Author Topic: What are you buying today?  (Read 1277494 times)

boilermaker75

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Re: What are you buying today?
« Reply #3800 on: May 17, 2019, 06:43:30 AM »
I did something new for me:

I wrote some WY puts that expire in 2 days:
WY 05/17/2019 24.50 P - price when i wrote the puts was 24.85 and I sold the puts for $.10

My reasoning was that I was seriously thinking about adding to my WY position and when I checked the options I saw the OTM options with a bid for $.10 so I just went for it knowing that if I am put to in 2 days then I will get it $.45 less then todays price, which I can live with. My profit on expiration is a whopping $80.

Tell me if my thinking is stupid and i am picking up pennies in front of a steam roller.

The problem with the strategy is that if the stock goes straight up, you just get 10c/ share.

Plus you have to pay short term capital gain tax, and tie up the cash in the account until put is expired. Like Warren said, if you like the stock, just buy it.

You don't have to wait till expiration, you can buy the put back to free up the cash. I do that on occasion.

Also, Buffett may say that but he has written about $5 billion of put options over the years.

Buying it back depends on the spread and liquidity.  May I ask what market data are you using for these?

Just the data provided by Schwab—quotes, volume, open interest.

I've never had an issue trading options on stocks such as WFC, BRKB, AMGN, BAC, GILD, BK, etc. my usual suspects.


meiroy

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Re: What are you buying today?
« Reply #3801 on: May 19, 2019, 03:40:39 AM »
I did something new for me:

I wrote some WY puts that expire in 2 days:
WY 05/17/2019 24.50 P - price when i wrote the puts was 24.85 and I sold the puts for $.10

My reasoning was that I was seriously thinking about adding to my WY position and when I checked the options I saw the OTM options with a bid for $.10 so I just went for it knowing that if I am put to in 2 days then I will get it $.45 less then todays price, which I can live with. My profit on expiration is a whopping $80.

Tell me if my thinking is stupid and i am picking up pennies in front of a steam roller.

The problem with the strategy is that if the stock goes straight up, you just get 10c/ share.

Plus you have to pay short term capital gain tax, and tie up the cash in the account until put is expired. Like Warren said, if you like the stock, just buy it.

You don't have to wait till expiration, you can buy the put back to free up the cash. I do that on occasion.

Also, Buffett may say that but he has written about $5 billion of put options over the years.

Buying it back depends on the spread and liquidity.  May I ask what market data are you using for these?

Just the data provided by Schwab—quotes, volume, open interest.

I've never had an issue trading options on stocks such as WFC, BRKB, AMGN, BAC, GILD, BK, etc. my usual suspects.

Thanks.

sleepydragon

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Re: What are you buying today?
« Reply #3802 on: May 19, 2019, 07:25:18 AM »
I did something new for me:

I wrote some WY puts that expire in 2 days:
WY 05/17/2019 24.50 P - price when i wrote the puts was 24.85 and I sold the puts for $.10

My reasoning was that I was seriously thinking about adding to my WY position and when I checked the options I saw the OTM options with a bid for $.10 so I just went for it knowing that if I am put to in 2 days then I will get it $.45 less then todays price, which I can live with. My profit on expiration is a whopping $80.

Tell me if my thinking is stupid and i am picking up pennies in front of a steam roller.

The problem with the strategy is that if the stock goes straight up, you just get 10c/ share.

I disagree. I think boilermaker’s method is totally sound. The only risk is sell too much put without the cash ready to buy, otherwise it certainly lower your cost of purchase of a stock if you will be buying it over time. Boilermaker has said he doesn’t do this for all stocks, which will be dumb. He only do it for a few stocks that are his long term holdings which he plans to buy more in the long term.




Plus you have to pay short term capital gain tax, and tie up the cash in the account until put is expired. Like Warren said, if you like the stock, just buy it.

Eating like a chicken yet shitting like an elephant... Not my cup of tea.

james22

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Re: What are you buying today?
« Reply #3803 on: May 20, 2019, 06:56:50 AM »
FNMA @ $2.75
FMCC @ $2.65
FNMAS @ $12.25
FNCKJ @ 12.00
25% BRK l 25% BAM l 8% SV (VSIAX) l 8% EM (VEMAX) l 4% FNMA/FMCC l 4% FNMAS/FMCKJ l 25% Stable Value

Gregmal

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Re: What are you buying today?
« Reply #3804 on: May 20, 2019, 07:12:03 AM »
GOOG

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Re: What are you buying today?
« Reply #3805 on: May 20, 2019, 07:49:46 AM »
FNMA @ $2.75
FMCC @ $2.65
FNMAS @ $12.25
FNCKJ @ 12.00

What did you do, grab value line book and start in the 'F' section?
Love watching what people can accomplish through business.
www.sethgetz.com @sethgetz

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Re: What are you buying today?
« Reply #3806 on: May 20, 2019, 07:53:49 AM »
I did something new for me:

I wrote some WY puts that expire in 2 days:
WY 05/17/2019 24.50 P - price when i wrote the puts was 24.85 and I sold the puts for $.10

My reasoning was that I was seriously thinking about adding to my WY position and when I checked the options I saw the OTM options with a bid for $.10 so I just went for it knowing that if I am put to in 2 days then I will get it $.45 less then todays price, which I can live with. My profit on expiration is a whopping $80.

Tell me if my thinking is stupid and i am picking up pennies in front of a steam roller.

The problem with the strategy is that if the stock goes straight up, you just get 10c/ share.

Plus you have to pay short term capital gain tax, and tie up the cash in the account until put is expired. Like Warren said, if you like the stock, just buy it.

Eating like a chicken yet shitting like an elephant... Not my cup of tea.

Update: the day of expiration the stock dropped 2.5% and so I got the stock at a lower price then I would have expected when I sold the put.
unfortunately today it has gone down another 2.2%
Love watching what people can accomplish through business.
www.sethgetz.com @sethgetz

james22

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Re: What are you buying today?
« Reply #3807 on: May 20, 2019, 08:01:49 AM »
FNMA @ $2.75
FMCC @ $2.65
FNMAS @ $12.25
FNCKJ @ 12.00

What did you do, grab value line book and start in the 'F' section?

It was the 1,245th page in the ten-bagger thread that finally convinced me.
25% BRK l 25% BAM l 8% SV (VSIAX) l 8% EM (VEMAX) l 4% FNMA/FMCC l 4% FNMAS/FMCKJ l 25% Stable Value

Jurgis

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Re: What are you buying today?
« Reply #3808 on: May 20, 2019, 08:49:14 AM »
FNMA @ $2.75
FMCC @ $2.65
FNMAS @ $12.25
FNCKJ @ 12.00

What did you do, grab value line book and start in the 'F' section?

It was the 1,245th page in the ten-bagger thread that finally convinced me.

You're way behind. It's on the 1249th page now and boy that has improved the arguments.
"Before you can be rich, you must be poor." - Nef Anyo
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SnarkyPuppy

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Re: What are you buying today?
« Reply #3809 on: May 20, 2019, 09:03:31 AM »
FNMA @ $2.75
FMCC @ $2.65
FNMAS @ $12.25
FNCKJ @ 12.00

What did you do, grab value line book and start in the 'F' section?

It was the 1,245th page in the ten-bagger thread that finally convinced me.

You're way behind. It's on the 1249th page now and boy that has improved the arguments.

My favorite way of investing is to determine quality of investment by anchoring to COBF page count.