site banner
PaperclipPerfector  1mo ago (text post)   2640 thread views

Friday Fun Thread for March 29, 2024

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.

3
Top Bottom Old Controversial Comments
Jump in the discussion.

No email address required.

So I've spent three weeks selling short dated covered calls for COIN and walked away with a whopping $250 I didn't have before. Doesn't sound like much, but so far the stock has never come within $50 of my strike price. If, and I understand it's a big if, I keep this up for a whole year, I'll have earned over a 10% return on underlying assets worth $25,000-ish.

The first week was nerve wracking. The second week less so, except for one day where the stock shot up $30 intra-day with $50 left to go to my strike price. But with 3 days left, I sincerely doubted it wouldn't pull back. It did. The third week as soon as I sold my covered call a judge issued a decision allowing an SEC lawsuit to move forward and the price of the option I sold immediately got cut in half.

The more of these I successfully sell, the more I feel I have a buffer to close my position at a loss if things start going badly. I'm more shocked that there are enough degenerate gamblers out there willing to throw a Benjamin at the off chance COIN shoots up 50% in 4 days.

We shall see when I receive my comeuppance.

Have you heard the phrase. Picking up pennies in front of a steam roller? You're much better off in an index fund if youre looking for 10% returns.

In this case, he's covered since he owns the underlying security. So the worst that would happen is his COIN stock gets called away (at a very inflated price to boot).

It gets called at the strike price; not the trading price.

I guess the strike price is high so he wouldn’t be too bent out of shape at selling.

The loss is the delta between the market price and the strike price.

I think he was liquidating anyways though -- so if he sells on day 1 for market price, he's not getting any appreciation regardless.

In that case, continuing to sell the deep out of the money calls is simply risking the asset dropping in value.

Ah i missed that they were covered. Wouldn't that negate the inflated price thought? That is the whole point of the options people are buying.

What is this place?

This website is a place for people who want to move past shady thinking and test their ideas in a court of people who don't all share the same biases. Our goal is to optimize for light, not heat; this is a group effort, and all commentators are asked to do their part.

The weekly Culture War threads host the most controversial topics and are the most visible aspect of The Motte. However, many other topics are appropriate here. We encourage people to post anything related to science, politics, or philosophy; if in doubt, post!

Check out The Vault for an archive of old quality posts. You are encouraged to crosspost these elsewhere.


Why are you called The Motte?

A motte is a stone keep on a raised earthwork common in early medieval fortifications. More pertinently, it's an element in a rhetorical move called a "Motte-and-Bailey", originally identified by philosopher Nicholas Shackel. It describes the tendency in discourse for people to move from a controversial but high value claim to a defensible but less exciting one upon any resistance to the former. He likens this to the medieval fortification, where a desirable land (the bailey) is abandoned when in danger for the more easily defended motte. In Shackel's words, "The Motte represents the defensible but undesired propositions to which one retreats when hard pressed."

On The Motte, always attempt to remain inside your defensible territory, even if you are not being pressed.


New post guidelines

If you're posting something that isn't related to the culture war, we encourage you to post a thread for it. A submission statement is highly appreciated, but isn't necessary for text posts or links to largely-text posts such as blogs or news articles; if we're unsure of the value of your post, we might remove it until you add a submission statement. A submission statement is required for non-text sources (videos, podcasts, images).

Culture war posts go in the culture war thread; all links must either include a submission statement or significant commentary. Bare links without those will be removed.

If in doubt, please post it!


Rules


Recommended Posts And Communities

Recommended Realtime Chats