Investments Trade Log

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giskard
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Re: Investments Trade Log

Post by giskard »

I have closed some of my calls on STX (at 200% profit btw) now that the hard drive shortage has made Joe Weisenthal's bloomberg newsletter this week and it was featured on the front page of market watch, as well as Morgan Stanley report was issued on it.

I'm still holding some of the longer dated calls because I still the think the extent and duration of this shortage and pricing power the duopoly of Seagate & Western Digital is very underestimated.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

@giskard

Random thought I had the other day...

With the way options prices swing on long calls, I've wondered about artillery shelling a bunch of different tickers. Meaning buying single call options contracts on a large range of tickers 6 months out and setting up automatic sells at 10-15% profit range. Preferably buy these on a 2-3 red day streak. Sit back and profit on the long calls that hit the price and the ones that don't hit, just accept total loss. If win rate is high enough, ones profits in the end. One rule you might do is exclude any options that are 2 weeks before the earning date just so you don't buy too high because of IV. Also 6 months out is good to avoid theta decay. Don't think this would work if you're too close to expiry.

If I had the time of day, I'd be very curious to back test something like this. Could be a fun data project...would just need to pull in yahoo finance information. Find the options contract name (for instance SPY20200510430C) or something like that which could serve as your primary key in SQL or something. That would be your X axis. Y axis would be your price. X range is the day the contract was bought until expiry. Repeat over 100 different tickers or so and mark every time the price becomes more than 10-15% from when the option is purchased. Willing to bet a lot of times there is a chance to profit.

Even safer way to do this would be to artillery shell debit spreads. Same rules above apply. One long call + One short call. Drawback here is depending on brokerage the sell side has to be covered and the long call may not count as collateral (like with Vanguard).

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giskard
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Re: Investments Trade Log

Post by giskard »

Lemur wrote:
Thu May 20, 2021 4:11 pm
@giskard

Random thought I had the other day...

With the way options prices swing on long calls, I've wondered about artillery shelling a bunch of different tickers. Meaning buying single call options contracts on a large range of tickers 6 months out and setting up automatic sells at 10-15% profit range. Preferably buy these on a 2-3 red day streak. Sit back and profit on the long calls that hit the price and the ones that don't hit, just accept total loss. If win rate is high enough, ones profits in the end. One rule you might do is exclude any options that are 2 weeks before the earning date just so you don't buy too high because of IV. Also 6 months out is good to avoid theta decay. Don't think this would work if you're too close to expiry.

If I had the time of day, I'd be very curious to back test something like this. Could be a fun data project...would just need to pull in yahoo finance information. Find the options contract name (for instance SPY20200510430C) or something like that which could serve as your primary key in SQL or something. That would be your X axis. Y axis would be your price. X range is the day the contract was bought until expiry. Repeat over 100 different tickers or so and mark every time the price becomes more than 10-15% from when the option is purchased. Willing to bet a lot of times there is a chance to profit.

Even safer way to do this would be to artillery shell debit spreads. Same rules above apply. One long call + One short call. Drawback here is depending on brokerage the sell side has to be covered and the long call may not count as collateral (like with Vanguard).
It would probably work with the right constraints and the right market conditions, I would love to backtest this. I have so many options strategies I want to backtest, there are endless possibilities.

The options market seems to be so inefficient there are tons of ways of make money in it.

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giskard
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Re: Investments Trade Log

Post by giskard »

Sold some puts on BTU because it had a huge meltup and then crash which left the IV very elevated. BTU is trading at like 1/4 revenue so the valuation is such that I'd be fine if I got assigned at $5.

The issue with BTU is that there is a "ban" on Australian coal going into China right now, but as we know when China "bans" something it's highly political and usually temporary to force some kind of concession. I looked at the export numbers for Australia and they are the highest ever levels so that means China is importing a LOT of stuff.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

I almost never buy long calls or puts by themselves but this one seems too easy. I fully expect management to dilute the shareholders and everyone to dump and take profits. This is a classic pump and dump.

For $11.15 a contract, I purchased 2 puts on AMC for August 20, 2021 expiration (wanted to give myself enough time for this to play out) at the $30 strike price in my IRA. Total outlay was $2,230. IV is currently high but this stock is one of those MEME stocks that "mooned." There is some IV crush risk here but I think this will still elevated a bit in the near term. This stock was trading at $7 pre-covid crash and was trending downwards prior to that. Currently trading at $52.26. I fully expect this stock to come back under $30 very soon.

I am debating on when I should sell.

1.) I could sell as soon as tomorrow if I'm at profit. Advantage here is I can get in / get out. I do fear IV crush.
2.) Wait until the stock is ITM and then sell. If IV is still high, I'll profit greatly anyway.

Normally I would want to turn this into a bear put spread but I don't want to free up capital to sell puts on this company or potentially be stuck with the stock. Also I went far out of the money anyway. I would have to go even deeper on the sold put and that isn't worth it.

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giskard
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Re: Investments Trade Log

Post by giskard »

Lemur wrote:
Thu Jun 03, 2021 8:46 am
I almost never buy long calls or puts by themselves but this one seems too easy. I fully expect management to dilute the shareholders and everyone to dump and take profits. This is a classic pump and dump.

For $11.15 a contract, I purchased 2 puts on AMC for August 20, 2021 expiration (wanted to give myself enough time for this to play out) at the $30 strike price in my IRA. Total outlay was $2,230. IV is currently high but this stock is one of those MEME stocks that "mooned." There is some IV crush risk here but I think this will still elevated a bit in the near term. This stock was trading at $7 pre-covid crash and was trending downwards prior to that. Currently trading at $52.26. I fully expect this stock to come back under $30 very soon.

I am debating on when I should sell.

1.) I could sell as soon as tomorrow if I'm at profit. Advantage here is I can get in / get out. I do fear IV crush.
2.) Wait until the stock is ITM and then sell. If IV is still high, I'll profit greatly anyway.

Normally I would want to turn this into a bear put spread but I don't want to free up capital to sell puts on this company or potentially be stuck with the stock. Also I went far out of the money anyway. I would have to go even deeper on the sold put and that isn't worth it.
These are def melting ice cubes just due to the IV crush. Idk what these are at but I was actually looking at selling puts yesterday and I saw IV in the 400% range.

I do think the stock will get to $30 soon but the intrinsic value of the puts is small compared to what you paid if IV goes to normal levels.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

Yep - That is what I was thinking. Speculating here for sure but with this being so volatile + IV crush, I’m best served dumping these at the next dip. Hopefully get a pre-market dump.

Salathor
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Re: Investments Trade Log

Post by Salathor »

giskard wrote:
Sat May 22, 2021 4:09 pm
The options market seems to be so inefficient there are tons of ways of make money in it.
Are you referring to options on more thinly traded tickers here? A few years ago I got seduced by options and ended up doing a bunch of research on SPY options. In the end, I decided not to play because my math always showed that the expected value of the option ended up being exactly the same as the average daily return of the index--0.04% per day, if I remember correctly.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

Did not get the morning AMC crash I was hoping for and since IV is still elevated, I decided to change the dynamics of my position to a put calendar spread.

https://www.fidelity.com/learning-cente ... pread-puts

So I freed up $9k in capital and sold 3 PUTS at the AMC 06/11/21 $30 strike. I collected a quick $549 premium for a weekly. This covers 24.6% of the original cost of the long put and gives me a bit more flexibility.

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giskard
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Re: Investments Trade Log

Post by giskard »

Salathor wrote:
Thu Jun 03, 2021 5:09 pm
Are you referring to options on more thinly traded tickers here? A few years ago I got seduced by options and ended up doing a bunch of research on SPY options. In the end, I decided not to play because my math always showed that the expected value of the option ended up being exactly the same as the average daily return of the index--0.04% per day, if I remember correctly.
No not SPY, I'm talking about random mispricings on thinly traded stuff. I get insane fills all the time, I just keep a look out for random e.g. +10% intraday moves on a variety of individual stocks / ETFs, it causes the options to move wildly a lot of times.

If you want to do SPY there are a lot of traders that have noticed the "tail wags the dog" with regards to the indexes, meaning that you can get an edge on SPY by looking at options flows on them. Check out the "nope index" for example.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

Well I took a chance on this AMC but I'm glad I am off this ride. I closed out my longs for a loss at opening this morning right before a 17% run-up (my timing could not have been more luckier) and then used the proceeds to purchase $29 puts to cover my short puts in the odd case AMC takes a dive this week (I don't want to be assigned on these). The short puts have offset some of the loss on the longs thankfully but I am still willing to pay for the downside protection.

Overall took a $75 loss all combined. I've now paid for my education in FOMO'ing into puts.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

- Shares called away on AMD last Friday for $80 a share but bought back in for $80.90 and more covered calls for $87.50 strike in a month. The premiums made on the covered calls were enough to cover the upside I lost from the shares called away.

- Loving covered calls on Nokia. I made $1400 in premium and Nokia moves like a dinosaur. I am always cognizant of earnings and I don't like having active contracts around them. I think Nokia is due for another big pop based on it consolidating and nothing but good news stories. Also U.S. banned Huawei so we should hear reports about increased business.

- To point 2, if MAC stays above $17 by end of week, I can rid myself of this meme. No more memes for me. I was tempted today to throw my $48k behind another high IV stock (instead of getting back into AMD) but I'm glad I did not. This capital will likely be put into T. I want to treat T like Nokia - sell covered calls because the price movement is so predictable and it moves like a dinosaur. Wouldn't mind it for a long-term either.

- My overall strategy changed just slightly on CCs in my active portfolio. I used to go with 0.30 delta but reduced to 0.25 delta. Overtime I've learned that I really hate having shares called away after a big pop. I'm willing to trade less premium to potentially keep more upside. I also make sure I'm under 30 days, I have a buy to close set-up already, and I have no active options positions around earnings.

- Somehow despite my 2 blunders early January, My YTD return is beating SPY by 11%.

OffBy2Error
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Re: Investments Trade Log

Post by OffBy2Error »

I have not (yet) found where you said how many $5 NOK shares you have, but $1400 premium must be either cumulative over a long duration (you said in April that you stopped cc on NOK) or you have a LOT of shares.

T has been interesting to watch. But, halving the dividend, being significantly far (possibly a few years) behind on 5G, Starlink being in Beta (T does not need more competition), and now purely focusing on their core business (which is far behind competition) and I just do not see the value to be had anytime soon. Even the argument that you understand the movements seems like it can be questioned since halving the dividend MUST mean they need to focus on improving fundamentals which (should) affect stock price movements.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

@OffBy2Error - Yeah I watch NOK just about daily and I made the right call stopping the CCs in April. They popped right on earnings and afterwards I was able to sell the $5.50 on one week (barely getting by) and now selling the $6.00 strike. I usually stop doing CCs around earnings and I continue on after earnings. I've a lot of shares of NOK. 9200 shares.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

Finally got rid of PLTR. Off another ride. Used Capital to double my position in Walmart. I've built up 'recession proof' and REIT stocks since the start of the year.

I'm out of the spread game for a while as well.

I think I'm just gonna stick with monthly OTM CCs and close out at 50% profit like I've always done. Mainly been so busy with work - that I need my mind occupied elsewhere.

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giskard
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Re: Investments Trade Log

Post by giskard »

Lemur wrote:
Thu Jun 24, 2021 12:47 pm
Finally got rid of PLTR. Off another ride. Used Capital to double my position in Walmart. I've built up 'recession proof' and REIT stocks since the start of the year.

I'm out of the spread game for a while as well.

I think I'm just gonna stick with monthly OTM CCs and close out at 50% profit like I've always done. Mainly been so busy with work - that I need my mind occupied elsewhere.
Nice work getting rid of PLTR, need to do that as well. I've been watching PLTR recover, it looks like tech is coming back with bond yields leveling off. I'll try to sell some covered calls on it this week or next.

Been selling a few covered calls in general some of my mining / commodity related positions.

Sadly vol is kinda low now. I'm afraid the summer might be boring! Need to get some volatility in this market!

plow_2
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Re: Investments Trade Log

Post by plow_2 »

small investment in Mu.
Considering adding to GBTC

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Lemur
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Re: Investments Trade Log

Post by Lemur »

- Sold a $30 Put on CRSR on August 20. IV is mid-range but I believe this one is done bottoming out. Aiming for 50% profit.
- That one week where I was selling put credit spreads on AMC...looking at it now I am lucky I stopped playing that.
- Added to BAC position
- Rolled up and out a CC on NOK from $6.00 to $6.50. Took a small debit but definitely worth it consider the amount of shares I own on this.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

If AMC makes another run up to $50 by earnings on Aug 04, 2021 - Aug 09, 2021, I feel a great temptation to short the shares. Not only is the stock highly overvalued to begin with, there are now lately strong concerns with COVID-Delta variants disruptions. Specifically news articles on the mask mandates and such.

I've never shorted a stock before but have only read about it. I understand the max gain and unlimited loss concept and the margin requirements / margin call scenarios. One napkin math I'm trying to figure out is if it would be worth it to have a LEAP call just incase as a hedge if my bet is wrong - though with the high IV on this stock, the insurance is expensive.

Edit: Actually a terrible idea to use an OTM call option as a hedge. It basically throws your money away. :lol:
Last edited by Lemur on Wed Jul 28, 2021 8:57 pm, edited 1 time in total.

Married2aSwabian
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Re: Investments Trade Log

Post by Married2aSwabian »

I shorted a stock for first time in late 2019 and completed the trade - gave back the shares in Sept last year (CACC). Borrowed them at $409 and returned at around $300, so made out pretty good. I set up an Ameritrade account and checked a couple of YouTube videos to get details of nuts and bolts of shorting. One thing to note - not all stocks have shares available to short. There is some term like “easy to short” or “hard to short” driven by current market sentiment and how many traders are currently betting against.
Shorting AMC at $50 sounds like a good move. How can movie theater business fully recover again? Reddit crowd is still holding the line there, though, right?
Actually, if CACC gets back up to $500, might also be a good one to short again. I’ve read many articles in past couple of years explaining how sub-prime car loan biz could be next bubble. There is a ton of car loan debt in US at $1.4 trillion and (new and used) vehicles are hugely overpriced right now.

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