LachiusTZ
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Investing General Discussion
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Sanrith Descartes
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Its a great boomer dividend stock. Tons of debt but they have a solid dividend to free cash flow rate. I have it my Mom's account.
Sanrith Descartes
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Robinhooders buying the LAZR dip.
and... its green. God love 'em.
and... its red.
and... it finishes green 2%
What a ride.
and... its green. God love 'em.
and... its red.
and... it finishes green 2%
What a ride.
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Khane
Got something right about marriage
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PFE probably gonna dip today.
www.cnn.com
Allergy warning for Pfizer/BioNTech vaccine after UK health workers with allergy history suffer reaction | CNN
People with a "significant history of allergic reactions" should not be given the Pfizer/BioNTech coronavirus vaccine, UK health authorities said Wednesday, after two healthcare workers had symptoms after receiving a shot the day before.
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Ok so I go to "sell to open" one contract of broadcom for January, to try this covered call mess. I pick the 490 call, it gives me a weak range so I go beyond the range and pick near the last number i presume it sold at (see below). SO, IF it does not go past 490 I get to keep a measily ass 300 dollars???? And thats for tieing up 23k worth of stock??? And thats with me going way beyond the current ASK and plugging in 3 dollars a share. wtf am I doing wrong because they does not seem worth it at all.
Bid1.55
Mid1.75
Ask1.95
Bid1.55
Mid1.75
Ask1.95
| Max Gain | $300.00 |
| Max Loss | Unlimited |
| Break Even | AVGO at $493.00 |
Asshat wormie
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300 gain from 23k in 1 month is 12% annual return. How terrible!
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Sanrith Descartes
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Not all option plays are created equal. You need to analyze them all and look for the right value. Second everything you do should be based on risk/reward. The idea is to find the best reward for the risk involved.
So lets start with this. What did you pay for your AVGO?
Fogel
Mr. Poopybutthole
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AVGO is currently at 424, so a single call option is 42,400 worth of stock. There's two things you need to consider here
1. Do you really think it's going to go up 20% in a month? Seems a bit high, which tells me your call is way out of the money hence the lower premium
2. Even if the premium return isn't that great at the 490 strike, you still sell it at 490 when it's currently at 424, so you need to factor in the gain in the stock when combined with the premium to determine the options value
If I were you, I'd look at shorter term call options closer to the strike price if you want to get more bang for you buck with the premium, because if it didn't go to 490 by january, who cares about the premium at that point, that's a hell of a gain
LachiusTZ
Rogue Deathwalker Box
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This is the reality of it.
And if it lands, you make months * 1% + 20%
Why are you complaining?
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Sanrith Descartes
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Mathematically, the odds of AVGO hitting 490 on Jan 15th (the monthly) is 4.99%. You are making $3 a share for a 5% chance of losing. That isnt a bad risk/reward. If you want more reward you need to up the risk.
Sanrith Descartes
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Yeah I believe the expectation of what a covered call is needs examined. It is just a way to earn extra return on a stock you currently own. It isnt about homeruns but consistent extra alpha.
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Fogel
Mr. Poopybutthole
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They have earnings tomorrow, I wouldn't look at any options prices until then, unless you're confident the earnings will do well for them and factored that into why you went to 490 on your strike. I'd wait to see how earnings play out and then look at the options contracts for next week
Sanrith Descartes
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T
AT&T Enters Late Stage of DirecTV Auction, Fielding Offers Above $15 Billion -- Update
AT&T Inc. (T) received bids for its DirecTV unit valuing the satellite-TV service at more than $15 billion including debt, according to people familiar with the matter, as the widely watched auction winds toward a resolution.
Among those submitting bids above that level was Churchill Capital Corp. IV(CCIV), a blank-check company run by former banker Michael Klein, the people said. Apollo Global Management Inc.(APO), long seen by many as the front-runner to buy DirecTV, submitted a bid valuing the business at less than $15 billion, some of the people said.
The auction is in a late stage and should the company reach a deal with one of the suitors, it could be completed by early next year.
AT&T Enters Late Stage of DirecTV Auction, Fielding Offers Above $15 Billion -- Update
AT&T Inc. (T) received bids for its DirecTV unit valuing the satellite-TV service at more than $15 billion including debt, according to people familiar with the matter, as the widely watched auction winds toward a resolution.
Among those submitting bids above that level was Churchill Capital Corp. IV(CCIV), a blank-check company run by former banker Michael Klein, the people said. Apollo Global Management Inc.(APO), long seen by many as the front-runner to buy DirecTV, submitted a bid valuing the business at less than $15 billion, some of the people said.
The auction is in a late stage and should the company reach a deal with one of the suitors, it could be completed by early next year.
LachiusTZ
Rogue Deathwalker Box
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paid 413 a share last week or something. Ok I think I'm understanding a bit more, reason why I am going out to Jan is I cannot handle anymore short term cap gains for 2020. I just put in another order for a covered call for CIIC. Far less valuable holding and IF someone picks it up i'll get over 800 dollars in premium. Since I am going to hold rest of december I figured i'd start playing these jan covered calls at prices I guess I would not mind dumping them in jan.
I was just shocked at 300 dollars premium to hold that that much worth of stock for a month. (woops typed 23k worth of broadcom when its really like 41k)
300 dollars premium on 41k worth of stock seems like a pittance. Ok let me keep going through these, INTEL and tractor supply , your next..
I was just shocked at 300 dollars premium to hold that that much worth of stock for a month. (woops typed 23k worth of broadcom when its really like 41k)
300 dollars premium on 41k worth of stock seems like a pittance. Ok let me keep going through these, INTEL and tractor supply , your next..
Sanrith Descartes
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You have to understand this concept. That the premium on options is modified by the implied volatility. A very stable low beta stock like VZ, T, CSCO have very low implied volatility and this very low multipliers on their option premium. If you want big numbers you want high vol stocks which means much higher levels of risk. 99% of options is about math. If I recall you use Fidelity so use the Options strategy builder and it will price options and for you and run a 2-year backtest to give you estimates on being assigned.
edit: circling back, what was the factor that had you buy AVGO near the 52-week high? Are you anticipating it making a run up? If you are then selling covered calls isnt the normal strat since you are betting the stock isnt going to have appreciable stock movement up. Unless you expect it to spike and you are looking for the covered call as extra premium when it runs up to a pre-designated top for you to sell.
Why buy at this price?
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AVGO earnings real soon and I'm buying into my friends strategy that is super semi conductor heavy, he has been making a killing. But either way I MUST do some massive selling off in January, I'm carrying too much margin. So if my covered calls get triggered, fine I have to sell off anyways. If they don't, fine I got some premium then must sell off myself. Sound strategy?
Fogel
Mr. Poopybutthole
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So I did some research yesterday and decided to buy 100 shares each of IPV and BFT on top of the BTWN that
Sanrith Descartes
brought up. Some may say its RH or WSB like trading, but I liked what they were doing and if they repeat MP, LAZR, VLDR etc then set a trailing stop loss on the first spike and sit back. Hows the saying go, 500k frenchmen can't be wrong? Just don't be the one holding the bag at the end
Sanrith Descartes
brought up. Some may say its RH or WSB like trading, but I liked what they were doing and if they repeat MP, LAZR, VLDR etc then set a trailing stop loss on the first spike and sit back. Hows the saying go, 500k frenchmen can't be wrong? Just don't be the one holding the bag at the end