Investments Trade Log

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Dream of Freedom
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Re: Investments Trade Log

Post by Dream of Freedom »

Sold HCKT Feb 21 2020 17.5 Put @1.20 with intent to take possession for a long term position.
Last edited by Dream of Freedom on Tue Jan 21, 2020 11:39 am, edited 1 time in total.

Dream of Freedom
Posts: 753
Joined: Wed Aug 29, 2012 5:58 pm
Location: Nebraska, US

Re: Investments Trade Log

Post by Dream of Freedom »

C40 wrote:
Mon Jan 20, 2020 11:16 pm
Before I go dumping more and more of my IRA money into REITS, do you guys have any suggestions on where I should learn more about the REIT asset class in general? (to make sure I'm at least somewhat aware of market trends, risks of the investment type, risks of RE price bubble pops, likelihood of REIT company bankruptcies vs. 'normal' stocks.)
Hoya Capital does some good articles on the reit sector and subsectors.
https://seekingalpha.com/author/hoya-ca ... r_articles

Brad Thomas goes over individual picks and calls out ones to avoid.
https://seekingalpha.com/author/brad-th ... r_articles

In general you should look for internal rather than external management. I have had good luck with reits that are undergoing the conversion from external to internal though. You may want to be cautious of mall reits as many of their tenets are at ground zero of the switch to online retail. The same trend is a boon to industrial reits though as more warehouse space is required. Have fun stock picking.

George the original one
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Re: Investments Trade Log

Post by George the original one »

C40 wrote:
Mon Jan 20, 2020 11:16 pm
Another thing I suppose I should consider are (other types of) MLPs as well.
I've enjoyed MLPs, but as a retiree, I decided I didn't want to spend my time hassling with their tax basis when buying/selling, so I stopped dealing in MLPs. The lower your taxable income the less tax benefit you'll realize, so if you're not paying any federal income tax, there's really no reason to go messing with MLPs (unless you see an easy capital gain).

black_son_of_gray
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Re: Investments Trade Log

Post by black_son_of_gray »

@C40 Can't recommend a particular learning resource (sorry), but I would advise you to consider 1) any given REIT's sensitivity to changes in interest rates (could be high) and 2) as a result, how that would affect the investment if interest rates went up/down/sideways. Know what you're getting into with mortgage REITs.

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C40
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Re: Investments Trade Log

Post by C40 »

Thanks guys.

@Dream of Freedom - I'll take a look at those. The book I'm reading places a lot of emphasis on internal management and a significant amount of insider ownership. I have done decently well with REITS so far, selecting sectors that I think will do well. I've avoided Malls entirely and only bought retail/commercial REITS for companies that I think will continue needing physical spaces. My best bet was on data centers, with DLR being I believe the fastest appreciating stock I've owned. I also have a longer-term bet on the Boomer generation clinging to life and spending every penny on themselves by investing in senior care and skilled nursing facilities. Those seem trickier with all the regulatory changes in the mix.

George the original one wrote:
Tue Jan 21, 2020 12:53 pm
.... so if you're not paying any federal income tax, there's really no reason to go messing with MLPs (unless you see an easy capital gain).
I am not paying any federal income tax directly, but I do own shares of many companies that pay taxes. As part of my objection to the various misuses of tax money (particularly wars) I feel good about having investments that pay little/no tax.

--------------

@black_son_of_gray:

I have been becoming aware of differences between equity and mortgage REITS (that started years ago when I dabbled in AGNC for a while after their big price drop but decided to sell after about 6 months. I have and plan to focus entirely on equity REITS. I do need to learn more about the extent they are impacted by interest rate increases.

ertyu
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Re: Investments Trade Log

Post by ertyu »

Are you fucking kidding me TSLA reached 594 at some point yesterday (since down to 569.56). What the utter bleeding fuck. If that thing crosses 600 on an impulse move I'm putting my entire nw in puts, jesus fucking christ-

Jason

Re: Investments Trade Log

Post by Jason »

It wasn't Tesla, but at least a front page air disaster that wasn't Boeing's fault.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

@ertyu

Incredibly tempting right?

thedollar
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Re: Investments Trade Log

Post by thedollar »

@ertyu @lemur

hi guys. I can barely see you from up here @ aftermarket $620 (edit: 650 now) :roll: :lol:

On a serious note, this may be a little high but I'll hold. I like how the metrics are developing. It seems that they are confident on only cashflow positive and profitable quarters from now on.

Are you guys buying puts/shorting?

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Seppia
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Location: South Florida

Re: Investments Trade Log

Post by Seppia »

I need help from experienced traders please.

I would like to have along term bet that TSLA price will be significantly lower sometime in the future.
Since I am confident that its intrinsic value is only a fraction of its actual Market Cap, but I am also aware that, short term, the markets can be completely irrational, the longer time horizon, the better.
I also want to avoid the infinite downside of selling short.

It looks like the instrument for me is put options, correct?

The furthest date I can find is sometime in January and June 2022, but I see there's little volumes available.
WTF am I supposed to do with 10 contracts?
Also, what is "open interest"?

Last question: what about counterparty risk?

Sorry for the n00b questions but I have never ever looked into options. The opportunity seems just way too juicy now though

Thanks in advance

ertyu
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Re: Investments Trade Log

Post by ertyu »

Counterparty risk will be unavoidable regardless of which options bet you make. It is also present and I am not sure you can eliminate it. You can't choose who you buy your options from, your broker just sells you some. Because the only way to avoid counterparty risk is not to make the trade, I'd ignore it. Ironically it's short-selling that reduces it best :lol:

I think you are correct in pointing out the irrationality attached to this ticker. This leads you to wanting to make a long-term bet. The longer the term, however, the bigger the cost. For your bet to be profitable, you need the fall in share price to exceed strike price + brokerage fee + _loss of value to your options due to time decay_. That means the longer term the bet, the larger the drop in price you'd need to be profitable.

About open interest and such terms: I could tell you, but I'll send you to investopedia.com instead. Very useful resource for when you need a term looked up. I've learned a lot there.

As for how to best structure the trade, I am not sure. I would suggest that you begin by reading up on the most common strategies - learn about straddles, strangles, iron condors, bear calls, calendar and vertical spreads, also ratio spreads. <-- my suggestion of terms to look up.

Share if you decide on one.

ertyu
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Re: Investments Trade Log

Post by ertyu »

thedollar wrote:
Wed Jan 29, 2020 5:00 pm
@ertyu @lemur

hi guys. I can barely see you from up here @ aftermarket $620 (edit: 650 now) :roll: :lol:
I am still a chicken (should be an identifiable trader group along with the bears and the bulls). But I'm rooting for you man. Pandemic in China might shake things up for TSLA tho - but let's see how things develop

IlliniDave
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Re: Investments Trade Log

Post by IlliniDave »

I lowered my equity exposure by about 5% yesterday. Buddy of mine (semi-doomsday fanatic) dumped all of his except his employer's stock, odd choice keeping employer's stock but I don't think he's got a whole lot of it. I'm balancing what I see as surging political risk and corona virus versus USMCA. Looks like the timing was good if the open implied by Dow futures is indicative, but the move was too small to have much affect on overall return numbers. But it was about 1 years worth of tightened-belt living expenses moved into short-term treasury bonds (my workplace retirement plan added such a fund recently--yay!).

Dream of Freedom
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Re: Investments Trade Log

Post by Dream of Freedom »

@Seppia

The January 2022 620 puts currently trades at $146 per share. Every contact is for 100 shares meaning $14600 per contact. I don't know what position size you have in mind, but that's why you would want a spread to lower the cost.

So let's go over some possibilities.

A. You buy January 2022 630 puts and sell January 2022 600 put of course you can play with the strike prices
It does cap your upside some but with the lower outlay it's better from a risk/reward point of view

B. You buy January 2022 630 puts and sell February 7 2020 610 puts. When the February leg expires or you buy it back just before it expires if it is in the money. Then you sell one for next week and repeat. The idea here is that the time value of the contact decreases faster and faster as the expiration date nears. So you can collect the difference in theta between the short and long term contacts.This is a bit more work than A

C Pair trade. You can short Tesla and go long a different automaker you like. This would help to lower market risk. So if the market as a whole goes up you won't be hurt as much.

D you simply short the thing with a stop loss at what you are willing to risk.

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Seppia
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Location: South Florida

Re: Investments Trade Log

Post by Seppia »

Thanks all for the kind answers.
I just figured out I would need to open an account with interactive brokers just for that, instruments aren’t available in my trading accounts.
This would generate the need to produce much more tax documents (interactive brokers isn’t based in Italy).
I guess the idea of shorting TSLA will be put in my “too hard” pile.

thedollar
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Joined: Tue Feb 21, 2017 4:07 am

Re: Investments Trade Log

Post by thedollar »

@Seppia

I'm glad. I think we all agree that the intrinsic value does not match market cap, but shorting or buying put options for the next 1-3 years would be a bet on market irrationality/current valuation method changing in addition to a bet on Tesla not continuing its high growth. We have different views on the growth, probably, but market irrationality seems to have been carrying on for years looking at tsla. Why would it suddenly end in the next few years? Just my opinion the valuation is currently mostly based on 'forward looking statements' and I don't think it will suddenly change to a P/E valuation comparable to other car companies. They'll continue putting out forward looking statements and people will continue to bet on those.

thedollar
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Re: Investments Trade Log

Post by thedollar »

For the log:

tsla @ USD 758

Gonna hold onto my position despite the massive gains

theanimal
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Re: Investments Trade Log

Post by theanimal »

That's insane

Jason

Re: Investments Trade Log

Post by Jason »

I have some Zoom Video. Popped 15% yesterday due to a Microsoft issue as well as CoronaVirus fears. Video conferencing preferable to traveling and face to face meetings.

IlliniDave
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Re: Investments Trade Log

Post by IlliniDave »

Jason wrote:
Tue Feb 04, 2020 6:43 am
I have some Zoom Video. Popped 15% yesterday due to a Microsoft issue as well as CoronaVirus fears. Video conferencing preferable to traveling and face to face meetings.
Interesting observation re VTC. Had a little surge after 9/11 too, but ultimately people missed their frequent flier miles. I'm not a stock-picker but I've heard indications some companies are rethinking their supply chains and if the Chinese lockdown persists they might start acting to shorten them. That'll potentially be an additional boost to N. American manufacturing, and Mexico could benefit a lot.

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