Author Topic: Do you have the balls?  (Read 14842 times)

alwaysdrawing

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Re: Do you have the balls?
« Reply #40 on: March 16, 2020, 12:31:27 PM »
I don't know what the name of this strategy is...  if anyone knows a name for it that's all I'm after.

Hypothetical trading behavior as follows:  You begin with enough cash to buy the common without margin, but instead you expect volatility and don't care about potentially losing $5.50 per share between now and 2022.  So you begin by purchasing enough LEAPS calls to represent the notional value of the amount of common you could otherwise purchase with your remaining cash.  You keep doing that every time the stock drops $10.
WFC at $50.  Pay $5.50 for 2022 at-the-money leaps.
WFC at $40.  Pay another $5.50 for 2022 at-the-money leaps.
WFC at $30.  Pay another $5.50 for 2022 at-the-money leaps
WFC at $20.  Pay another $5.50 for 2022 at-the-money leaps
WFC at $10.  Pay another $5.50 for 2022 at-the-money leaps
etc.. etc...

You just keep accumulating calls.

2022 is on the other side of an estimated timeline for a vaccine to be widely available (12-18 months)

Jokes aside, is there a name for this kind of a trading strategy?

Bagholding?


ERICOPOLY

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Re: Do you have the balls?
« Reply #41 on: March 16, 2020, 12:33:52 PM »
I don't know what the name of this strategy is...  if anyone knows a name for it that's all I'm after.

Hypothetical trading behavior as follows:  You begin with enough cash to buy the common without margin, but instead you expect volatility and don't care about potentially losing $5.50 per share between now and 2022.  So you begin by purchasing enough LEAPS calls to represent the notional value of the amount of common you could otherwise purchase with your remaining cash.  You keep doing that every time the stock drops $10.
WFC at $50.  Pay $5.50 for 2022 at-the-money leaps.
WFC at $40.  Pay another $5.50 for 2022 at-the-money leaps.
WFC at $30.  Pay another $5.50 for 2022 at-the-money leaps
WFC at $20.  Pay another $5.50 for 2022 at-the-money leaps
WFC at $10.  Pay another $5.50 for 2022 at-the-money leaps
etc.. etc...

You just keep accumulating calls.

2022 is on the other side of an estimated timeline for a vaccine to be widely available (12-18 months)

Jokes aside, is there a name for this kind of a trading strategy?

Bagholding?

Have they put you on a respirator yet?

alwaysdrawing

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Re: Do you have the balls?
« Reply #42 on: March 16, 2020, 12:37:20 PM »
I don't know what the name of this strategy is...  if anyone knows a name for it that's all I'm after.

Hypothetical trading behavior as follows:  You begin with enough cash to buy the common without margin, but instead you expect volatility and don't care about potentially losing $5.50 per share between now and 2022.  So you begin by purchasing enough LEAPS calls to represent the notional value of the amount of common you could otherwise purchase with your remaining cash.  You keep doing that every time the stock drops $10.
WFC at $50.  Pay $5.50 for 2022 at-the-money leaps.
WFC at $40.  Pay another $5.50 for 2022 at-the-money leaps.
WFC at $30.  Pay another $5.50 for 2022 at-the-money leaps
WFC at $20.  Pay another $5.50 for 2022 at-the-money leaps
WFC at $10.  Pay another $5.50 for 2022 at-the-money leaps
etc.. etc...

You just keep accumulating calls.

2022 is on the other side of an estimated timeline for a vaccine to be widely available (12-18 months)

Jokes aside, is there a name for this kind of a trading strategy?

Bagholding?

Have they put you on a respirator yet?

Got your fill of tangible book equity bank stocks before a depression?

enoch01

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Re: Do you have the balls?
« Reply #43 on: March 16, 2020, 12:43:13 PM »
i like the sentiment on this thread

stahleyp

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Re: Do you have the balls?
« Reply #44 on: March 16, 2020, 12:44:01 PM »
i like the sentiment on this thread

I haven't seen you on here in forever!
Paul

mcliu

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Re: Do you have the balls?
« Reply #45 on: March 16, 2020, 12:46:37 PM »
Great depression coming. Human population wiped out. Banks bankrupt. Stocks go to 0. Followed by nuclear war. Money is worthless.
Long gold, bunker, food. Maybe some weapons as hedge for zombies.

enoch01

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Re: Do you have the balls?
« Reply #46 on: March 16, 2020, 12:47:34 PM »
i like the sentiment on this thread

I haven't seen you on here in forever!

hi paul, happy to be back

enoch01

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Re: Do you have the balls?
« Reply #47 on: March 16, 2020, 12:49:38 PM »
Great depression coming. Human population wiped out. Banks bankrupt. Stocks go to 0. Followed by nuclear war. Money is worthless.
Long gold, bunker, food. Maybe some weapons as hedge for zombies.

please be kind and swab your gold coins with sanitizer before you use them at the market

Castanza

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Re: Do you have the balls?
« Reply #48 on: March 16, 2020, 12:58:12 PM »
Great depression coming. Human population wiped out. Banks bankrupt. Stocks go to 0. Followed by nuclear war. Money is worthless.
Long gold, bunker, food. Maybe some weapons as hedge for zombies.

I did pickup some ammo (not for this purpose) Saturday. The store was unbelievable packed. You had everyone there from the preppers wearing WWI style gas masks to the "show me where the bullets go" former anti-gun guy. There are a lot of irrational people out there (see Samsclub wine bottle stabbing). I'd recommend avoiding the masses simply because of the crazies running around.

I hope you all stay safe out there.

______________________________________

LEAPS are certainly looking interesting, but I have a hard time believing we are anywhere near the bottom. IV is so high right now on many equities you'd likely be losing money even if your position was itm.


ERICOPOLY

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Re: Do you have the balls?
« Reply #49 on: March 16, 2020, 01:12:07 PM »
I don't know what the name of this strategy is...  if anyone knows a name for it that's all I'm after.

Hypothetical trading behavior as follows:  You begin with enough cash to buy the common without margin, but instead you expect volatility and don't care about potentially losing $5.50 per share between now and 2022.  So you begin by purchasing enough LEAPS calls to represent the notional value of the amount of common you could otherwise purchase with your remaining cash.  You keep doing that every time the stock drops $10.
WFC at $50.  Pay $5.50 for 2022 at-the-money leaps.
WFC at $40.  Pay another $5.50 for 2022 at-the-money leaps.
WFC at $30.  Pay another $5.50 for 2022 at-the-money leaps
WFC at $20.  Pay another $5.50 for 2022 at-the-money leaps
WFC at $10.  Pay another $5.50 for 2022 at-the-money leaps
etc.. etc...

You just keep accumulating calls.

2022 is on the other side of an estimated timeline for a vaccine to be widely available (12-18 months)

Jokes aside, is there a name for this kind of a trading strategy?

Bagholding?

Have they put you on a respirator yet?

Got your fill of tangible book equity bank stocks before a depression?

Ahh.  What we've got here is a gloater.