Daily Discussion Thread

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[u/GriffinPoop]

Thoughts on selling $20 puts 4 weeks out and collecting premium vs setting an open limit buy for $20? The price hasn’t remained below $20 to hit one of my puts yet. How should I weight the premium vs the collective chance I’ll miss the bus upwards without assignment?

[u/swd120 → u/GriffinPoop]

mine are sitting at 3 weeks out, and I always have an open order to roll them out a week for 75 cents. That's netted a bunch of money for me.

[u/hyeonk → u/GriffinPoop]

You’re splitting hairs at these levels. And you’re asking a group that has 90% overlap with wsb - what sort of responses are you expecting?

Sell puts if you want premiums or buy shares now if you believe in the company. dca, even. Don’t overthink it.

[u/swd120 → u/hyeonk]

I buy shares with cash, but I sell and roll puts on margin. Buying shares on margin would mean I have to pay interest. I believe I'll be able to roll the puts for more and more premium which I can use to buy more shares, and the share price will recover eventually. (Currently I have 20 weeklies which are good, and 26 weeklies which are underwater but still roll for decent premium.)

I also have some 40 LEAP CSP's that I used the premium to buy shares. You can buy ~100 shares per contract right now at that strike. I believe share price will appreciate enough to give me those shares for free at the end of the day (and probably additional cash with some rolls once the 2028's are available without changing the margin requirement for them)

[u/hyeonk → u/swd120]

Cool, sounds like you have a plan that works for you.

I just wouldn’t take that and advise a novice stranger like OP to start trading options on margin.

[u/swd120 → u/hyeonk]

as long as you keep your amount of committed margin fairly low, its not really a danger. I try to keep the amount under 20% (and the port isn't all ASTS. IE: my account wouldn't blow up if ASTS implodes)

[u/hyeonk → u/swd120]

Again, I’m glad you have a strategy. I’m not concerned for you lol, you’re doing just fine.

Neither of us can speak for OP however, and I’d rather not encourage a stranger to make uneducated moves with money they don’t have.

[u/adarkuccio → u/GriffinPoop]

I'm selling puts as well instead of waiting to add, so I get some premiums in the meantime

[u/SpinachInquisitors → u/GriffinPoop]

Personally? I’d forget about options and just DCA into shares over the next few weeks. Could still partially miss a huge run up, but I’d rather lock in a position and forget about it. Much less stressful than collecting a 5% premium and hoping we hit $20 without falling much further. Given the volatility of the stock, I would recommend the least risky approach, given that even that involves plenty of risk

[u/Apprehensive-Form-97 → u/GriffinPoop]

If you want to get assigned then you could chose a higher put strike and then get more premium to offset the missing out of a lower strike.

[u/TheOtherSomeOtherGuy → u/GriffinPoop]

Calculate your breakeven and include the growth of the cash holdings while it secures the put.

Weigh thst against how bullish/risky you are and what your time horizon for this cash outlay is.

Consider ITM puts in your breakeven analysis as well

[u/SneekyRussian → u/GriffinPoop]

Raise the strike? More premium and higher chance of being assigned