benchmark
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I'm curious what's the best margin rate out there from brokerage firms?
IBKR has 5.3%, is that the best?
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7 minutes ago, modiva said:
@RedLion Each land is purchased by a private fund where I am an investor and a general partner. A typical purchase is 500-2000 acres at a price point of $25-75M. Not all land is equal. The due diligence and thesis to determine what makes some land a high potential (5x potential in 3-5 years), with minimal downside is key. I can share details of a recent deal privately if you like.
@modiva Love to learn more about this as well.
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6 hours ago, johnpane said:
IRS Pub 550:
A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:
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Buy substantially identical stock or securities,
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Acquire substantially identical stock or securities in a fully taxable trade,
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Acquire a contract or option to buy substantially identical stock or securities, or
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Acquire substantially identical stock for your individual retirement arrangement (IRA) or Roth IRA.
thanks @johnpane.
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I have some INTC that I want to sell for tax loss before the year end, but also thinks that it will go up. I'm wondering if I sell the share today (at $26.xx) and then buy Jan 25 $20 option, would IRS consider that a 'wash sell'?
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4 hours ago, Spekulatius said:
On the other hand does anyone really think that Chinese Colleges are better than US ones ? Does anyone know of a Chinese American sending their kids back to a Chinese college?
One of my neighbors sent his son to Tsinghua, China's MIT.
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10 minutes ago, Dinar said:
Spek, I agree with everything that you are saying except for the last paragraph. There are different standards for regular kids/white&Asian vs black/hispanic/transgender/gay. I for one, cannot understand how Stuyvesant HS (a specialized high school in NYC where you need to take a test to get in) in NYC is 1% black when the city is 40% black, while Harvard freshman class is 22% black when the country is 12% black.
This is because Harvard is doing wholistic admission and looking for 'characters/charisma', which asian kids apparently lack
, but black/hispanic and other minorities have plenty. There was a law suit a few years ago on this.
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46 minutes ago, Spekulatius said:
The schools in the US ( I have lived in 3 states and my son went to school in all of them) are not necessarily bad, but the dispersion is huge. You can find crappy schools and quite good schools in the same town, sometimes even just a few miles from each other. It’s not the funding either. In the town in CA where I lived , i looked at the funding of schools and it often turned out that the schools with lousy stats had more funding than the schools with good stats.
Most of the differences is just due to demographics of the students that go there. In California at least, the schools with a high percentage of Hispanic students have low overall grades. It‘s not due to funding either since schools in the same town with less funding often get better overall scores.
Besides CA, I have lived in Long Island, where schools have excellent funding and well paid teachers and it shows. There were issues with drugs and bullying however. We are currently living in suburban MA and the schools are funded well, but not as well as LI, However, I prefer the demographics here and the drugs and bullying are much less an issue.
Anyways my son has to work quite hard. Plenty of homework too. He is doing some college grade studies in math for example in his honor class in math.
It also was mentioned here, that you don’t need to take AP and other tests to get into college. While that is technically true, you can’t really get into a good college that way. Maybe if you excel in some sport that the college is looking for. Otherwise it means probably community college.
This is spot on.
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5 hours ago, boilermaker75 said:
@rkbabang I wrote some May 20th $60-strike puts for $0.90 per share. I had orders in for some June puts but they didn't execute.
Did the same, but was a bit more aggressive -- May 20th $65 for $1.85.
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https://www.nytimes.com/2022/04/09/business/dealbook/09db-browder-russia-santions.html
Bill Browder's view is that this is likely going to drag on for a long time.
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Curious if there are recommendation of books/blogs etc. on how to start in VC investing? Specifically, how do you get connected into deal flows? and how to evaluate a deal?
Thanks.
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3 hours ago, Xerxes said:
People often like to compare the size and h/w of one nation's military to others or opponant and draw some conclusion.
Here is my take:
The last time PLA went to war was in the late 70s and early 80s, when it went to war against Vietnam, and came back with a bloody nose. Perhaps that was Deng Xiaping sending the PLA (potential kingmaker) south on an adventure while he consolidated power in Peking. Who knows. Reality is the antiquidated PLA got decimated by the veteran Vietnam (who had just send Americans packing to where they came from and that itself was after tag-baggin the French in the 1950s).
The Gulf War of 1991 and the Powel Doctrine unleashed on Iraq did however shock the Chinese to their very core. From there, they embark on multi-decade long effort to modernize their peasant-based armies. Contrary to Imperial Japan that had a blue-water navy operating in the 1930s and 1940s and ever since, China had only a brown-water navy in the 1990s. They were very behind and effort to modenize that also accelerated.
Fast forward to 2020s, their PLA is in a different shape and far more modernize, BUT critically they have NOT fought in an actual miliatry campaign for decades.
Even the mighty Russia, when it invaded Georgia in 2008, that military campaign outlined major deficiencies, which only meant acceleration of its modernization. The campaign on Crimea went better and now this. So the ability to project power on paper is very different that doing so in a real war. Russia, in the post Berlin War era, went through this steep learning curve. In a real war, it is all about logistics, logistics and logistics. China has not seen that in real time.
That is one, Two, China is not interested in distrupting the global world order in the same way Russia is, all they (China) want is dominion over that global world order, ... but in good time. There is no rush. You are not going to burn down the building, you know you will be moving in 5 years from now.
I agree with this. China is patient, as long as Taiwan is not forcing Xi's hand by declaring independence, they are not going to invade anytime soon. However, if Taiwan does declare independence tomorrow, Xi/China will act.
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2 hours ago, wabuffo said:
Keep in mind the style of warfare in Vietnam/Afghanistan vs Ukraine/China/Taiwan is very very different. Mainly due to geographics and population density. Guerilla warfare with a difficult to identify enemy hiding in tunnels/mountains via terrain that benefits defending against an unfamiliar foe. Look at Ukraine…air defense and tanks lead to fighting in the streets. This IMO is closer to “normal” fighting that we could expect vs jungle and dessert, and gives more of an advantage to the superior firepower and tech weapons available to be used.
Geography is also very important.
Taiwan is an island. A populous and well defended island armed with high tech weaponry. There has never been a successful invasion of a large well defended island in human history. Nazi Germany decided against it vs England (Operation Sea Lion) and the US also drew up plans for an invasion of Japan's main island (Operation Downfall) during World War II and scrapped it.
An invasion of Taiwan would require over 2 million soldiers (needs a 5-to-1 ratio vs defensive, dug-in army). Imagine how many ships, ferries, and carriers would be needed to try to cross 2 million PLA regular infantry across the rough seas of the Taiwan Strait while deeply hidden and deeply silent US nuclear attack subs hundreds of miles away wait to be assigned their targets. This isn't Normandy either - even if landfall is made, Taiwan's coastline is rocky and mountainous making its coastline very easy to defend by even a small force.
Very different degree of difficulty with low odds of success for the invading force. There's a reason it hasn't been tried in over 70 years - it's an unbelievably difficult operation.
Bill
Totally get this and I agree. However, if US were to defend Taiwan, I don't think it can do it w/o doing an all-out-war with China -- that means bombing/destroying military basis on the mainland, and that's a very dangerous path for us (and them). In the end, I think that the west will do what it is doing now with Ukraine, PR/sanctions, but not getting involved militarily.
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26 minutes ago, wabuffo said:
I think the war in Ukraine has unraveled the myth for the world to see with its own eyes that Russian (and Chinese militaries) relying mostly on conscripts with poor equipment and poor morale are somehow able to match US military capabilities and thus must be feared.
If China tries to invade or even blockade Taiwan, assuming the Taiwanese people wish to remain independent - I don't believe the PLA air force and navy could subdue the Taiwanese & US military (and Japanese Self Defense Force).
Bill
There is no doubt that US has the most powerful military force. I think the question is will US be able to afford/win a sustained war with China over Taiwan? We haven't been able to do that with Vietnam or Afghanistan.
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4 hours ago, ERICOPOLY said:
The $15 strike 2023 puts offer a 27% return to whomever writes them and $15 isn't far from here. I'm not sure why, the stock has not been volatile.
Seems like a decent return, except that you'd tie up your capital for the year.
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can you sell a stock at a loss, and buy a long term option within 30 days? for example, if one sells 100 shares of BABA today at a loss, can one buy 1 contract of Jan 24 BABA $125 option? does that trigger the wash sale rule?
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1 hour ago, ERICOPOLY said:
Care needs to be taken to assure that investors maintain at least a 15% band, even if that requires an out-of-pocket expenditure.
FB right now trades at $348. So I figure if you buy a put far below this level... like under $270 strike... then that should be well clear of this "15% band" that is recommended in the article above. The IRS apparently doesn't want you to be able to use a put to lock in all of your gains without leaving some of your skin in the game, so they'll rule it a constructive sale if you hedge with at-the-money puts.
So I believe you can use a put strike somewhere considerably higher than $180 without running afoul of what is recommended in that article.
Do you know the "15% band" rule documented somewhere? searching on IRS website didn't get me anything.
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5 minutes ago, ERICOPOLY said:
I bought the May put because it is only 30 cents.
It expires on May 20, 2022 and suppose the stock trades at $18 on expiration day. Will it still cost 30 cents for another 5 months of put protection? Hell no! It might be only 5 cents or 10 cents.
Why? Skewness. The further away from the strike price you go, the cheaper the put will be.
But if the stock is at $10 next May, well, I'll pay a lot more than 30 cents for the next 5 months.
So that's the tradeoff. Instead of locking in the put at a certain price until January 2024, I am betting that the stock will rise and I'll be able to lock in the longer dated put for a much lower premium in the future.
Got it. And the reason that you chose $10 put vs $12.5 is mostly just a consideration on how expensive the put is I assume, 30c vs 80c?
If the stock does go down to below $10 by May 22, then you total loss is $14.5 - $10 + margin cost + put cost.
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6 minutes ago, ERICOPOLY said:
So, for example, I paid 30 cents for my ATCO $10 strike puts. Annualized, that will cost 72 cents or 7.2% of the $10 that I am borrowing on margin. Now, if my margin interest rate is 1% then my annualized borrowing cost is about 8.2%.
Keep in mind that is non-recourse leverage.
Sure, I borrowed non-recourse at 2.8% against my home... but my home won't compound in value like ATCO will. So I think the logic speaks for itself.
I think I get it, the carrying cost is the margin cost + put cost annualized. One question, if you think ATCO is going to double, why not buy a long dated put option to get some long term protection?
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23 minutes ago, ERICOPOLY said:
Don't purchase the $380 puts because you're creating a constructive sale. You wrote $380... maybe you meant $180?
Portfolio margin works differently than Reg-T margin in that you are given credit for the fact that the puts hedge away your risk. Reg-T does not do that. You can get margin called in situations under Reg-T that could not possibly get you a margin call if your account were configured for portfolio margin.
does buy $180 put implies that a non-constructive sale? I actually have various strikes, does that mean that I have to buy puts at the various strikes so that it's not constructive sale?
If I do this, then my carrying cost is the margin cost + the cost of the puts, is that right? As long as FB appreciating faster (assumption), I'm in the green -- do I get this right?
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1 hour ago, ERICOPOLY said:
If it were me, I would exercise and hedge your margin borrowing with a put (but only if the account is configured with 'portfolio' margin).
Would you not have LESS risk by doing this if you go with a higher strike put than $180?
You'll be borrowing $180 per share on margin, but how can you possibly lose it if you hedge out the borrowing with a put?
If I understand you correctly. You are saying that exercise at $180, the buy some puts say Jan 24 $380 to hedge the potential drop of FB shares? I don't know much about 'portfolio' margin. The key difference seems to be that long options are marginable, but I don't know why this is required to execute the strategy?
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4 hours ago, aws said:
You could do something like turn around and longer dated calls against that to offset some of the amount on margin. But if they were ITM calls then the IRS would likely consider it a constructive sale, as anything that locks in a sizeable amount of your profit would be something the IRS is looking to tax.
Can you expand on this? Are you saying that I if exercise at $180, then turn around and sell some long dated calls say $350 in Jan 24, IRS would somehow tax me? Are they taxing me because I exercised the option w/o paying taxes or are they taxing me on the long dated calls?
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13 minutes ago, Gregmal said:
Unless this position is greater then like 20% of the portfolio I would not worry one ounce about some margin
Unfortunately, it will be greater than that
The other choice I have is to sell some BAC to exercise FB, I think FB has a high growth potential than BAC -- w/o the dividend though
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I have some Jan 22 FB $180 option that are in the money. Selling it would mean sizable tax bill. I think FB has some additional growth to go -- my guess is that FB share would still grow at 10% going forward for the next 2-3 years, even with their meta adventure.
However, exercising the option means that I'd have to use margin. Margin rate is manageable at the moment, but is this playing with fire?
Are there other strategies that I'm not aware of?
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4 hours ago, boilermaker75 said:
Excellent first post DJS
Edit: and welcome to CoBF
Exactly what I do now. Try to roll out the puts if I can pick up enough premium, unless I am doing it to pick up the shares.
when you roll out the puts, don't you lose money on your current puts already?
SIVB Bank Failure
in General Discussion
Posted
I think WFC needs spend money on lobbying. They need the cap removed -- "look ma, there are all these deposits that we need to take for the stability of the banking system, can you please remove the cap so that we can help?"