Stocks

[whacked1]

How do you differentiate this from gambling, conceptually?

It just has a higher risk. Technically most of the market is gambling (and so is lots of businesses). Placing money on an outcome in which you have zero control.

[sillypainter]

Sold 0DTE

5 SPY 484.00 P
5 SPY 493.00 C

Earned $112.44

[Euclid]

It just has a higher risk. Technically most of the market is gambling (and so is lots of businesses). Placing money on an outcome in which you have zero control.

You can easily make the case that longer term investments aren't similar to gambling.

[sillypainter]

It just has a higher risk. Technically most of the market is gambling (and so is lots of businesses). Placing money on an outcome in which you have zero control.

Said it right. But I look at some technicals, very basic so I can bet where the market will hover. I just think after looking at it that it will not go above the call price or fall below the put price. In today's case it has to fall below 484 or rise above 493 for me to be assigned. Still not a risk because assignments are not the end of the world, but it could be risky a little bit depending on the volatility of the stock.

This night I had a tiny scare after being assigned 4,000 contracts of SPY calls at 491 Which is around 2mil dollars
 I did however cover at $490.50 so I made $2000. The beauty of SPY is that it's not volatile usually. It's not a Tesla where it can rise $20 in a day and then 4,000 shares can be a loss of $80,000 in a heartbeat.

[sillypainter]

Sold 0DTE
5 QQQ 421.78 P
5 QQQ 430.00 C

Earned $194.89

[savvydigz]

It just has a higher risk. Technically most of the market is gambling (and so is lots of businesses). Placing money on an outcome in which you have zero control.

you either don't have a full understanding of markets or your definition of gambling is very broad.

[savvydigz]

My question is if someone is selling covered calls and puts in an account where he would anyhow hold spy for example an ira, isn't this a worthwhile strategy?

[sillypainter]

7 META 2/2/2024 450.00 P
5 META 2/2/2024 495.00 C

Earned $276.84

[savvydigz]

7 META 2/2/2024 450.00 P
5 META 2/2/2024 495.00 C

Earned $276.84

This is very risky, I suggest you tame down.
You said the worst case you'll be assigned spy this is not the case here

[ExGingi]

7 META 2/2/2024 450.00 P
5 META 2/2/2024 495.00 C

Earned $276.84

As long as they didn't expire you didn't earn anything. You collected premiums and have a liability. When the liability ends you earn (or lose).

[ExGingi]

This is very risky, I suggest you tame down.
You said the worst case you'll be assigned spy this is not the case here

AKA:  On Wall Street you can find Bulls and Bears, but no pigs.

[savvydigz]

7 META 2/2/2024 450.00 P
5 META 2/2/2024 495.00 C

Earned $276.84

if you think the price will stay in between, do an iron condor or iron butterfly,the RR is sooo much better

[Euclid]

Before I proceed, whatever crimes I may mention here are beyond their statute of limitations or have already been prosecuted. So I am aware of the consequences.

Graduating from Law School I started working for a small firm. I left after 9 months to start my own practice. I was very successful. In 2007 I saw the real estate market (and my business) slow down significantly. In looking for new revenue streams I found day trading in stock and options market with its unbelievable volatility. With millions of dollars sitting flowing through my escrow accounts it was easy to "borrow" from my clients without their knowledge to play the market. That was the beginning of the end.

On Day 1 I made 5 figures. On Day 2 I lost 6 figures. It was a chase to recoup my losses from that day forward. It was that simple. Yes, I thought I could "borrow" (read:steal temporarily and replace later) and not get caught. Day 1 gave me the taste of easy money. Day 2 gave me the need to chase replace. Whether it was a desire for financial stability or just more money, I will never know and it doesnt make a difference, as long as I never repeat the same behavior.

"Playing" the stock market is gambling. Legal as it may be, it is the same as putting a bet on a horse, bet on a sports game, bet on the outcome of a hand of cards, throw of a die or spin of a wheel. All those are legal in certain places. So I became an addict without knowing it.

Every moment of every day was spent raising money in trying to recoup those losses and when I did win big then it was spent seeking to replicate those wins to make more money then I needed. It was a chase up and a chase down. Along the way stealing became second nature. As long as my clients got their money when they needed it hey didnt know where it came from or that it came at the expense of other clients. 

At some point in 2009 the real estate market dried up totally and I resorted to borrowing from people to replace the stolen monies. In the summer of 2010 I was only down 5 figures overall. All I had to do was stop right then and there and I would have been ok. Instead I was in the options market every day. I played the monthly options as well as the weekly options. One fine day I awoke to a $300k gain on a $10k bet. That was the end of me.

All I needed to do was stop. I just couldnt. My addiction was so strong that it convinced me that I could replicate that win. In chasing that dreamI lost $1MM in less than 10 days, including over $600k of my clients money which i had misappropriated from the sale of his building and which he had entrusted me to hold until he needed it for further projects.

Thats enough to chew before shabbos.  TR starts next week.       

Is this different than what he was doing?

[MiInvstr]

Was assigned a WHOPPING $2,000,000 worth of stock to cover for my 491 call this night even though close was at 489 and I covered earlier this morning at 490.50. I guess the option exerciser was convinced that it will rise today after what META did in after hours and SPY also rose above 491 last night. SPY fell in today's pre hours reaching into the 489's so I could have made more,  but I learned it from Dan and from my own experience PGFHGS. Sold them in premarket at 490.50. Profit is around $2000.

Are you aware there can be a margin call too if there is volatility?

[sillypainter]

I'm not making or losing thousands or even millions. Most I can lose in a day is a few K. I'm not a dumb gambler. I try to make a few hundred dollars. And yes it's my OWN money. There could potentially be option assignments and I have the cash if I need it, but because I ONLY trade SPY my broker will not do any margin calls because my trades do not move a lot amd I have the funds to cover. Yes I have access to 2 million cash if I need to.

[g_t]

Not sure if you're completely trolling as you wrote about selling a strangle in meta and then claimed to be only doing spy. In any case, it's your money and you can and should use it any way you want. Just to point out two things that may be helpful:
The index option market closes at 4:15, so SPY didn't close  at 489, it closed within pennies of 491. By 4:16 it was well above 491. Perhaps you were aware of that. If not, there are likely other things you might not know about as well.
2nd - I read hvaces42's and others posts thinking how they're wrong about it being pure gambling bec I really did have an edge. Turns out they were wrong for a couple of years in which I turned 20k into 1.4M after taxes with almost 0 down weeks. Then my edge ran out, as they all eventually do. And by that time I was an addict. bh Im fine, no crimes committed, so mine is not a sob story even if most of that money is now gone. The dopamine hits are real. Its very difficult to fight the daily chemical reactions. In other words, the risks of such strategies may not be exclusively financial.

[sillypainter]

My last answer here, and I'll go on with my day. META was a one off because it went up in pre hours and then stayed flat for a few hours so I saw an opportunity that it will not go up more so I jumped and bought a 495C IIRC, which paid me nice. I actually bought later a 90 and 85 call as well, I didn't post it.

I'm not a gambler and I lost my fair share in the stock market for HOLDING securities, .ever again. I try not to hold anything for more than a day.

Now, tomorrow if you see me holding for a few weeks or buying AMZN please don't call me out, I'll do what I FEEL is right. I'm now doing what the rich do, they hold for the short term. Of course there is the Uber long term holders which I'm also fine with, but the 1-2 year holders IMHO they all lose because you can't time the market.

Signing off from this thread. I'll continue doing what I want...with MY hard earned money.

I made $10,000K+ YTD which I'm fine with. Most people are not happy with small gains, but I am. Learned it the hard way, 5ou don't make a LOT of money because then you LOSE a lot of money.

[g_t]

Genuinely wishing you continued hatzlocha.

[gozalim]

Can someone clarify the difference between average risk and maximum risk?

[MoYS]

Now, tomorrow if you see me holding for a few weeks or buying AMZN please don't call me out, I'll do what I FEEL is right. I'm now doing what the rich do, they hold for the short term. Of course there is the Uber long term holders which I'm also fine with, but the 1-2 year holders IMHO they all lose because you can't time the market.

I'm really not picking on you, and it seems you have more knowledge than I do in certain aspects of investing. However, for anyone else out there please be aware that this is not the philosophy of the well known icons of investing. Money managers who never learned, and most certainly never applied, fiduciary duty with OPM hold for the short term because they get paid fees on AUM and if they don't show steady high returns, they will lose capital, thereby losing income. To show sustained high returns they must focus on daily price valuations and in the long run are by defintion unrealistic because you cannot beat the market. Investing is a zero sum game. It is true, you cannot time the market, so don't bother. Focus on time in the market.

Read some books by money managers who care about the investor and you will see that they do not advise short term investing.