The Official Stock Market Thread

[jcardstore]

Originally Posted by mhcubsfan

Thoughts on picking HACK rather than CIBR? I personally have CIBR.

I actually like CIBR better but HACK came out first haha. I’ve held since this ETF launched. I’ve thought about switching to CIBR but just haven’t

[Josh611]

Jcard, great post with the covered calls. They are great. A great way to generate income on long positions too. I usually go way OTM because I don’t want the option to be exercised, just want the weekly dividend

I have contemplated doing the same thing with SOFI as well because the premiums were so good.

[JMarchand1981]

Originally Posted by jcardstore

Do you just sell calls against your long positions?

In my retirement portfolio I sell weeklies against all my positions. Besides HACK, since that only has monthlies. The difference there is that the cash just accumulates and gets reinvested in my long positions.

My current retirement portfolio looks like this:

HACK
TGT
LEA - I thought this would break out of consolidating but it seems stuck and now is trading under the 200day. Looking to rotate into APTV instead.
MRVL
SWIR (I'm up like 180% on this one and just trimmed half after last ER)
MCD
SPLK
SNOW

I'm thinking about adding SOFI here. I initially got alerted for the covered calls script I have but I actually like them as a potential disruptor in the personal finance space.

To answer your question, yes. I only sell calls against my long positions. For my personal money, I don't like the idea/potential for infinite loss. I take a very hard line stance against that. For the money I invest for others, I can't take such a hard line against infinite loss possibilities and then do it with the money of other people.

I also sell deep deep DEEP ITM puts. For instance, before the split, I was selling NVDA puts at the $400 range. People were buying and I was hoping like hell they would excercise. My potential loss here is limited to just the premium.

My other option play is just buying OTM calls with a ton of time left on them. FOr instance, I hit big last March when buying Apple calls $150 OTM with 16 months of time value. My potential loss here is limited to just the premium.

I also buy long equity positions to just round out a portfolio. I'm not 100% equities ever. I am normally, say, 65-70% equity, 15-20% options, 4-8% cash and the whatever remains would be "other". If I find a deal on corporate debt or whatever. These are difficult to come by because, well, I'm not a market maker or an institution. I don't manage $100M. I am last in line and the guys that passed on the debt before me have the same education or better than I do.

[JMarchand1981]

Originally Posted by GeechQuest

As long as premiums stay high would a 3% fall really hurt?

-Buy “XYZ” for $100.

-Sell weekly $105s for $4.00. Cost basis is now $96.

-XYZ closes the week at $97. Next week I sell $100s for $4.00. Cost based is now $92.

-XYZ closes at $94. Rinse and repeat.

I do realize that this is based on arbitrary numbers, and a bigger pullback can waste away your profits + make it untenable to sell covered calls until the stock bounces back.

Oddly enough, I know the meme stocks have absolutely ridiculous premiums. AMC had the high mark of $0.08 on $95s with 2 DTE yesterday. $60s had a high mark of $0.22 with 2 DTE. Make 0.5% on a 35% run in less than 2 full trading days? That seems like it shouldn’t be legal.

Obviously it’s stock dependent, but with these meme stocks I think they could retrace back to a more reasonable price and most holders would still be green.

I posted it towards Posey, who said he isn’t selling CCs on his 1,000+ AMC shares, but I have a buddy who’s cost basis is now approaching -$100 on his shares and he’s been selling furthest out expirations. The guy sold AMC $70s for $2.50 last Tuesday when the stock was at $45ish. Even penultimate AMC bag holders could be green with the crazy premiums on CCs, and I’m pretty sure that’s why the meme stocks refuse to die. Nobody wants the option merry go round to come to a halt.

That is an absurdly high premium that you are using in your example. I'm not going to take the rational and try and explain the irrational. My goal when trading options isn't to incur the most risk while making the most money. My goal when trading options is to supplement the gains that I am making on my long positions by leveraging those long positions to generate income.

CVS trades at $87.47. It closed there today.

$87.47 times 1.04 is around $90. I will round down to not cheat the numbers.

So the parallel to your example ($100 stock, selling a premium of +4%) would be CVS 09/10 Call with a $90 strike.

That option is $.12 per share. So $12 for the lot of 100 shares.

100 shares of CVS would come with a cost of $8747.
If CVS lost 3% of 87.47, the value of the shares would be $8485 ($87.47 times .97).

So the loss here is $262 on an option that you received $12 for. If you did that over the course of an entire portfolio for an extended period of time, any reputable brokerage would strip you of your options privilege's.

It's late. My math could be wrong. I don't know. And yes, instead of multiplying on the top end I should have divided on the bottom, but the result is close enough to get my point across.

[jcardstore]

So I had all of my positions closed.

HIMX - exercised @12 - total gain w/ call premium 2.96%
SDC - exercised @5.5 - total gain w/ call premium 7.88%
SOFI - exercised @15 - total gain w/ call premium 4.67%
BB - bought back call for $3 and sold @ 11.09 Friday afternoon - total gain w/ call premium 4.81%

Overall a solid ~2 weeks. I’ll be running my script again tomorrow to get some ideas and post my plays here.

I think I’m going to add SOFI as a long hold even though now the call premiums are < 1%. HIMX has a little juice left to squeeze and I like the semi space overall.

[GeechQuest]

Originally Posted by JMarchand1981

These are mostly dog poop companies.

Originally Posted by JMarchand1981

That is an absurdly high premium that you are using in your example. I'm not going to take the rational and try and explain the irrational.

I should have multi-quoted the first time. Those dog poop companies are paying those premiums right now, and have been for some time now.

AMC closed at $44.02. The $45s for 9/10 closed @ $2.45.

Net 5% premium against a 2% move on a weekly, and the premiums are actually down from their summer nuttiness.

Yes, I realize you don’t trade those. I don’t either because I don’t have the stones. In retrospect, I should have because I’m pretty positive you could have bought at the 52 week high and rolled out the past 14 weeks and been net positive currently. It doesn’t seem to be slowing down either. You can deem it rational or irrational or whatever, but it is reality.

[JMarchand1981]

Originally Posted by GeechQuest

I should have multi-quoted the first time. Those dog poop companies are paying those premiums right now, and have been for some time now.

AMC closed at $44.02. The $45s for 9/10 closed @ $2.45.

Net 5% premium against a 2% move on a weekly, and the premiums are actually down from their summer nuttiness.

Yes, I realize you don’t trade those. I don’t either because I don’t have the stones. In retrospect, I should have because I’m pretty positive you could have bought at the 52 week high and rolled out the past 14 weeks and been net positive currently. It doesn’t seem to be slowing down either. You can deem it rational or irrational or whatever, but it is reality.

That’s fine That it is reality for a handful of companies. However, 10 of 500 companies isn’t going to change my position on the other 490. Why? Because it’s irrational and not in my trading portfolio to own companies with such potential downside. That risk is why those options come with such high premiums.

[jcardstore]

MYOV - Sideways for all of 2021 but appears to be breaking out. Last high was 30.90.

Broke above resistance on last Thursday. Will be watching this one closely but looking to possibly open a position next week and sell the 9/17s. the $30s are about 1.9% premium right now if I remember correctly.

[finfangfan]

Originally Posted by btmcrushers

I've got 2 shares @21.07 and 50 @20.39 - was debating whether it is a longer term hold or if it creeps up to the 23-24 range with earnings next week if I just take a 8-9% ROI and exit.

GENI announced deal this morning with Caesars and is touching $22/sh in premarket.

[babyfaceposey]

Grabbed another 7 shares of AMC. Try to get to 2000 shares.

[jcardstore]

Uranium futures breaking out.

Buying CCJ this morning. We'll see what it opens at but 2 strikes out are still generating ~2% premium. Regardless of call premium price action looks very strong here.

BRKS looks to have officially confirmed a breakout with a strong move above 89 creating a new level of support. I'm looking at $100 on this one

[finfangfan]

GENI showing a great deal of volatility this morning… I was able to add 10 shares at $19.22 on the post earnings drop at open and it is already back up to $21.38 three minutes into trading.

[jcardstore]

I placed 2 covered call trades this morning.

CCJ - 100 Shares @ 22.96 - sold 23.5C @ $30 - 1.3% premium
NEGG - 100 Shares @ 17.84 - sold 18C @ $51 - 2.85% premium

[finfangfan]

Originally Posted by finfangfan

GENI showing a great deal of volatility this morning… I was able to add 10 shares at $19.22 on the post earnings drop at open and it is already back up to $21.38 three minutes into trading.

GENI ended up positive for the day closing at $22.27 which was up 16% from its low of $19.10 shortly after open. This stock is a bit of a rollercoaster … not for the feint of heart! I still think it has room to go up from here.

[JMarchand1981]

Volume plays a big part in this but we are making some serious coin the past few days on the options swap.

Sold to open 210910C160- $.23
BTC 210910C160- $.09
Sold to open 210910C157.50- $.4237
BTC 210910C157.50- $.09

Again, it only adds up because of the volume we have been buying in, but we are absolutely killing these trades.

[jcardstore]

Originally Posted by JMarchand1981

Volume plays a big part in this but we are making some serious coin the past few days on the options swap.

Sold to open 210910C160- $.23
BTC 210910C160- $.09
Sold to open 210910C157.50- $.4237
BTC 210910C157.50- $.09

Again, it only adds up because of the volume we have been buying in, but we are absolutely killing these trades.

Naked selling to open?

There’s a very similar strategy I was reading about that takes advantage of decay and you just sell and buy high IV options.

[JMarchand1981]

Originally Posted by jcardstore

Naked selling to open?

There’s a very similar strategy I was reading about that takes advantage of decay and you just sell and buy high IV options.

Nope, not naked. That doesn’t fit the risk profile.

Collectively, as a group we own enough shares to cover all options.

[jcardstore]

Wanted to get the boards thoughts on SOFI.

I got assigned out of my position last week but I've been digging into this a bit more and I think I'm going to buy back in.

One major tailwind I see heading into next year and beyond is the end of the student loan moratorium. This was a major hit on their revs ($40M). They doubled their users last Q with strong momentum looking forward.

The moratorium headwind is only temporary and I expect them to more aggressively market their other services which should be an easy cross sell for the current members. I don't expect the administration to forgive a meaningful amount of student loan debt which I believe will push much of this 1.4T to be refi'd in the private sector.

I can see a future with sofi becoming an all-in-one finance platform for it's customers.

[finfangfan]

I know they have fallen out of favor, but I still enjoy playing a handful of spacs. Hoping one or more of the following work out for me:

DMYI (IONQ) — IONQ is a quantum computer company from College Park, MD. The vote on merger is at the end of September. I added more shares yesterday and plan to hold 500 shares through vote (unless there is some crazy run up prior to vote).

DMYQ (Planet Labs — planet.com) — another “DMY”-spac like DMYI above and the same people who brought Genius Sports public earlier in the year. This is a “small satellite” company. Merger vote is likely a ways off, but I plan to slowly accumulate this one over next month or 2.

NGCA (Virgin Orbit) — last year I was hoping Chamath would take Virgin Orbit public through one of his IPOalphabet spacs that I held, but it ended up with NGCA instead. I previously did well with Virgin Galactic so I think this one is worth holding a small position in.

All 3 of the above spacs are basically still at or near initial $10 level.

Anyone else eyeing or investing in any recent spacs?

[jcardstore]

Originally Posted by finfangfan

I know they have fallen out of favor, but I still enjoy playing a handful of spacs. Hoping one or more of the following work out for me:

DMYI (IONQ) — IONQ is a quantum computer company from College Park, MD. The vote on merger is at the end of September. I added more shares yesterday and plan to hold 500 shares through vote (unless there is some crazy run up prior to vote).

DMYQ (Planet Labs — planet.com) — another “DMY”-spac like DMYI above and the same people who brought Genius Sports public earlier in the year. This is a “small satellite” company. Merger vote is likely a ways off, but I plan to slowly accumulate this one over next month or 2.

NGCA (Virgin Orbit) — last year I was hoping Chamath would take Virgin Orbit public through one of his IPOalphabet spacs that I held, but it ended up with NGCA instead. I previously did well with Virgin Galactic so I think this one is worth holding a small position in.

All 3 of the above spacs are basically still at or near initial $10 level.

Anyone else eyeing or investing in any recent spacs?

Quantum computing will be the future of computing. The problem is that I don't think it's close enough for a company like this to ever be profitable.

There are some major headwinds that face a company in this space.

1) The government and other goliaths have been researching and working on quantum for at least a decade. They have infinitely more money and resources. I guess you could argue that maybe there is some value in a buyout but I doubt this company has anything proprietary. Their architecture is slightly different and I'm not smart enough to understand how it's any better than what the government or google already has developed but that's not even the real challenge.

2) The real challenge to quantum computing is the immense, and currently insurmountable, cooling required to even get them to run. There is no practical application for them and until the cooling issue is figured out there won't be for years.

3) The competition in this space is WAY too much for a tiny company like this. NVDA, MSFT, INTC, GOOG, all these companies have cash hoards of billions and access to billions more. They have significantly more advanced and robust R&D departments.

A company like this doesn't have nearly enough cash or runway to be able to spend years waiting for a better cooling system. They will burn through cash in a couple years and then what? Their quantum chips can't even currently out perform non quantum super computers.

I guess you can trade it and there will be some hype but I certainly wouldn't be investing.

[jcardstore]

Originally Posted by jcardstore

I placed 2 covered call trades this morning.

CCJ - 100 Shares @ 22.96 - sold 23.5C @ $30 - 1.3% premium
NEGG - 100 Shares @ 17.84 - sold 18C @ $51 - 2.85% premium

I closed out my NEGG trade this morning. Didn't want to hold this over the weekend.

BTC @ $14
Sold my 100 shares at 11.60.

Total profit on the trade was 1.13%

[jcardstore]

Sucks I got assigned out of CCJ because Uranium is ripping right now.

[jcardstore]

DDD may be my covered call play this week. The closest OTM option is yielding 2.45% right now

[btmcrushers]

Got some spare cash - anyone got any stocks they'd recommend investing in short or long term?

[GeechQuest]

Originally Posted by btmcrushers

Got some spare cash - anyone got any stocks they'd recommend investing in short or long term?

SPY