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Talking stocks, trading, and investing in general

Piobaire

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I sold about 40k worth of puts today.

 

Piobaire

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I'm not day trading, I'm selling options. Totally different.
 

Omega Male

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Who was it piling into ARKK last week?
 

Piobaire

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Momma Cathie will come back! (Not me buying it, btw, a newer poster.)

My big trade today was on Chewy's. I've been looking at them for some time. I think their patrons won't evaporate after COVID. We've been using them since pre-COVID and I know a lot of pet folks have been too. I think they've captured more permanent customers through COVID. Their financials are showing profitability in the not too distant future.

STO x3 4/16 85p for $8.00! That's some tendies.
 

brokencycle

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The business lingo that has run rampant in our organization is "crisp" as in "we need to be very crisp on this." ALL THE FUCKING TIME!
 

usctrojans31

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I have been a net buyer of ARKK well before the recent hysteria and have used it as a rebalance play a few times along the way. It comes down to whether you believe in the investment thesis rather than the mania. And what the risk appetite is.
 

double00

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The business lingo that has run rampant in our organization is "crisp" as in "we need to be very crisp on this." ALL THE FUCKING TIME!
you could try 'for realzies' 'hey we need to do this for realzies people'
 

jbarwick

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I haven’t heard Crisp before. I worked at Hollister in maybe 2005 and my manager would always tell us to “Clutch” the folding making sure everything was lined up and looking good.
 

gdl203

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Momma Cathie will come back! (Not me buying it, btw, a newer poster.)

My big trade today was on Chewy's. I've been looking at them for some time. I think their patrons won't evaporate after COVID. We've been using them since pre-COVID and I know a lot of pet folks have been too. I think they've captured more permanent customers through COVID. Their financials are showing profitability in the not too distant future.

STO x3 4/16 85p for $8.00! That's some tendies.
If you believe the stock has a strong profile and the company's earnings will grow faster than expected, why are you selling puts and limiting your upside to the premium? Why not buy the underlying or buy calls?
 

Piobaire

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If you believe the stock has a strong profile and the company's earnings will grow faster than expected, why are you selling puts and limiting your upside to the premium? Why not buy the underlying or buy calls?
Selling the put ATM money gives me a 50 delta of getting assigned with the rather juicy premiums. With the market currently being so jankie doesn’t this play make sense? As to buying calls...what percent of options expire worthless? Everything I’ve read indicates 70-80%. I figure I’d rather be on the other end of that arrangement.
 

gdl203

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1) it sounded like you were bullish on the stock, which makes me wonder why you'd use a short put strategy to execute a (longer term?) bullish trade. Your upside is limited and the trade is short term.
2) if the market is janky or volatile, you like the idea of being the insurance company here and getting paid a premium to assume all the risk?

I dunno - it just seems like the strategy doesn't fit the argument. Just buy the underlying or a cal if you think a stock is undervalued or has great prospects.
 

Piobaire

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Selling a put is really a bullish move in general as you're indicating sentiment the stock will stay above the strike you sold it at, no? In this particular case it's not quite as bullish as I hope I get assigned, plus with the premiums, that knocks another $8 or 9.4% off my cost basis. That also serves the additional purpose of an $8 range buffer for me if $85 really isn't the bottom. If I bought today at 85, and it dropped to $70, I'd be down $15 a share. If the bottom ends up being $70, due to my put premium, I'm only down $7. (I'd also start writing covered calls with a 20 delta to offset the loss.)

If the stock starts to move rapidly up I can always just buy the number of shares I want and let this put expire, keeping the premiums. Another tactic would be to just let these puts expire, collecting the $800, and sell more puts on a weekly option that's a little bit in the money and get assigned. Those ITM puts usually offer pretty good premiums as delta will be moving towards 1.

I know you're an IB guy and know way more about finance than I do but I don't think the above analysis is faulty. I know my self-taught knowledge is limited, and I'm not even playing with iron condors, the various spread and straddle strategies, etc., but I honestly don't see a hole in my thinking here.

Lastly, I'm still just a buy and hold index fund guy for the vast majority of our nest egg and just fooling around with this a bit for fun and a little profit. In fact I'm thinking moving some cash out of our reserves and buy some more SPY today or next week.
 

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