, and youthinkit will go down, instead of BUYING puts, you can SELL calls.
If you have a price target that you would like to get out at, then you can collect a premium ON TOP of whatever your gains were (Assuming it hits) by selling calls
It's a tremendous strategy to lower your cost basis (manual calculations). If you bought a stock at $25, and you keep selling CC's that never get exercised for $1, your CB is essentially $1 lower each time
Not all premiums are created equal. VOO for example has dog chit premiums, so hardly worth it. Something like PLTR has very juicy premiums.

These two points should be the key highlights of why selling calls are good:

In my previous example of your CB on PLTR being $30, and selling CC's @ $30 (break even right?) the premium was $1.6, or +5%. 5% returns are phenomenal for a month turn around...

I'll share some vague details... I took a MASSIVE (you don't want to know, butGUH levels) hit on RKT when I sold this week... BUT I used covered calls to recoup my losses, and ended up selling just above 10% more than my total loss, worth of CC's since I bought them.
"It won't get better, just different."
post 1627124113 12-31-2020, 01:53 PM
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#6977
  1. johnnyboi123
  2. 14/F/Cali
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I tried so hard
post 1627124583 12-31-2020, 01:59 PM
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#6978
  1. topperstyle
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Originally Posted By johnnyboi123⏩
I tried so hard
And got so far
post 1627124893 12-31-2020, 02:02 PM
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#6979
  1. johnnyboi123
  2. 14/F/Cali
  1. johnnyboi123
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RKT ends the year at 20.21...is it trying to tell us something
post 1627125003 12-31-2020, 02:03 PM
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#6980
  1. Travis99
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Originally Posted By topperstyle⏩
And got so far
but in the end


Originally Posted By johnnyboi123⏩
RKT ends the year at 20.21...is it trying to tell us something
Post that on wsb as DD and you're sure to get retards fired up. Rkt will pump
There is no they…
post 1627125243 12-31-2020, 02:06 PM
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#6981
  1. TugOfPeace
  2. 1012 ng/dl
  1. TugOfPeace
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Chino, in your example of PLTR, how are you making money though? With $25 CB and $30 strike, $1 premium.

If you dont do an option and just hold your shares, wouldnt you reach the same dollar value in the end once the share price reaches $30?
Monster0ultra self proclaimed "Chad" face pic looks like vtech school shooter: https://i.imgur.com/z2m6Why.jpg
post 1627126003 12-31-2020, 02:15 PM
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#6982
  1. Heaney
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Fuark. Dow blew right though 30,500 today. Glad I went all in on put with my retirement money last week.
post 1627126053 12-31-2020, 02:16 PM
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#6983
  1. johnnyboi123
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Originally Posted By Travis99⏩
but in the end






Post that on wsb as DD and you're sure to get retards fired up. Rkt will pump
it's probably the most despised stonk there is on wsb....maybe a good sign for the hodlers.
post 1627127653 12-31-2020, 02:36 PM
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#6984
  1. chino3
  1. chino3
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Originally Posted By TugOfPeace⏩
Chino, in your example of PLTR, how are you making money though? With $25 CB and $30 strike, $1 premium.

If you dont do an option and just hold your shares, wouldnt you reach the same dollar value in the end once the share price reaches $30?
Selling options is all about generating revenue through the premiums. Most of the time you don't want them to ever get exercised. In that previous example, if the stock hit $29 at exp, you now have shares worth the market price of $29 PLUS you kept $1/share in premium, and you can do it again, and again, and again.

But sometimes people do it with the intention of getting their options exercised. I won't go full wheel, but lets say I bought PLTR today at $23.50, and wanted to ditch it hella quick. I could sell a 1/8 $24 for $.94 call and hope it gets called away. Even if it went way past that strike, but I was fine with it getting called away, I would have ended up with a 6.19% return. The premium would've been bigger than the increase so it's win win.

Again, Selling options is all about generating revenue through the premiums
"It won't get better, just different."
post 1627128203 12-31-2020, 02:41 PM
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#6985
  1. RobParks2M
  2. mad hatter
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I am pretty gottdam nervous US stocks gonna get cucked by Dems winning both senate seats. It feels very very imminent. I might get fuk't by this, but I shifted another 15% of my 401k to "cash". I'm like 25ish% cash and like 35% global equity(which has been popping off). 15% gain this year in 401k is pretty insane.
Fitness connoisseur
0.4 mg of party's over wake the FK up!
"the personification of greatness"
post 1627129083 12-31-2020, 02:51 PM
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#6986
  1. TugOfPeace
  2. 1012 ng/dl
  1. TugOfPeace
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Originally Posted By chino3⏩
Selling options is all about generating revenue through the premiums. Most of the time you don't want them to ever get exercised. In that previous example, if the stock hit $29 at exp, you now have shares worth the market price of $29 PLUS you kept $1/share in premium, and you can do it again, and again, and again.

But sometimes people do it with the intention of getting their options exercised. I won't go full wheel, but lets say I bought PLTR today at $23.50, and wanted to ditch it hella quick. I could sell a 1/8 $24 for $.94 call and hope it gets called away. Even if it went way past that strike, but I was fine with it getting called away, I would have ended up with a 6.19% return. The premium would've been bigger than the increase so it's win win.

Again, Selling options is all about generating revenue through the premiums
Man, maybe I'm going full retard but I'm still not getting it LMAO

If we stick to the $25CB, $30 strike, $1 premium example:

Person A has 100 shares @ $25CB. He just holds onto his shares until they reach $30, and he makes a $500 profit. His total portfolio value is now $3000.

Person B has 100 shares @ $25CB. He does a cc with $30 strike, $1 premium. His shares are valued at $2500 at the time of starting the CC, and he pays $100 from somewhere else to cover the premium. Once the price reaches $30, he gains $500 profit from the share price increase, and gets his $100 premium back. His total portfolio value (not including premium) is now $3000.

Am I missing something there?
Monster0ultra self proclaimed "Chad" face pic looks like vtech school shooter: https://i.imgur.com/z2m6Why.jpg
post 1627130063 12-31-2020, 03:03 PM
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#6987
  1. RobParks2M
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Originally Posted By TugOfPeace⏩
Man, maybe I'm going full retard but I'm still not getting it LMAO

If we stick to the $25CB, $30 strike, $1 premium example:

Person A has 100 shares @ $25CB. He just holds onto his shares until they reach $30, and he makes a $500 profit. His total portfolio value is now $3000.

Person B has 100 shares @ $25CB. He does a cc with $30 strike, $1 premium. His shares are valued at $2500 at the time of starting the CC, and he pays $100 from somewhere else to cover the premium. Once the price reaches $30, he gains $500 profit from the share price increase, and gets his $100 premium back. His total portfolio value (not including premium) is now $3000.

Am I missing something there?
Yes. Person B isGIVEN$100 by the person buying the call. He is selling the call initially and collecting the premium. Assuming it is $30 at the expiration person B's position is worth $3,100.
Fitness connoisseur
0.4 mg of party's over wake the FK up!
"the personification of greatness"
post 1627130823 12-31-2020, 03:12 PM
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#6988
  1. TugOfPeace
  2. 1012 ng/dl
  1. TugOfPeace
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Originally Posted By RobParks2M⏩
Yes. Person B isGIVEN$100 by the person buying the call. He is selling the call initially and collecting the premium. Assuming it is $30 at the expiration person B's position is worth $3,100.
Ahhhh makes sense. Well, chit, that's a good play. May do it for PLTR then. Guess the only thing I need to figure out is what the implications are if I decide to exercise the cc before expiry. I started venturing into time decay and theta.. that's where it gets complex I assume.
Monster0ultra self proclaimed "Chad" face pic looks like vtech school shooter: https://i.imgur.com/z2m6Why.jpg
post 1627131773 12-31-2020, 03:25 PM
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#6989
  1. BuckNakedinBama
  2. hell yeah brother
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TSLA puts (1/8/21, strike 680) returns of piss and anti-prosperity.

GME puts about flat.
-
post 1627132373 12-31-2020, 03:33 PM
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#6990
  1. Heaney
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Originally Posted By BuckNakedinBama⏩
TSLA puts (1/8/21, strike 680) returns of piss and anti-prosperity.

GME puts about flat.
I salute anyone with the nuts to bet against tesla's retard strength.
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