Be advised: this thread is not for serious in-depth discussion of weighty topics (we have a link for that), this thread is not for anything Culture War related. This thread is for Fun. You got jokes? Share 'em. You got silly questions? Ask 'em.
- 205
- 1
Jump in the discussion.
No email address required.
Notes -
I've recently been getting into fixed-income investing as a way to learn by doing. I'm investing a little bit of money each month (that I can afford to lose). If my after tax yield is a full 1% higher than I could get from my HYSA over a six month time period, with no principal loss of >5% over any thirty day window, I'll say that I have a layman's grasp on the topic. If not, I'll have to figure out what I did wrong.
So far I've been floored by the complexity of fixed income vs equities. I honestly don't know how people who do it professionally manage.
Does anybody else have an unconventional pastime right now?
Why so few details? Can you share what you’ve learned? Spill it.
What are you buying, and where are you buying it?
I’ve also gotten into active trading. I so badly want to make it a reliable source of income. Sometimes I feel like lately, the market is like a beach wave forming. I need to paddle as hard as I can to catch the wave and ride it to shore, or else the water will swell briefly around me but leave me in the water, replaced by AI.
How far into the journey are you? What style do you focus on? (Day-, swing-, position-trading)?
Thanks for asking. I'm always happy to info-dump about the trading I'm up to. I would also love to hear what you're doing.
I'm focusing on option-selling strategies. Right now that just looks like selling a lot of puts.
I've been learning/trading small for about 3 years, and I significantly increased my account size last summer, so the jury's still out on how successful I'll be. The put-selling is on margin, and for those reading who think that sounds scary, it doesn't necessarily mean I'm borrowing money to trade. But being short puts does mean at any time I can be forced to buy shares of some company, and I definitely do not have the cash to buy all the shares I've potentially obligated myself to buy.
To more directly answer your question, VTI accounts for about 80% of my trading account's net value, and I'm selling puts with the buying power that the VTI position affords me. Other significant positions include:
Five short puts on SLV + ~80 shares of SLV (bought with the premium from earlier SLV puts). I'm happy to report I was executing this strategy during the silver bubble's runup and popping last January and wasn't financially ruined.
A pretty large position in /MES (micro e-mini S&P 500 futures). This is short puts with a twist. Basically if the market goes up, I make a few hundred bucks. If it goes down 10%, I make a few thousand, but if it goes down 25%, I lose my house (mostly kidding...). If we get another Liberation Day I would have to have somewhere around $20,000 cash on hand to handle the margin requirements to keep this open.
Synthetic longs. (Long call financed by a--you guessed it--short put). Right now my most successful one is on Intel. On July 25th of last year I bought a $20 call and sold a $20 put and paid a net of $237 for it. This position is now worth about $7,500. These kinds of positions are always about fantastic strokes of luck, but I never imagined INTC would moon like this.
A modest number of short puts on random S&P 500 companies.
Intriguing strat!
I've only just started looking into options. It seems like it will have a lower hit rate but could sometimes be really fun. I might try some leaps, calls and puts at some point. Though these contracts seem like they'll favor inside traders more than anyone. The theta decay looks pretty brutal if you're not pretty spot on with your timing.
When you buy both a long and a put, are you basically betting on increased volatility? Not sure I understand.
I've been learning for 2 years. Ironically my first year was better than my second year. I'm too risk averse if anything.
I'm working on all major aspects of the 'hobby': macro, fundamental analysis, technical analysis and chart studies, the mental part (major focus this year) and also looking at the social/flock/memetics stuff somewhat.
It's definitely worth getting familiar with options. It seems like you already know the basics, and I believe everyone can benefit from understanding their risks and benefits.
Yeah, and you can benefit from this by selling those options. Then you have theta decay on your side. Check out tasty trade on Youtube.
Assuming you're referring to my synthetic longs, I'm selling a put and buying a call. It's combining two bullish positions to take advantage of their leverage and different cash flows (one uses cash to open and the other generates cash to open). Buying one call with the money received from selling one put will simulate the risk profile of owning 100 shares of the underlying. You're exposed to all the downside and all the upside.
But, yeah in general having a long put and a long call would need to count on a big move or an increase in volatility to be profitable.
Doesn't this expose you to potentially unlimited downside? If the company were to go tits up after you sold those put contracts, you would be obligated to buy a lot of horrible shares, no?
Ask yourself: if you had the cash you needed to actually buy 100 shares of something you thought was a good hold, would all this worry about exposure to the downside suddenly disappear?
If so, then it’s not the downside risk that you’re worried about; you’ve been through market volatility without panic selling. You’re worried about your cash position. Cash can be managed! Positions can also be managed to minimize chances of assignment. There’s recourse. Worst case, you wake up with 100 shares of some piece of crap and you owe your broker thousands of dollars. You can simply sell the shares to pay back the broker, and you may have to eat whatever loss makes up the shortfall. You just make sure you can handle that loss. And at the end of the month you pay the $4 in tax-deductible margin interest.
So why not use the money you set aside for the risk on even more call options instead? Does selling puts really make your bet more +EV?
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link