Investing General Discussion

Mist

REEEEeyore
<Gold Donor>
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Since rates have done nothing but move up how underwater are you on the bonds?
like 2-3k. it's no different from adding to any other position when it's down, except this one is still guaranteed to pay out something in the worst case

edit: feel free to punch holes in that logic
 

Jysin

Ahn'Qiraj Raider
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Mist Mist

This is “heavy” for me in TLT. (6% of this account)
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Il_Duce Lightning Lord Rule

Lightning Fast
<Charitable Administrator>
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like 2-3k. it's no different from adding to any other position when it's down, except this one is still guaranteed to pay out something in the worst case

edit: feel free to punch holes in that logic
"Why make thousands when I could make.... hundreds?"
-Dr. REEEeyore

dr-evil-evil-laugh.gif.24a0cad612bbb50ee2b150a779a58f31.gif
 
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Sanrith Descartes

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I took a look at the secondary market for longer dated maturity treasuries and about the best yield with a coupon available is about 4.63 with a good coupon payment (4.65). Matures in 2044.
 

Blazin

Creative Title
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like 2-3k. it's no different from adding to any other position when it's down, except this one is still guaranteed to pay out something in the worst case

edit: feel free to punch holes in that logic
I would say what duration? Buying an ETF or actual bonds.
 

Blazin

Creative Title
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actual bonds, with the intent to sell when rates plummet, but totally okay with holding longer durations at these rates if they don't.
What duration? The risk with bonds is that we often don't imagine a future that is different than now, so when we are happy to get 4%, we aren't imagining a world of 8% You're happy with the rate NOW the risk is being very unhappy with it in the future OR needing the money and being forced to realize a capital loss.

My point being is to avoid the thinking "there is no downside, I'm happy to hold them" because we should never take risk blindly believing things that simply aren't true (Not saying you are)
 
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Blazin

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Blazin's Covered Call Newsletter
10.29.24

At the October expiration LOW's $270 calls where $12 in the money, OOF what a disaster. So what did we do? We rolled them out a month and sold the $270 strike 11/15 call for $14.81 and paid off the Oct call for $12.06 a net credit of $2.75. Roll forward a week and a half and those calls are now at $3.35 and are looking strong to expire worthless.

Same story for AMZN a month or two prior when it zoomed past a strike. This process of managing your way out of calls that expire in the money is crucial to the strategy working, especially when in a taxable account as these are. It's hard to predict surges, but surges don't last and when selling options time is on your side. time=premium.

So don't just let those shares go.

Call WATCH!
GOOGL $185 strike
AMZN $210 Strike
AAPL $245 Strike
TSLA $285 Strike

All 11/15 exp
 
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