**OFFICIAL** Trading and Investing Thread: Part XVI -- BAG HOLDING EDITION

[Elias373]

who was buying WBA here not long ago... imagine not listening to me and buying PLTR instead

[RobParks2M]

Dayum . . . RIP, Walgreens. Will be closing a bunch of stores and cutting divvy.

Absolute shytco. Happy to hear it tbh.

[taf1968]

Absolute shytco. Happy to hear it tbh.

Did you have puts on WBA? I couldn't remember.

I'm still riding TGA/EGY.

[RobParks2M]

Did you have puts on WBA? I couldn't remember.

I'm still riding TGA/EGY.

I’ve had them on and off so missed this dump. Wasn’t sure how far they could drop below $15.

[Abzu]

who was buying WBA here not long ago... imagine not listening to me and buying PLTR instead

Rob and I had a big boy conversation about if not too long ago.

Nice list. I was actually looking at under armor the other day I hadn’t realized how far it had dropped lately.

Take WBA off your list though they are legitimately trash. Primary care is getting wrecked and they overpaid big time post Covid for their acquisition. To fund their missteps and mistakes they are selling their cash cow Cencora aka AmerisourceBergen. They used to own like 20%+ of their drug supplier but they’ve sold down to 12%. Kinda like NYCB selling good loans with solid rates to help baghold their bad loans with proper cash ratios.

As if that isn’t bad enough they are trying to dump their boots UK division for the 2nd time in 4 years so the smell of desperation is in the air and they’ll never get a decent offer.

Last they are still paying out top of the market rates to their pharmacists because they fired a bunch 2019 and blundered so hard with staffing during Covid. Plenty of them are still on their 2 year $50-75,000 bonus contracts even though Walgreens market share is down, competitors are better positioned, and no one wants to buy goods in the store that are marked up 50% higher than already high grocery store prices. I’d still short down to $10 minimum.

I mentioned WBA because it looks like it's going to bounce around ~$15 up to about ~$18.

I wouldn't be interested in starting a long term position until it goes to about ~$12 but I think it could go as low as $7.xx, on the high side I see ~$35, ~$45, ~$60.

It looks like you know a lot about the company but you are not mentioning the good things that are happening, I know it's mostly bad but it's good to balance your range. Seems like you don't think they are going bankrupt and the current book value for WBA is about ~$15. It's p/b is about as low as it has been in the last 15 years and has been about 4x higher.

What positives do you see on the horizon for WBA? They’ve gotten costs under better control on their primary care, they’ve got their opioid litigation complete, and they’ve got a lot of retail property they could sell? Their pharmacy benefits unit could be under pressure soon too with legislation that is in the works. I’m sure they will bounce as nothing ever goes straight down, but idk what that looks like I suppose.

As far as bonds I’m doing good buying TLT and I sold some $93C for mid June for around $1. I’m up like 4% on position and when the call expires worthless it’s another 1% so 5% so far(or 5.5% if I get exercised at 93) and I think I’ve held for maybe 2 months at this point not including the dividends. I should sell a CSP too since I’m about ready for another 100.

NHS PharmacyFirst, the dividend cut, the TCMP is saving more money than expected and they have exclusive rights to distribute oteseconazole.

I'm not really a bond guy, I can get better returns selling puts and for me, it's just as safe, when I sell I'm usually trying to avoid exercise.

I saw you selling puts on sofi I think and I thought you were doing that to generate cash on your position, not buy more sofi.



I was making 15-25% selling DJT puts for 1 week expiration, I didn't want the stock, bonds can't beat that.



I got ~10% selling puts on UVV last week, those expire 6/21 and it's still better than bonds.

Rob said he'd short it until at least $10, I said I'll buy it for long-term hold at $12, apparently nether one of us wants to follow up on that lol.

Rob is out of his short or put position.

I'm not buying WBA right now lol.

[stockbruh]

I would not hedge a CC or CSP for the same reason I would not buy calls or puts.

the vast majority of people lose on buying calls and puts.
it's much easier to make money on a CC

why do you sell CC? to make money
what is likely to happen if you buy a call? lose money

based on current option delta Dec 30C have a roughly 63% chance of being OTM by expiration
based on current option delta Dec 32C have a roughly 68% chance of being OTM by expiration

any option you buy, further out of the money, is less likely to be ITM by expiration than your CC

yes, you can make money on a call even if it is OTM. But given the expiration is so far away, there are other strategies to take before expiration
a) wait
b) buy to close
c) buy to close and sell to open a call with lower delta
d) buy to close and increase your knowledge before making another trade

you should not be selling CC at a strike that you a)can't manage or b)not comfortable in letting get called away
PLTR is currently trading around $24.10. That means including the premium, you would make 33% give or take if your shares get called away at $30.

you need to figure this sh!t out before you make a trade, otherwise you're just killin all your gains

Would you sell all your CC’s at the same strike and price or should you try to spread them out

[RobParks2M]

WBA tanking is likely to bode well for my long Kr position. Rite aid closing locations too so it’s likely WBA will stop buying locations/prescriptions from them and Kroger/Albertsons might step in for various locations. Walmart could always try too, but I don’t think they put a lot of effort into growing healthcare vs just opening more stores and getting Rx from foot traffic. I am glad WBA said Rx model is unsustainable because it is if you aren’t stealing profits with an integrated PBM. This is how they are forcing independent pharmacy to close.

Might shore up Oct calls with longer dated $50 calls as well.


Glad I backed the truck up on Fnma at $1.07 and FMCC at 0.98 last Friday. Already back up 20% lmao

[Abzu]

WBA tanking is likely to bode well for my long Kr position. Rite aid closing locations too so it’s likely WBA will stop buying locations/prescriptions from them and Kroger/Albertsons might step in for various locations. Walmart could always try too, but I don’t think they put a lot of effort into growing healthcare vs just opening more stores and getting Rx from foot traffic. I am glad WBA said Rx model is unsustainable because it is if you aren’t stealing profits with an integrated PBM. This is how they are forcing independent pharmacy to close.

Might shore up Oct calls with longer dated $50 calls as well.


Glad I backed the truck up on Fnma at $1.07 and FMCC at 0.98 last Friday. Already back up 20% lmao

Sound reasoning as far as the KR calls go, I think it's highly likely Oct should be enough time and I agree with you about getting the better strike at 50, my target remains 46-48.

The FNMA buy wasn't bad but I told you I wasn't ready to join you on this trade a while back because I expect it to go to ~.50c.

I'm willing to play WBA at 7.xx but I'll likely choose to do it through calls instead of shares.

[Abzu]

If FNMA can cross ~1.5 and hold it then you might be safe.

[RobParks2M]

Sound reasoning as far as the KR calls go, I think it's highly likely Oct should be enough time and I agree with you about getting the better strike at 50, my target remains 46-48.

The FNMA buy wasn't bad but I told you I wasn't ready to join you on this trade a while back because I expect it to go to ~.50c.

I'm willing to play WBA at 7.xx but I'll likely choose to do it through calls instead of shares.

Sadly fnma/Fmcc hinges hard on who is the next president. If it’s trump it’ll pop $3+ instantly maybe hit $5. If Biden wins you’ll probably be buying at 0.4-0.50 or so. The whole saga should end by 2028 when warrants expire which will hopefully be the primary mechanism for government profits. This whole debacle to me is a wild government overreach and only reason it hasn’t resolved is because there are 2 parties who played a major role in forcing conservatorship and they are pretending only congress can end it. At this rate, it isn’t a big deal as they both are continuing to retain capital so they can exit and they are ramping profitability and market share considerably which is great to see. When higher home sales happen when rates cut they should see even more profits as they securitize more and more loans. Freddie is starting to do 2nd home mortgages as well.

[usersignup2]

Would you sell all your CC’s at the same strike and price or should you try to spread them out

when I sell CC I choose the same strike if I have multiple contracts. I don't spread them out.

This is for two reasons.
1) easier to manage my position
simpler/less trading beats everything else. This is why buy and hold is hands down the best strategy for the average investor. simpler trades also means less stress. less stress means you can focus on your life which is why you are investing in the first place, a happy life.

2) I have strong conviction on my strikes
I spend on average 2 hours a day analyzing my positions. I do it because I enjoy it. I plot support and resistance, technical analysis, charting, etc.(but for the most part I disregard news). I take that information and along with option delta, I choose my strikes. Previously I would sell only weeklies but this year I've found the sweet spot to maximize gains is about 30-35 delta, 30-45 DTE and close at 50% profit. I avoid selling too close earnings. When expiration date approaches, I write my strategy for the upcoming period. These two changes I've made, longer dated contracts and writing notes and strategies has made a huge difference in my success rate and realized gains.

[kusok]

Why are puts on bito so expensive all of a sudden?

You can sell a cash secured put a week out and get over a hundred bucks which is completely insane, since normally it’s like $15, is somebody expecting a massive move down?

[stockbruh]

Why are puts on bito so expensive all of a sudden?

You can sell a cash secured put a week out and get over a hundred bucks which is completely insane, since normally it’s like $15, is somebody expecting a massive move down?

Yea it’s Abzu lol, but in all seriousness I’ve heard from a couple reliable traders Bitcoin is about to tank hard, some saying as low as 20k

[SipNPiz]

Why are puts on bito so expensive all of a sudden?

You can sell a cash secured put a week out and get over a hundred bucks which is completely insane, since normally it’s like $15, is somebody expecting a massive move down?

Maybe because Keith gill posted a photo of a dog on Twitter?

[kusok]

Yea it’s Abzu lol, but in all seriousness I’ve heard from a couple reliable traders Bitcoin is about to tank hard, some saying as low as 20k

Lmao

[usersignup2]

Why are puts on bito so expensive all of a sudden?

You can sell a cash secured put a week out and get over a hundred bucks which is completely insane, since normally it’s like $15, is somebody expecting a massive move down?

Anticipation of dip due to dividend payout

[stockbruh]

Don’t options adjust when a dividend is paid out?

[SipNPiz]

The N in Nike stands for nosedive RIP

[Destor]

Nike: Just Dump It

[usersignup2]

Don’t options adjust when a dividend is paid out?

Options adjust in the sense that puts will be higher than usual and calls will be cheaper than usual due to the anticipated drop in stock value after ex-div date

https://www.dividend.com/dividend-st...option-prices/

[kusok]

Anticipation of dip due to dividend payout

Oh lol, completely forgot about that one, haven’t invested in dividend stocks in a while.

[RobParks2M]

Wonder if I get a fannie pop tomorrow. I didn't watch but heard Biden was trash at the debate and there is 0 chance it helped his reelection campaign.

[kusok]

Wonder if I get a fannie pop tomorrow. I didn't watch but heard Biden was trash at the debate and there is 0 chance it helped his reelection campaign.

I wonder if DJT pops tomorrow. I have a tiny position, maybe 0.1% of portfolio, but option lottos can get interesting tomorrow morning. Would play with 1% of portfolio.

Inb4 max loss.