Castanza

Just spit balling here on my phone: There are 62,500 power plants in the world. Let’s assume they are all terrible red tag coal plants (max pollution) 725,000 tons each a year. Earths Atmospheric volume is 5140 trillion tons. Power plants produce 0.00000815% of the total atmospheric volume in pollution a year. Over 150 years that would be .0012 % of atmospheric volume. There are 3 trillion trees on the planet. Trees are estimated to absorb 13-48 pounds of CO2 a year. Let’s just take it less than average and say 25lbs of CO2 a year captured by a single tree. Soooo 75 trillion pounds or 37.5 billion tons of CO2 is sequestered by trees a year. Trees sequester 0.00000729% of the total atmospheric volume a year in CO2. So for shits and giggles let’s use the trees to offset the coal plants...0.00000089% of the earths total atmospheric volume in pollution a year. Over 150 years that would be 0.000129% of atmospheric volume. Yes, this ignores other forms of pollution, volume density of gases etc, but it also ignores other “anti pollution?” mechanisms. What all this means? No effing clue but that percentage makes it hard for me to believe we have any significant impact on anything. Could we get to 1% if we included every source of pollution? It’s like saying a natural gas burning pilot light would eventually heat a domed sports arena located in Antarctic. Again, I can’t answer for the impact of these percentages. Edit: apparently all automobile and industrial activities produce 24 billion tons of CO2 a year. So that would be 0.000004ish % of total atmospheric volume.

Seems we have similar fleeting experiences with Geology. The university I attended had an emphasis around paleontology which was pretty interesting, but not what I was after. I did get to participate in a dino dig out near in the bad lands Montana section and the Green River Formation in Wyoming. But yeah, I had zero desire to be a paleontologist. The other aspects of geology (resources, formations, stratigraphy, etc.) stuck with me. I backpack a lot and often get those book with info on local formations and strata.

It’s definitely a fringe theory regarding oil origins. But the book is an interesting read regardless. However it was recommended to me by a Geology prof who had 30 years of oil and gas industry experience. It would be interesting to see the experiments tried again today with modern drilling technology. Where do you practice geology? If you care to share.

There doesn't seem to be too many discussions on this forum regarding interests or professions other than investing. Not sure if there are any on here who study geology professionally or as a hobby but here are a few topics I follow loosely and find interesting. Deep Hot Biosphere is a book I read in college while studying Geology. It was always an interesting hypothesis to read about. It seems the fracking industry has sparked new interest in the topic but more from a human involvement perspective instead of naturally occurring. - https://www.pnas.org/content/114/27/6895 Similar topic but in regards to Natural Gas Facking and the introduction of microbes which are creating entire ecosystems in the biosphere. -

I did do some reading in Ardmore about a year ago and it seemed that their tankers were specifically equipped to ship low sulfur fuel which is going to become the standard fuel option for ships due to emission regulations. Again take this with a grain of salt as I quickly lost interest in the sector and didn’t do any type of deep dive. But it seemed that although their fleet was a bit older they were better positioned and sort of cornered the market on distributing this fuel.

Curious if you have looked at Ardmore Shipping ASC at all?

My bad. I mean I have had months doing 30% on capital with the put writing strategy. But that’s pretty much luck that I didn’t get assigned. Boilermakers strategy is much more conservative and you can generate 5-10% with confidence.

I was just using numbers based on the original post.

:P You could say the same about politicians. Unless that’s who you were referring too :P

Is it really picking up pennies when your making 30-40% ROC a year? Ask the traders from LTCM. They were heavily leveraged. 25:1 debt ratio....I’m selling otm cash covered puts on blue chip equities which I already own. Hardly an equal comparison.

Is it really picking up pennies when your making 30-40% ROC a year?

The writing of puts takes very little effort on blue chip stocks especially if you're not greedy about premiums and go decently out to 95%+ profitability range. I just don't see how this is anymore risky than owning the underlying stock. As Greg pointed out. Value investors are just as likely to hold BAC on the way to zero as someone who would write puts for premiums with the risk of potentially getting assigned. Now if you do this on say Beyond Meat yeah you're a moron. But doing this on SPY or other securities you would hold long-term, I don't see the risk. Maybe I'm missing something....the majority of you on here are much better investors than myself. How many of you would liquidate a portfolio of $SPY if it dropped 15% in a day? If this were to happen the person who got assigned shares now has the advantage vs the person who is holding. I could write covered calls and collect premiums while you have to hold until SPY climbs back to your dca before you could sell or write covered calls. Think about worst case scenario. Stocks gaps down due to bad earnings or after-market news. Let's say 20% on a $1,000,000 investment. You're out 200k if you owned the stock, but you can close the position and move on. If you sold the same notional in cash secured puts, you're going to have to pay more than 200k above your sale price to close the contract because now vol has exploded across the term structure and the puts you sold are now going to be at a premium (unless if they're WAY out of the money - and even then, massive bid/ask spreads). So your two choices are to accept a loss greater than 20% to close the position and stop the bleeding OR to be stuck with the position. It's NOT the same dynamic as owning the underlying stock. Say MSFT is at 140 and I sell strikes at 115 collecting premiums. If MSFT happens to gap down and I get assigned shares bi deal. I have more leverage with my shares than the guy who bought shares at 140 and is now holding the bag. If MSFT bottoms out there I can now sell covered calls and still profit off my cost basis or simply hold long term. But if you bought at 140 you’re going to be taking a loss until it’s back to your cost basis. I don’t see the risk. If MSFT drops 20% I’m buying anyways. I’m collecting premiums up front so really the only thing to keep this stars they going is to not get assigned (which isn’t bad) plus if I buy an OTM put at say 110 and structure the ratio of buy to sell 2:1 I’m only going to lose money on in the range 110-115. Anything below that is a profit and anything above 115 is a profit of premiums. These are just rough numbers.

For institutional trader yes. For PAs you can wait until expiration and take delivery or close out with limited vega and theta exposure. Well yes, that is what I characterized as being stuck in the position. The capital is tied up until expiry OR you lock in a loss greater than the common stock. If you're only selling 1 month puts, being locked up isn't a big deal, but your premiums are tiny, transaction costs eat most of it, and you can expect these things to move against you more frequently. If you sell them further out, much more opportunity to make greater premiums, less frequency of a negative outcome if held until maturity, but ALSO tying up capital when you're wrong OR taking greater losses than in the common. It's not the same thing as stock ownership and comes with its own set of psychological barriers/problems/biases to work through. I personally like options, but they're not easy and certainly not a substitute for outright stock exposure IMO. Again, I'm not denying the risk. But I think you're overstating it. MSFT has better premiums doing it weekly than it does monthly. Also avoiding earnings weeks can help reduce risk. Plus if you're really worried about a 20% drop you can offset premiums buy buying a few OTM puts. edit: And you could get whipsawed on that hedge put. So it doesn't completely negate risk.

The writing of puts takes very little effort on blue chip stocks especially if you're not greedy about premiums and go decently out to 95%+ profitability range. I just don't see how this is anymore risky than owning the underlying stock. As Greg pointed out. Value investors are just as likely to hold BAC on the way to zero as someone who would write puts for premiums with the risk of potentially getting assigned. Now if you do this on say Beyond Meat yeah you're a moron. But doing this on SPY or other securities you would hold long-term, I don't see the risk. Maybe I'm missing something....the majority of you on here are much better investors than myself. How many of you would liquidate a portfolio of $SPY if it dropped 15% in a day? If this were to happen the person who got assigned shares now has the advantage vs the person who is holding. I could write covered calls and collect premiums while you have to hold until SPY climbs back to your dca before you could sell or write covered calls.

I've been religiously writing ATM cash covered puts on this all year collecting premiums. I got assigned shares a few times. I also hedged a few times buying puts that offset premiums a bit but also gave some additional protection to the downside. Been averaging about 2-3% a month on the capital. Not quite as good as your strategy but if you're not looking to hold shares I don't think it's a bad strategy. You do miss the div though. Curious how many others on here sell covered calls or cash covered puts? In this environment it seems quite easy to do confidently. I saw Boilermaker has been doing something similar in an IRA I believe. Although I haven't been doing it strictly on BAC. I do it all the time with BRKB, WFC, BAC, and AMGN when AMGN 170-puts have sufficient premium. It's interesting to think about this at scale and why people choose to not do it. I mean if you had say 500k you could basically generate a 50-60k yearly income off this strategy with minimal risk. I mean even with say weekly SPY 280 puts (86% profit chance) you generate a $94 premium. Just say 25% for taxes so a 70.5 premium. You could do about 18 contracts a week and generate about 5k a month in income. Yeah you would get the shaft if the market tanked, but that would happen to your retirement accounts regardless. Why is this? Because the risk you're taking is many hundreds of thousands of dollars when it doesn't work out. You're selling insurance for a premium - it's great when the insurance doesn't have to pay, but a doozy when it does. As far as the strategy, I trade around my core positions ALL of the time. Take gains here, average down there, roll back. Also, I sell long-dated out-of-the money calls and tend to repurchase most of them on market dips 5-10% for 50-60% less, wait for the recovery, and rinse/repeat. All of these strategies take advantage of volatility - but they all suck-hard when they go wrong or you get whipsawed. The buying/selling the actual shares around a core position is probably the least risky, but also the least rewarding/leveraged. As LC said, works best when done on a portfolio of multiple securities you're already comfortable holding and low commission accounts. I get that but my point if if you're simply holding SPY and the market crashes you're going to be down a ton anyways. If you're holding cash and you get assigned shares selling puts what's the difference?

I've been religiously writing ATM cash covered puts on this all year collecting premiums. I got assigned shares a few times. I also hedged a few times buying puts that offset premiums a bit but also gave some additional protection to the downside. Been averaging about 2-3% a month on the capital. Not quite as good as your strategy but if you're not looking to hold shares I don't think it's a bad strategy. You do miss the div though. Curious how many others on here sell covered calls or cash covered puts? In this environment it seems quite easy to do confidently. I saw Boilermaker has been doing something similar in an IRA I believe. Although I haven't been doing it strictly on BAC. I do it all the time with BRKB, WFC, BAC, and AMGN when AMGN 170-puts have sufficient premium. It's interesting to think about this at scale and why people choose to not do it. I mean if you had say 500k you could basically generate a 50-60k yearly income off this strategy with minimal risk. I mean even with say weekly SPY 280 puts (86% profit chance) you generate a $94 premium. Just say 25% for taxes so a 70.5 premium. You could do about 18 contracts a week and generate about 5k a month in income. Yeah you would get the shaft if the market tanked, but that would happen to your retirement accounts regardless. Why is this?

Why wouldn't you just do this with cash covered puts? Weekly premium ATM is $1.89. If you get assigned then it's no different than your situation. Plus you can simply buy an OTM put as a hedge which offsets your premium a bit, but provides good downside protection. That's safer than placing a large amount of capital into a single company. Both strategies are capital intensive.

I've been religiously writing ATM cash covered puts on this all year collecting premiums. I got assigned shares a few times. I also hedged a few times buying puts that offset premiums a bit but also gave some additional protection to the downside. Been averaging about 2-3% a month on the capital. Not quite as good as your strategy but if you're not looking to hold shares I don't think it's a bad strategy. You do miss the div though. Curious how many others on here sell covered calls or cash covered puts? In this environment it seems quite easy to do confidently. I saw Boilermaker has been doing something similar in an IRA I believe. Although I haven't been doing it strictly on BAC.

Sold $MLR about a week ago at 33.5 a share. Couldn't pass up the 10% profit in a few weeks.

Writing $MO 10/11 39.5 puts

https://amp.businessinsider.com/wework-ceo-adam-neumann-layoffs-firing-tequila-shots-run-dmc-2019-9 Simply amazing

Sheetz gas station chain. - People love Sheetz food. - Tesla Charging stations. Not unique but their atmosphere and food are arguably best in class giving them some advantage over competition to entice people to charge there. - 530ish locations (Flying J has 650ish)

Sold my remaining $BREW Sept 20 $12.5 and $10 puts.

Are you buying puts with the VIX around 16?

When does personal responsibility come into play? I'm not disagreeing with your point, but I'm also not agreeing with it. My issue with much of the Democratic policies is they want to remove all personal responsibility, accountability and decision making from the process. We shouldn't have a nanny state, yet I agree there probably are some lending practices which are harmful (but shouldn't necessarily be illegal). On the radio the other day some workplace was offering to pay off student debt for signed employment contracts of a specific length of time. I'd imagine there are some shady practices in the fine print there. Is it not just as shady/predatory to make some "taxpayer" foot the bill for others poor decisions? Does that not also fall under predatory/shady lending practices? I didn't force you to take out a loan and I'm also not volunteering my money to pay for your loan. All you're left with is force which is simply predation on a faceless person aka the tax payer.