Red Lion

APO: Rolled the $ 59 APO put expiring today down to a $57 strike expiring September 9 for a $0.17 net credit. Net realized gain so far ($85.25) Unrealized gain $66.90 So far this position was in the black until today. I think it's going to take a couple months until we can really tell if this strategy is working as I collect more time decay on the short term options sales. SPY: rolled my expiring SPY $429 call down to $423 expiring on 8/22 for a $1.65 net credit Net realized gain (29.25) Net unrealized (120.8) So both sitting on losses at this point, I do think that most likely these should dissipate over time as I collect more premiums on the short weekly options. But we will see.

I'm no economist, but I think a significant market crash would clear the way for healthy productive growth going forward. We have Zombie corporations all over the world that will never be able to pay off their debt. We also have companies that are only viable because their cost of capital is incredibly low due to low to zero interest rates all over the world. Many millions of employees are stuck in dead end jobs around the world working for businesses that are surviving solely due to central bank market manipulation of interest rates. I think a major worldwide crash without manipulated interest rates would put most of those businesses into bankruptcy/receivership. Their best assets/employees will end up with stronger businesses. Lots of layoffs and a reset would probably ensue, but this would hopefully sow the seeds of new business startups, consolidation among more efficient businesses which produce higher ROIC, and bring down asset prices. All of these factors would likely set the stage for higher forward returns. These would all be positive things for productive young workers around the developed world, and probably negative for retired people, the developing world, and the less productive members of the workforce. I think central banks will be back to nominal 0 interest rates long before we have a complete reset, so all of this seems fairly unlikely.

Bought some September 2 $420 SPY PUTS and sold September 2 $410 SPY PUTS. If the SPY drops by about 5% by the end of the month this should go 7X, and obviously it's likely to end worthless. I don't know where the market is going, but I do feel like with Jackson Hole coming up, Powell is probably going to try to scare the markets.

Health insurance is a huge cost here. I'm at the point where I could probably retire with a 3% withdrawal rate if I didn't have to worry about health insurance. My wife and child are Canadian citizens, so this is something I've been thinking about quite a bit lately. With that said, I'm in my late 30s and still have some gas in the tank, and I'm not ready to throw in the towel yet. I'm trying to transition to a new stage where I start scaling down to find time for other business/investment endeavors. Another option in the US is to buy a bunch of rental properties where you can obtain positive cash flow but little to no taxable income, and then qualify for an Affordable Care Act subsidy by having low enough taxable income to qualify. As my wife and I are both professionals, even if we scale back, we're not going to able to pull something like that unless we both completely withdrew from our businesses/ the workforce

Made some trades already with the SPY options. Rolled my $428 PUT expiring today to a $424 PUT expiring on August 24 (one week) for a net credit of $0.16. Rolled the $431 CALL expiring today to a $429 CALL expiring in 2 days for a net credit of $1.

I definitely don't have an edge, at this point I'm just experimenting. As a novice, I would say the calendar spread strategy maximizes time decay (theta) in general. This is literally just a straddle calendar spread, so in theory, it should be able to profit in an up, down, or sideways market over a period of time as the time decay on the short term options is much higher than the LEAPS.

So I decided to add one more position to the experiment to try this with SPY. I started a $430 straddle expiring December 20, 2024 for a total outlay of $11,701.30 after commissions, $117.013 per contract. Sold a $428 PUT expiring tomorrow for proceeds of $93.35 after commissions and a $431 CALL also expiring tomorrow for $110.35. I think the index ETFs might be a great choice for this strategy for a few reasons. 1) Tons of liquidity, 2) no takeout risk as mentioned earlier in the thread, 3) even shorter expiration options for the "write" leg of the strategy. At this point I've committed a little under $15,000 to this experiment, so I think I will see how it goes over several months before increasing my exposure anymore.

I'm going to check Groupon, thanks for the recommendation, this is a great idea! I've already booked a few outings, although the snorkeling with the manta rays just got cancelled due to boat maintenance so I need to rebook a snorkeling trip. You can still get value, but you definitely have to shop it. I got a 2 bedroom oceanfront condo for $200 a night plus cleaning and service fees on AirBnb. We will have 4 adults and one toddler. For a longer trip, the condo is essential because restaurant prices are insane (and just getting worse from what I hear) and it saves a bunch of money to have a kitchen and hit up Costco (and go fishing which is something I try to do as early as possible in my trip, if successful it pays for itself and then some and it's always a great time on the water.) Then sitting through a timeshare presentation to get a special promotion on the stay in Kauai, so that only came to $150/night plus they give us a $200 gift card once we sit through the hard sales pitch and say no. They usually offer another package to do it again once you refuse, and I usually take them up on it as a cheap way to extend the stay by 5 days the following year. Most of the airline tickets booked on Hawaiian airlines points with bonus miles. If you open their CC and meet the promotional activity it is just about enough to cover 2 round trip tickets. Airline tickets and rental cars have both gone down quite a bit in the last two months. I got a midsize SUV for $90/day. If you're flying anywhere in Hawaii for a longer trip and staying in hotels and eating out for every meal, you're going to spend a fortune. And I don't have much interest in taking a short trip to Hawaii, I feel like 10 days is the minimum since the flights are significant (especially with a toddler!)

My $56 8/12 put expired worthless, so I sold a $59 put expiring 8/19 for $0.50. Currently we are sitting at $98.10 in profit on this strategy, will see how long this holds. I will continue to post whenever I make any trades.

Next week we are going to Kailua-Kona on the Big Island of Hawaii (my first time) for 10 days and then over to Koloa on the island of Kauai (we usually visit once a year).

I just put on a small hedge, collar on SPY, sold January 2023 $430 calls on SPY and bought $415 PUTS of the same expiration for the same price.

This makes sense. I'll probably roll my put this Friday, and take no action on the call I just sold for now.

I made my first trade today since putting on this position, I'm still learning here, so this may have been the wrong move. As I've mentioned in a previous post, I consider this experiment tuition, so hopefully by the time I learn a lot more about options strategies I can start allocating a larger percent of my net worth into these situations. APO (and the rest of the market) had a big move today, so my short $59 call expiring on Friday is underwater pretty significantly. I bought this call back for $1.58 ($158 since I'm only doing this position with 1 contract at a time) and sold the September 23 $62 CALL for $1.85 for a total credit of $25.70 after commissions. I realized a loss of $74.30 on buying back the $59 call, and the other positions are sitting at unrealized $79.90 in gains. So 4 trading days in and this strategy is pretty much flat in the face of a 5% move in the stock. I'm not sure if I should have tried to go for lower strike prices closer to the money, but I prefer the idea of rolling my strike price up. The downside, I won't be able to write another call for about 6 weeks unless I'm able to buyback the one I just wrote.

I have stock positions in the following. I also have an indirect position in PCG. APO BAM BAMR BRK.B BX CYDYF GOOGL KKR META PYPL

Added to GOOGL. This is a new position, and still very small for me. I just averaged down into a nice sized position in META starting around 250 down to $164 (avg. cost basis is $182.22), and would like to bring GOOGL up to the same size if the markets cooperate over the next few months. Having missed almost all of the tech gains since 08/09, I'm looking to buy into market leaders that earn good ROIC and can be valued on multiples of FCF rather than revenues. Right now this list just includes META/GOOGL, but I would definitely want to look at adding MSFT/AAPL/ORCL/ADBE if I can get a fair price. ORCL might be next, but we will have to see what the market does as I'm trying to add in a measured pace.

I like experimenting with real $$$. I think of it as tax deductible tuition with an attached lottery ticket. In this case, $2,653 is my maximum loss which would almost certainly be a short term loss. I certainly don't have down all the mechanics, as I've said I'm more of a novice or perhaps intermediate options trader (most experience is with selling puts, buying leaps or doing bull call spreads over the last 10 years) and I would like to start researching more complex options strategies, really put in the work to understand the greeks, and learn more about using software to evaluate trades. 1) So I put the trade on the day of earnings after they had been released, I wish I could say this was by design, but it just worked out that way when I started this topic 2) So the idea would be don't own the LEAP put at all? Just sell naked weekly puts, if I can't roll them over and I get assigned the stock, I would just sell the stock and sell another weekly put? I had actually considered this idea anyway since I hate spending $10 on downside protection I think will be worthless by options expiry (although I'm certainly wrong often enough). If I'm understanding you right on this I would be using margin to buy APO if puts got exercised, but I could basically just sell that right away and keep selling weekly puts ATM? 3) So collecting more premium by selling ATM instead of just barely OTM? This is where my lack of understanding the greeks comes to bite me. I've always had a very novice way to handle this where I look for the strike furthest OTM that will provide >1% return on the collateral for the put, this is probably holding my returns down in these strategies. 4) Now I understand why SPY would be ideal for this strategy. But stocks like META, GOOGL, MSFT, BRK.B, AAPL, and BX I would never see getting acquired, and they're probably a hell of a lot more liquid than APO options as well. Depending on how this first experiment goes I might delve into some of the above names or just SPY/QQQ.

So let's say there's a takeout offer for a big 30%+ premium. Presumably the LEAP put will lose more than the LEAP call gains because there would be a big move in the stock presumably accompanied with a reduction in volatility? It seems like the biggest risk would be for a big move right after putting on the position before being able to recoup the LEAP premiums by selling weeklies?

Just to play around with this idea I went ahead and bought a 1 LEAP call and put on APO, for an outlay of $2,650. My Call is ITM by $10 which I chose because I'm bullish on the stock. The put is just OTM. Sold slightly OTM put/call expiring next Friday for $160, and will start looking for opportunities to roll these. If I could do this every week it would take about 10 weeks to earn back the time value on my LEAPS (there's $1,000 of intrinsic value on the CALLS since I wanted to express this as slightly bullish on the underlying. Will be interesting to see how this plays out in reality, I think this would be much better on index ETFs, but I wanted to play with something small and my outlay is essentially $2,650 with $1,000 of intrinsic value on a call that I think should work out over time. I'll post some updates here as I play with the strategy. For the first round, I bought: 1/19/24 CALL $47.50 - $16.50 1/29/24 PUT $57.50 - $10.20 $2,672.65 (after commissions) Then Sold 8/12/22 CALL $59 - $85 8/12/22 PUT $56 - $75 $158.70 (after commissions)

Thank you! This is exactly the type of thing I was worried about, locking in losses by selling ATM puts/calls on a position that's already moved against you. I think maybe the theory is that if you keep selling ATM options, eventually the premiums would make up for any losses. I reread the article, and he is indicating holding the LEAPS to expiration and keep writing weeklies, so this seems like it really could set up a whipsaw with a big move in the stock.

https://seekingalpha.com/article/4356196-milking-cow-using-options-in-time-of-coronavirus?source=all_articles_title I just stumbled across this article on SA from a couple years back, and thought this was a really interesting strategy. I was curious if anyone has tried this, or something similar. My brief synopsis of the article, essentially he would advocate buying LEAP Call and LEAP put either ATM or OTM (depending on initial outlay vs. possible margin exposure). Then selling weekly calls and puts ATM, then rolling the options at least once week, he suggests after a big move to sell ATM options however far out you have to go to get a credit on the rollout. If assigned on an option, close that position out immediately and sell a new ATM weekly option. Concerns I have are that after a big move with a stock you might not be able to roll over the option to get a credit on the rollout. He seems to go through some math and examples about this, but I think I need to spend some more time digesting the strategy. Has anyone done this, or anything similar? I'm wondering if I misunderstand the strategy, and that the LEAPS and weekly options are BOTH being rolled out on a weekly basis to stay ATM. I think this is a similar concept to a calendar spread, which he does mention in the article. Overall, I found this to be quite interesting, and glad it's not stuck behind the paywall or I never would have found it.

Decided to pick up a quarter in front of a steam roller, and sold some $52 KKR puts expiring Friday for $0.60.

Starter/tracking position in GOOGL. T-bills maturing February 2023 for 2.9% YTM.

Presumably meta. I’m short $170 puts that expire today, still showing as short in my Schwab acct.

Added a bit to META. Have $170 PUTS expiring this Friday that I rolled over from last week's $175 PUTS, so acquiring quite a bit more this way.

Bought CUSIP 91282CCA7. Inflation adjusted treasury maturing April 15, 2026 with a 0.25% real YTM.