Stocks

[sillypainter]

Have you thought about buying a far otm option of whatever your selling. So it’s not as naked. For example buy a 495c for every 491c that you sell?

I work on daily options so it's much easier to manage. I don't need to protect my uinvestment because it's SPY and it's NOT volatile.

[g_t]

Aka collecting nickels in front of the steamroller. Please be careful.

[ExGingi]

I work on daily options so it's much easier to manage. I don't need to protect my uinvestment because it's SPY and it's NOT volatile.

Until it is.

[whacked1]

But my strategy is NEVER to hold a stock for more than 1-2 days.

Your tax liability is crazy then?

[sillypainter]

Your tax liability is crazy then?

Was holding back for TAX REASONS to hold for 1 year and here I am with nothing to show. This new strategy works BH fine. No need to copy me. Sit back and watch.

[whacked1]

Was holding back for TAX REASONS to hold for 1 year and here I am with nothing to show. This new strategy works BH fine. No need to copy me. Sit back and watch.

I'm not sure i follow. There's two separate plays here, 1) selling puts 2) long term gains on holding stocks.

By not holding a stock for a year, you are down immediately 10-20% depending on your bracket. Obviously in some scenarios it makes sense if the stock was a short play. However, to not hold any stock for long period, I dont understand that. 

[sillypainter]

I'm not sure i follow. There's two separate plays here, 1) selling puts 2) long term gains on holding stocks.

By not holding a stock for a year, you are down immediately 10-20% depending on your bracket. Obviously in some scenarios it makes sense if the stock was a short play. However, to not hold any stock for long period, I dont understand that.

As I told you. I had HUGE gains in 2020 and 2021 on a HOLD strategy and I was HOLDING BACK form selling because of capital gains taxes, and then it CRASHED. So here I am with no profits to show BECAUSE I held back from selling being afraid of high taxes. Was not blue chips though.

[whacked1]

As I told you. I had HUGE gains in 2020 and 2021 on a HOLD strategy and I was HOLDING BACK form selling because of capital gains taxes, and then it CRASHED. So here I am with no profits to show BECAUSE I held back from selling being afraid of high taxes. Was not blue chips though.

Where are those stocks now?

I sold FB at the crash and look at it now....

[Shauly101]

I don't own anything. I sell naked options.

Today, I just sold a few SPY 0DTE options.

483P
491C

Profit $661.92.

We will only know by EOD if I'm right or wrong.

how many contracts each?

[sillypainter]

how many contracts each?

Today I was a little wild. 39 contracts each. Not recommended for the faint of heart. I usually start trading later in the day, but today I saw an opportunity earlier. My average day only makes $100-200 being more conservative.

[MiInvstr]

Today I was a little wild. 39 contracts each. Not recommended for the faint of heart. I usually start trading later in the day, but today I saw an opportunity earlier. My average day only makes $100-200 being more conservative.

If the spy would drop 5% past your strike or gained 5% over your calls strike, you would be out over $95k if I calculated correctly, and you would need to use $2 million on margin which costs a boatload of money these days. Is it really worth the risk? Imagine if it would gain 10% or lose 10% which has happened in history, or think Black Monday with a surprise 20% drop.

[MiInvstr]

I work on daily options so it's much easier to manage. I don't need to protect my uinvestment because it's SPY and it's NOT volatile.

Though it’s true that it’s not a volatile stock, there has been pretty high volatile days in the history of the S&P though. And you have zero protections in place for such occurrences, as rare as they may be.

[ExGingi]

Though it’s true that it’s not a volatile stock, there has been pretty high volatile days in the history of the S&P though. And you have zero protections in place for such occurrences, as rare as they may be.

How much would protection cost for the tail risk?

[MiInvstr]

How much would protection cost for the tail risk?

Idk exactly as I don’t really have experience in 0dte options. But even if you would purchase the first option that’s 1 penny. Which I’m guessing would be about $5 over his strike price, as that’s already a few dollars otm. So that would cost $78 of the profits for 78 contracts, and it would limit the loss to $19,500 in a worst case scenario, assuming $5 over the contract is .01 which I think it was just about that today when I checked, cmiiw.

[MiInvstr]

I believe the real term for it is a credit spread option. It’s a risky bet but at least it’s a controlled one with a max loss that is possible. (And a person won’t end up homeless in a worst case scenario, which history shows has happened without warning. Though with the halts that they enacted, a 20% drop in one day is way more unlikely or barely possible today as opposed to Black Monday. Though nothing is really stopping a 10% drop).

[sillypainter]

If the spy would drop 5% past your strike or gained 5% over your calls strike, you would be out over $95k if I calculated correctly, and you would need to use $2 million on margin which costs a boatload of money these days. Is it really worth the risk? Imagine if it would gain 10% or lose 10% which has happened in history, or think Black Monday with a surprise 20% drop.

SPY almost never falls 5%. Impossible. It's an index. By end of day you know if there are major world events.

That's why I usually trade in the last 2 hours after looking on the chart and other inidicators to get an idea of where we are

[MoYS]

SPY almost never falls 5%. Impossible. It's an index. By end of day you know if there are major world events.

That's why I usually trade in the last 2 hours after looking on the chart and other inidicators to get an idea of where we are

Obviously you will do what you want. But I believe that most options are bought and sold by the market makers, if there really is some catastrophe there is a good chance they wont play. Safe investing.

[ExGingi]

SPY almost never falls 5%. Impossible. It's an index. By end of day you know if there are major world events.

That's why I usually trade in the last 2 hours after looking on the chart and other inidicators to get an idea of where we are

Thinking that SPY is diversified is a pipedream. Do you realize it's a weighted index. Do you know how much of SPY is concentrated in "the magnificent seven" (the current term for what started as FAANG)?

[sillypainter]

I don't own anything. I sell naked options.

Today, I just sold a few SPY 0DTE options.

483P
491C

Profit $661.92.

We will only know by EOD if I'm right or wrong.

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.

[Euclid]

How do you differentiate this from gambling, conceptually?