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PaperclipPerfector  1mo ago (text post)   2650 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.

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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.

As I understand it, @WhiningCoil 's strategy of covered calls is the opposite. He's getting a slow but steady return by giving up the chance of a big upshot. It's actually negative EV, because the big upshots are what drives the market, but it can make a living.

For real "pennies in front of a steam roller" you need to sell naked puts... I've been there and it's a hell of a drug...

Yes i didn't notice he said covered. My mistake for sure.

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