Red Lion

I'm certainly no expert, but in previous years I've often found bargains in the tax loss selling bin around the week of Christmas-New Years, there seems to be a combination of low volume and tax loss selling that can cause an extra steep selloff right before year end. Who knows in 2021 though, the markets are crazy.

I'm not barking up any tree, and I'm not saying this is bitcoin's fault. I'm just identifying what I think is a huge potential risk. I'm quite libertarian politically, but I recognize that I'm in the minority. I think regulation likely wouldn't ban BTC outright, but would probably be similar to maintaining foreign bank accounts with regulatory and disclosure burdens and stiff penalties if found in violation of the disclosure burdens. I think this could take away the speculative allure for a lot of current market volume. This is just a hunch, I'm not betting against BTC or anything.

I don't think there is good data on this. I pointed out the use of BTC transactions as a political risk, and I still think it is. As you mention, using actual cash or gold is commonplace for criminals, but please explain to me how you can use physical cash or gold to facilitate electronic transactions? I readily agree that USD is probably used for the most illicit transactions, but BTC market share has been skyrocketing since inception. Even during the Silk Road era, BTC transactions were extremely common, and this was 10 years ago. So my point was that: 1) BTC has been used exponentially MORE for illicit transactions since Silk Road; and 2) the early movers that were mailing oxycontin through the mail for BTC are now multi-millionaires if they held their BTC; and 3) with more mainstream awareness I think governments around the world might try to crack down, it's already happening in China.

Well I'm paying my tuition on the ATVI puts. Bought them back at $1.90 and sold the 11/26 $61.50 strike price for $1.15. If this new option expires worthless I'm still out $0.35, but I guess I can make that back by writing the next week's option. If I get assigned then my cost basis is $61.85 after adjusting for the options trades, so at least my margin of safety on the stock is improving.

Sure the USD is used more frequently for street level transactions. Certainly NOT for dark web transactions.

I couldn't agree more. Again, I think it's going to be difficult to regulate or track transactions in BTC, but I suspect there will be significant effort by governments to try. It does seem like if the speculation is contained and the "bubble bursts" that BTC would become much less attractive as a means of facilitating the black market, especially if the volume from speculation dries up and the value of the BTC holdings plummets. And it's hard for me to see how these levers don't eventually end up getting pulled. The crazy thing about this run up in crypto is that there's an entire group of low level criminals that are likely millionaires with essentially untraceable and untaxed wealth, and likely many many billionaires as well. I would be surprised if there are not currently drug cartels, terrorist organizations, and organized crime with billions upon billions of BTC at these current prices, and this becomes a serious problem for governments around the world. I suspect that causing millions of millenial speculators and some hedge funds devastating losses would be an acceptable collateral damage for many government actors. I still find BTC very unattractive for this reason along with the above mentioned lack of intrinsic value. Maybe I'm wrong, and no one is able to put this genie back in the bottle, maybe the price continues to soar, so I sure wouldn't short BTC even if I knew how.

I don't purport to know much about BTC intrinsic value, but one of the huge utility's of BTC, is its use in facilitating black market transactions whether it be drug dealing, human trafficking, terrorism, tax fraud, etc. This part of BTC's "user base" seems to me to poise huge risks since it gives governments around the world a strong incentive to try to regulate or track cryptocurrency in general. I don't know enough to express an opinion about the feasibility government regulation or tracking these transactions. There's obviously a great deal of financial speculation involved today, probably a much higher % than black market transactions, I'm not sure how you could even estimate the break down due to the decentralized nature of BTC and other cryptocurrency transactions. I first heard about Bitcoin when it had just crossed over $1,000, and felt that it was speculative and had already had all its easy gains and passed at that time. Clearly the wrong decision in retrospect, but I have essentially continued to feel the same way the whole way up.

I will be watching how this unfolds tomorrow. You can buy them back until the expiration day, or I'm assuming if they move ITM they might get assigned sooner than that?

Added to MO, initiated a position in BRK.B (I know, sacrilegious that I didn't own this until now), short 11/19 63.50 ATVI PUT (to experiment with picking up pennies in front of steam rollers).

I just sold a $63.50 November 17 option on ATVI for $0.40 which expires in 2 days. Just putting my toes in at this point, and selling these on margin, because there's still some sort of holdup on getting covered calls/cash secured puts approved in my 401k account. If all my outstanding puts were assigned, my Schwab margin account would be about 30% on margin which would definitely be out of my comfort range, however I've got a significant amount of securities that I can transfer over to my Schwab account from a Chase You invest account (I just keep this because it's easy to transfer money from my my chase accounts on the same day, and have used it to make spur of the moment purchase decisions on many occasions, then eventually transfer securities over to Schwab if needed for margin purposes).

A bit more APO around $75.

Are you writing all of these on a cash secured basis? I'm looking at opportunities in APO, FISV, FB, MO, and ATVI. Other than APO, I'm looking to add a lot more of these common stocks over the next year or two, so they seem like good opportunities.

Thank you all for some great input. For the particular stock I posted about, I have added a fair amount of actual stock that I plan to hold long term over the last few days. This lets me feel comfortable about sticking to the much shorter term options with higher IRR, if APO rallies I've got enough that I'll be happy either way.

Bought more APO. Should be pretty well filled up on this one right now other than some short PUTS.

Added to APO at 74.65.

I would like to write PUT options on BRK.B, unfortunately, I will need to wait until early next year until I can contribute enough to this account to do so. Do you write slightly OTM options, or risk it up a bit with ITM?

I've dabbled with writing put options over the last decade, and I currently write out of the money LEAP puts in my taxable account on margin to scalp some extra premiums while I wait to add to my otherwise fully invested (taxable) account. These aren't a huge impact to the taxable portfolio because I like to keep my maximum margin exposure if I'm assigned on options to under 20% of the portfolio weight (right now it's sitting around 15% if all were assigned). I've always avoided shorter durations because I'm trying to avoid generating short term trading profits for overall tax management. I recently setup a 401k for my small business where I'm finally able to max out the employer profit sharing and employee contributions and trade my individual account through a Schwab brokerage account. I just funded the $19,500 employee contribution for 2021 in full, and should be able to put in another $61,000 by early 2022 after doing employer contributions and front-running 2022 employee contribution. I'm awaiting approval on level 0 (the highest allowed for this type of 401k account) options privileges which would allow cash secured puts and covered calls. With the preamble out of the way, I would like to hone my strategy on writing cash secured PUTS in a tax deferred account, which is going to look a lot different than the OTM LEAP puts that I've traditionally written in a margin account. I will be writing options on shares that I want to acquire for the long term, but would like to: 1) earn an attractive rate of return on these positions in the event I'm not assigned the shares; and 2) get a good entry point on the shares. I'll use APO as an example, I already own shares acquired in the $30s, I'm short January 23 LEAP PUTS @ $65 in my margin account, I would like to add to my position so I'm evaluating short term cash secured puts that I could sell to earn attractive returns or an attractive entry point. I'm bullish on the underlying shares, and absent a market crash, I expect them to trade to $100 within the next 12 months. I don't want to miss out on the upside, so I want to be relatively aggressive on strategy to keep more upside if the shares continue to rally. So I see a few possibilities, and wanted to run them by the experts to see if I can gain some new perspectives. APO closed today at $76.29 Option 1: 12/10/21 $76 PUT - BID - $2.65 at market close, Price to acquire shares if PUT to me - $73.35 Total return if PUT expires worthless - 3.6% Annualized IRR if put expires worthless - 42.5% Option 2: 3/18/22 $75 PUT - BID - $5.50 at market close, Price to acquire shares if PUT to me - $69.50 Total return if PUT expires worthless - 7.92% Annualized IRR if put expires worthless - 22.4% Option 3: 6/17/22 $75 PUT - BID - $7.40 at market close, Price to acquire shares if PUT to me - $67.60 Total return if PUT expires worthless - 10.95% Annualized IRR if put expires worthless - 17.9% Option 4: 03/18/2022 $80 PUT - BID - $8.30 at market close, Price to acquire shares if PUT to me - $71.70 Total return if PUT expires worthless - 11.58% Annualized IRR if put expires worthless - 32.76% Option 5: 6/17/22 $80 PUT - BID - $10.10 at market close, Price to acquire shares if PUT to me - $69.90 Total return if PUT expires worthless - 14.45% Annualized IRR if put expires worthless - 23.97% Option 1 has a great annualized IRR, but it has two big negatives which is that: 1) if I get assigned the shares I pay the highest price; and 2) if the stock rallies hard over a short period of time I only stand to make a 3.6% total return. Option 2 may be a good choice, it gives me a mid level entry point, >20% IRR if it expires worthless, this still limits my total return to 7.92% if the stock continues to rally up to my price target of $100 Option 3 gives the lowest entry point if the stock tanks, but also gives the lowest IRR of all 5 choices, I feel that this is probably the most conservative choice . Option 4 is currently sticking out as the most attractive to me, would love to hear other's input...This is not the lowest entry point if assigned (but still better than the 30 day options), I can make 11.58% total return if the stock ends above $80 in the next 4 months, and my IRR is 32.76% which seems quite attractive for cash secured PUTS Option 5, similar to option 4, but you trade the more attractive potential entry point in the shares for a higher IRR. I'm considering selling shorter term in the money options, option 4 or something like that, so I can earn good IRR / buy the stock at a discount. Is this how you cash secured PUT experts would analyze this situation? What would you do?

Used the proceeds from my ill timed sale of APTS $15 call options into buying a few more shares of APO.

Sold April $15 APTS calls for $0.55 right before they blew out to $0.80. So now I have the $10/$15 call spread on for $2.40

Nice trade, are you going to let this one ride, or cover?

I feel your pain, and know exactly how you feel. Even as a salaried employee of a C-corporation that I own a 50% stake in, that's having a monster year, I can't get a good 30 year fixed for nearly enough to purchase anything but a shithole in California.

Late to the party... I bought $10 4/14/22 CALLS on APTS.

Sold puts on FISV 1/20/23 $95 strike price for $11.20. I'm selling some LEAP puts on margin in my taxable brokerage account on positions that I would like to add to over the next year anyway.

So what I think is more likely than a significant increase in the interest rate on the 10 year, is a possible 1-1.5% increase between now and June 2022. I've never traded a futures option, but I'm wondering if you could place a put spread position on where you buy an ATM put and sell an OTM put to try to get the most out of a potential increase from around 1.5% to 3%.

thepupil, are you using interactive brokers to trade the options futures? Right now I'm at Schwab and I don't believe I have this available. I've been thinking of switching to IB anyway to get paid for lending out shares and have substantially lower margin interest if I end up wanting to use margin more aggressively than I have historically.