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

[Destor]

Seems entirely possible the Fed won’t cut at all this year if the data continue like this, and it really doesn’t seem like they need to nor will they want to blow their load before anything bad even happens. If they cut and then bad things start happening, they’ll have less easing ammo.

Even if they do cut a percent or two, that doesn’t mean treasury yields will come down at the same rate. But monetary conditions are already super loose, which is probably what has been feeding speculation particularly in stuff like crypto.

My portfolio is $20k higher today than it was when I started gradually dumping $50k lol

[RobParks2M]

Seems entirely possible the Fed won’t cut at all this year if the data continue like this, and it really doesn’t seem like they need to nor will they want to blow their load before anything bad even happens. If they cut and then bad things start happening, they’ll have less easing ammo.

Even if they do cut a percent or two, that doesn’t mean treasury yields will come down at the same rate. But monetary conditions are already super loose, which is probably what has been feeding speculation particularly in stuff like crypto.

My portfolio is $20k higher today than it was when I started gradually dumping $50k lol

We are at ATHs and inflation is going back up. They might have to hike once or twice more to hammer home the message. I haven’t looked lately but I’d be curious to see debt to savings ratio to see how consumers are doing. I’d guess not well but enough people have money to spare that it’s holding up equity/crypto market.

I will say the toy/truck market is finally back to reality. I’ve acquired a lot of fun stuff lately at far better prices than last year.

[Carbonfibre]

If the market moons next week post FOMC

read what I said above again.


Jerome has had the chance to tell this market to chill many times.


What has it done every fomc?

squeezed like mofo.

just saying.





fyi next week is the chance where market should go back to SP 4900-5000.

if you see move to upside....yeah guess what matters more.

growth >>>> inflation.




remember these are the same idiots that said inflation was transitory.

now they saying inflation is over.

[usersignup2]

Sounds bearish. I'm a bit skeptical about taking assignments on my positions this week. I could see them changing course and SPY correcting bigtime.

Just roll them down and out. What's the difference if you get assigned this week at $XX vs. getting assigned next week at the same price or less?

[TugOfPeace]

Just roll them down and out. What's the difference if you get assigned this week at $XX vs. getting assigned next week at the same price or less?

It's confusing to me since I never roll. One of my positions:

UPST $25P CSP expiry this week, $43 premium received, current option value is $191
If I roll to next week expiry at $25P I'd come out with $31 profit.. if the option expires worthless, meaning price ends up above $25. What happens if price ends up at $22 though? Wouldn't I risk assignment again and have to roll once more?

It seems like I am taking Ls over and over until I get a week where the option expires worthless.

Let's say it happens 3 weeks in a row.

Week 1: $148 loss ($25 strike, stock ends at $23)
Week 2: $100 loss ($25 strike, stock ends at $23.5)
Week 3: $125 loss ($25 strike, stock ends at $23.25)
Week 4: $150 profit ($25 strike, stock ends at $26)

Right?

Edit: I also think I made a mistake not rolling when it broke the strike price. My original plan was to just take assignment and sell calls but I didn't expect this much downside in a single day, the premium from selling calls isn't as high as I had hoped now.

[RobParks2M]

If the market moons next week post FOMC

read what I said above again.


Jerome has had the chance to tell this market to chill many times.


What has it done every fomc?

squeezed like mofo.

just saying.





fyi next week is the chance where market should go back to SP 4900-5000.

if you see move to upside....yeah guess what matters more.

growth >>>> inflation.




remember these are the same idiots that said inflation was transitory.
now they saying inflation is over.

THIS TIME ITS DIFFERENT!

Lmao but for real I think he's gonna talk tough this time. He's fukkin in the thick of it and politics are gonna get HEATED this summer in terms of how the fed plays this. He really isn't going to want to hike rates so I think he threatens it and says no hikes this year and hopes to god he doesn't have to hike and he can cut at least once at the end of the year. This change in expectation is going to be brutal for regional banks. NYCB already sold another 900M in loans that aren't CRE which implies their CRE exposure is getting bigger and bigger in terms of overall loan mix. I'm keen to see what their deposits look like next time they are posted. I honestly feel like they are in big trouble still to the point where 1 or 2 billion in cash generated may or may not be enough. Selling good loans to cover bad doesn't seem like good business and the snakes they've given control of the company to are only looking out for themselves.

TLT still waiting to see it sub $90 before I buy again.


EGY popped to $5.60 and I sold 1/3 of my holdings, covered 1/3 with $5 CC at $0.80, and left the other 1/3. I really thought about either selling the final 1/3 of my position but decided I should leave myself some upside. Still glad I sold as selling covered my margin position from FNMAG purchases I made a little while ago. I'll hold the cash and perhaps hold the funds to buy the $5 CSP I sold on PAYO. No clue why they are dropping when they benefit directly from higher rates so I'll keep buying shares as long as they are as well.

Does anyone understand what tf Sofi is doing??


EDIT: I almost forgot NYCB dropped their 10k today. They've got 56% of their loan book tied up in CRE + multifamily housing in New York where rent control prevent landlord from raising rents. Big yikes. $37B in multi family housing and another 10B in commerical for good measure fukking LOL

[TugOfPeace]

Does anyone understand what tf Sofi is doing??

If my ZIM CSPs don't get assigned tomorrow I'm moving onto SOFI CSPs, this price is joocy

[usersignup2]

If my ZIM CSPs don't get assigned tomorrow I'm moving onto SOFI CSPs, this price is joocy

I talked about this in the options thread. It looks juicy because you are chasing premium while disregarding delta. Sure way to get fukced.

[usersignup2]

It's confusing to me since I never roll. One of my positions:

UPST $25P CSP expiry this week, $43 premium received, current option value is $191
If I roll to next week expiry at $25P I'd come out with $31 profit.. if the option expires worthless, meaning price ends up above $25. What happens if price ends up at $22 though? Wouldn't I risk assignment again and have to roll once more?

It seems like I am taking Ls over and over until I get a week where the option expires worthless.

Let's say it happens 3 weeks in a row.

Week 1: $148 loss ($25 strike, stock ends at $23)
Week 2: $100 loss ($25 strike, stock ends at $23.5)
Week 3: $125 loss ($25 strike, stock ends at $23.25)
Week 4: $150 profit ($25 strike, stock ends at $26)

Right?

Edit: I also think I made a mistake not rolling when it broke the strike price. My original plan was to just take assignment and sell calls but I didn't expect this much downside in a single day, the premium from selling calls isn't as high as I had hoped now.

Again, as I mentioned in the options thread, you need an exit plan before you enter a trade.

To answer your question you need to ask, "what will I do if I am assigned?"

Do you have the ability to trade your way out of it or will you just hold until you break even. If the latter, then what is the difference by rolling out?

Your scenarios are incorrect. You incur a loss if you roll for less premium and/or you close the trade completely.

If at the end of the week, assuming you would just baghold until break if assigned, you could just continue to roll at 25 strike. However, you are not incurring additional losses unless as stated above.

Also realize that many stocks move in steps, rather than straight line. Therefore it's very possible that 3-4 weeks from now it will be trading at the same price. Again you need an understanding of trend, support and resistance to make that determination.

[kusok]

If my ZIM CSPs don't get assigned tomorrow I'm moving onto SOFI CSPs, this price is joocy

Sofi premiums are actually pretty low.

I also don’t like either stock you mentioned as investments to begin with, upstart are pocket liners, be careful! Pick stocks you are willing to hold for 10 years or forever. Only quality companies. Upst is not one such company. Pltr comes to mind if you’re looking for similar priced stock. Tesla of course if you can spend more. Fang stocks. Clsk! Great stock and high premiums. But you must know that technically speaking, old-school professionals seek steady Boring stocks for option selling since they don’t move in price much… in the past, I made some money in upstart, but when you get it above $10 it’s getting suspicious…

Also, Roll your puts out and down. You can also hold some cash so that if you get assigned or are down and need to average down to reduce your cost basis, you would have that option. And be careful not to hunt premium too much. Remember: option selling is built on top of buy and hold investing. Not instead of. Top Wall Street firms sell calls (and puts) with 0.15 delta 30-45 days out which is statistically best way to not get assigned while still collecting some premiums. You can act more aggressively selling options at .3 delta and/or weeklies, or even atm if stock is overbought, BUT you will have to roll and be willing to take assignment.

Another option selling strategy is to choose the strike price based on support and resistance. To reduce your chances of getting assigned. One pro options seller even teaches to not roll puts since he WANTS to get assigned. He is willing to hold long term if there is a large drop. Warren buffet sold puts on geico for a long time, he wanted it, but at his preferred discount price. He eventually took assignment after a stock crash.
Basically there is nuance and detail to this.

[TugOfPeace]

Again, as I mentioned in the options thread, you need an exit plan before you enter a trade.

To answer your question you need to ask, "what will I do if I am assigned?"

My plan with UPST was to take assignment and sell calls. I average down a fair bit with assignment so it's ok. I just didn't expect this big a drop, so now I'm reconsidering.

Do you have the ability to trade your way out of it or will you just hold until you break even. If the latter, then what is the difference by rolling out?

Your scenarios are incorrect. You incur a loss if you roll for less premium and/or you close the trade completely.

If at the end of the week, assuming you would just baghold until break if assigned, you could just continue to roll at 25 strike. However, you are not incurring additional losses unless as stated above.

So let me use just so one week as an example (these values below are accurate from options profit calculator):

This week lets say I STO for $42 and BTC for $191, stock settles at $23, I am incurring a $148 loss.

At close, I roll this into next week at the same strike ($25) for $222 premium, and it expires worthless, so then I have a net gain of $74.

But what happens if the option does not expire worthless - let's say at the end of the week the option is ITM (underlying is $22) and I incur a $78 loss. My first loss is $148, my second loss is $78 so now I have to roll a second time for a credit of $226.

I think I get it - by staying at the same strike when rolling, because my strike is well above underlying price, my premium will be high, so even if the option ends at a loss the next week I can just keep doing that until I get a net positive credit?

[TugOfPeace]

I talked about this in the options thread. It looks juicy because you are chasing premium while disregarding delta. Sure way to get fukced.

I am looking at delta, stock hasnt broken $7 since Q3 or so last year

[Abzu]

When Jerome said inflation is transitory, he was more concerned with growth and making Biden look good then he was concerned with inflation, not raising rates immediately in 2021 is what allowed inflation to run in the first place.

When Jerome started raising rates, he was more concerned with inflation than with growth, he then proceeded to raise rates in .75 blocks.

What Jerome is doing now makes absolutely no sense since DEC, he went from 2 cuts to 3 but inflation remained and remains steady.

Jerome is not currently placing growth over inflation, growth was 3.3% and over 5% on the last 2 prints, growth is not a problem.

Jerome will be placing growth over inflation when growth flags, inflation remains above 2% and then he cuts anyway.

At that point he will be cutting when he doesn't want to, which should drop confidence in the dollar, a lot.



When you have China come back online our inflation will collapse but so will our growth as America will once again have an active competitor, one of the main reasons America appears so strong is because China is trying to appear weak and investment has been flowing into America as a result.

America is in for deflation long term, China is going through deflation right now and what happens in China usually happens in America.

The real problems arise when the fed has exhausted all stimulatory tools while our inflation remains well below 2%.



Long run China overtakes America economically but shares world control.

[Destor]

We are at ATHs and inflation is going back up. They might have to hike once or twice more to hammer home the message. I haven’t looked lately but I’d be curious to see debt to savings ratio to see how consumers are doing. I’d guess not well but enough people have money to spare that it’s holding up equity/crypto market.

I will say the toy/truck market is finally back to reality. I’ve acquired a lot of fun stuff lately at far better prices than last year.

The market is currently so far from pricing in more hikes lol, that would probably not go well

NVDA options as the biggest casino in the history of casinos? Sounds about right

[Carbonfibre]

did she start tracking markets yesterday or something?


Tesla options casino was x100 worse than NVDA that whole thing was built on fraud.

You know the analysts that were shoveling crap like tesla will scale from 1 million cars per year to 5 million than robotaxis than full level 5 self driving.

Tesla used to trade on 2027 metrics during 2021-2022.



Meanwhile.


Nvda fundamentals have the data to back up these claims.


Until every company is packed to the moon on NVDA AI gpu's that trade is not going anywhere.

[TugOfPeace]

I tried to close my ZIM CSP at expiry expecting it to drop to like $.01-$.03 given that the premium was $.17, and the underlying at expiration was $9.48 with a $9.50 strike, and the damn liquidity went nuts and made the BTC price at expiry $.35

Such bullchit

This is like that time I had a CC on DOCS and the stock closed aftermarket at a penny over strike price but come Monday those fukkers didn't exercise and the stock dropped significantly that morning

Should be illegal

[Abzu]

I tried to close my ZIM CSP at expiry expecting it to drop to like $.01-$.03 given that the premium was $.17, and the underlying at expiration was $9.48 with a $9.50 strike, and the damn liquidity went nuts and made the BTC price at expiry $.35

Such bullchit

This is like that time I had a CC on DOCS and the stock closed aftermarket at a penny over strike price but come Monday those fukkers didn't exercise and the stock dropped significantly that morning

Should be illegal

Sry but that sht legit made me lol, whooo, thanks for that lol.

If you ask me for help I'll give it to you.

You have to ask though.

[RobParks2M]

I tried to close my ZIM CSP at expiry expecting it to drop to like $.01-$.03 given that the premium was $.17, and the underlying at expiration was $9.48 with a $9.50 strike, and the damn liquidity went nuts and made the BTC price at expiry $.35

Such bullchit

This is like that time I had a CC on DOCS and the stock closed aftermarket at a penny over strike price but come Monday those fukkers didn't exercise and the stock dropped significantly that morning

Should be illegal

Lol sorry but you paid the idiot tax for waiting till the last second. They’ll always get you for a premium the last day on a low liquidity option and they’ll really get you the last hour.

I read something that said there was more $$ in options trading than actual shares being traded. Seems silly but lots of people trying to get rich quick and likely just giving money away. I’ve been more keen to sell options than buy for the most part.

[TugOfPeace]

Lol sorry but you paid the idiot tax for waiting till the last second. They’ll always get you for a premium the last day on a low liquidity option and they’ll really get you the last hour.

I read something that said there was more $$ in options trading than actual shares being traded. Seems silly but lots of people trying to get rich quick and likely just giving money away. I’ve been more keen to sell options than buy for the most part.

I get what you mean. I usually close much sooner because the option price decays normally near expiration due to higher liquidity, but with this one it was still trading at .06 or so an hour before expiry, and it was not even ITM. I figured maybe theta decay would really ramp up the last hour but then it surprised me going to .35.

Not a big deal, think it closed at $9.47 so I will just sell next week. Heck, maybe if I'm lucky the contracts don't even get exercised, or the stock closes >= $9.50 after hours.

Now that I think about it, for something with such low liquidity is there likely even a person on the other side of the trade that wants to exercise for a $.03 profit?

[RobParks2M]

I get what you mean. I usually close much sooner because the option price decays normally near expiration due to higher liquidity, but with this one it was still trading at .06 or so an hour before expiry, and it was not even ITM. I figured maybe theta decay would really ramp up the last hour but then it surprised me going to .35.

Not a big deal, think it closed at $9.47 so I will just sell next week. Heck, maybe if I'm lucky the contracts don't even get exercised, or the stock closes >= $9.50 after hours.

Now that I think about it, for something with such low liquidity is there likely even a person on the other side of the trade that wants to exercise for a $.03 profit?

Odds are good no one would be on the other side and they just disappear lmao

Edit: What's poppin' Friday night investment gang. I just put the kids down. Sippin some whiskey and looked through the NYCB 10-k while waiting for the boys to hop on to play a few games I saw an interesting note--- that of their $18B rent-regulated multi-family housing portfolio 40% are in their interest only period.

[Carbonfibre]

First rule of options is never ever trade stuff that is not liquid.

The only guy on the other side is gonna be bank / market maker which will always force the worst spread fills.



Also I am blown away at hanging on to things from 2021 -2022 pump and dumps.

ZIM/UPST are pure garbage and at no point will that garbage ever trade at those levels again.

[RobParks2M]

First rule of options is never ever trade stuff that is not liquid.

The only guy on the other side is gonna be bank / market maker which will always force the worst spread fills.



Also I am blown away at hanging on to things from 2021 -2022 pump and dumps.

ZIM/UPST are pure garbage and at no point will that garbage ever trade at those levels again.

There is a lot of crap that is down 90%+. TDOC, Peloton, Lucid, Rivn, and way way more names. What is even crazier to me is that even though all these companies shyt out billions and billions of market cap SOMEHOW market is still going up. But I guess when NVDA can jump 300M in market cap daily it'll take care of many things.

[TugOfPeace]

First rule of options is never ever trade stuff that is not liquid.

The only guy on the other side is gonna be bank / market maker which will always force the worst spread fills.

Also I am blown away at hanging on to things from 2021 -2022 pump and dumps.

ZIM/UPST are pure garbage and at no point will that garbage ever trade at those levels again.

I have no choice really. ZIM & UPST are my two largest bags.

UPST always seems to get hate but it went from $13 to $75 or so last year. That's a higher gain than what NVDA recently did. Once rate cuts are announced and there's a single good earnings report or higher guidance, the short interest is so ridiculous that it's bound to rocket back up.

As for ZIM - yea they cut their dividend, but shipping rates have gone up due to the conflict over in Israel. Once they report on Q1 this year (where rates have gone up), if they have any profit they will reissue a dividend. Their dividend policy remains unchanged.

I agree on the nonliquid part tho. I just try to stick to stocks I'm already holding so that if I'm assigned I just end up averaging down. Feel like if I bought into anything else when SPY is this high I'm just going to create new bags.

[kusok]

I tried to close my ZIM CSP at expiry expecting it to drop to like $.01-$.03 given that the premium was $.17, and the underlying at expiration was $9.48 with a $9.50 strike, and the damn liquidity went nuts and made the BTC price at expiry $.35

Such bullchit

This is like that time I had a CC on DOCS and the stock closed aftermarket at a penny over strike price but come Monday those fukkers didn't exercise and the stock dropped significantly that morning

Should be illegal

None if that matters. You should only sell options on stocks you want to own. Many sellers never even roll puts, they want to get assigned. You can try to buy a put back after you captured 90% of the money, but if it doesn’t work, so what.. let it go.

I had the weirdest things happen to my puts and calls, nobody cares, the plan is made before you sell the option. I had situation where I was assigned out of the blue long before expiration, I also had a very very far out of the money call stay at very high price until the last split second and never went down in price (on amazon of all things), it’s all over the place, but that should make no difference.

What does matter is making sure stocks like ZIM and upst never take more than 10% of your holdings, and probably better not more than 1%
Currently if you said you are 50% bitcoin and solana, and the other 50% you’re buying the tesla dip or just holding sp500 if you sell calls on that, ok.

[kusok]

Feel like if I bought into anything else when SPY is this high I'm just going to create new bags.

Google is currently at fair value. Tesla is an easy dip buy here. Bitcoin is going to double and mostly likely triple from here in the next several months/weeks. Solana too. Amazon is never a bad idea, should be double in the next couple of years. PLTR is an easy buy here too. ENPH having a nice dip right now.

[ikytdsutwvc]

Enphase is like the Amazon of the solar industry right?, #1

[kusok]

Enphase is like the Amazon of the solar industry right?, #1

ENPH is a leader, BUT that space is not like online retail and ENPH is not like Amazon. Amazon does more stuff, and solar is currently under attack as governments are taking away some of the help they gave solar industry in the past. ENPH also has competition, Amazon does not.

So.. your allocation should reflect this. Amazon is a kind of stock you can have 10% of your portfolio in. But not ENPH. That type of stock can be 1% of your portfolio.

[RobParks2M]

Enphase is like the Amazon of the solar industry right?, #1

They are exactly like Amazon if they are diverse and have 10+ different industry’s they are involved in. Otherwise no they absolutely are not.

[Visel]

Anyone else sitting with anticipation for NVDA calls? GTC and FOMC will make this a fairly chaotic week.

[Bingo559]

inverse head and shoulders on BROS coffee?