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What are you buying today?


LowIQinvestor

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Been rolling a number of my long positions into two year, deep in-the-money LEAPS which has freed up 40-50% of the cash in the positions.

 

 

Will be missing out on some sizable dividends, but have same notional exposure for capital gains and will hopefully make more than the dividends missed by putting the incremental capital to work as new names go down further.

Not a bad idea at all.

some of those premiums are pretty high looking

 

Honestly not for the names I've been buying. I've been getting most of them @ 3-5% premiums over current spot (not annualized - absolute premium) being patient w/ limit orders on volatile days.

 

Now, of course I'll be missing out on dividends so add that to your premium and it might be something closer to 15-20% total or 7-10% annualized.

 

All of that being said, a few of these limit orders filled and the underlying price ROSE before I could sell the underlying meaning my implied options basis is lower than what I sold the shares for implying negative premium on the transaction. Volatility = opportunity.

 

All in all its a fair price to keep my notional exposure while freeing up 40-60% of my cash which gives me incredible optionality both rising and falling scenarios.

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Been rolling a number of my long positions into two year, deep in-the-money LEAPS which has freed up 40-50% of the cash in the positions.

 

 

Will be missing out on some sizable dividends, but have same notional exposure for capital gains and will hopefully make more than the dividends missed by putting the incremental capital to work as new names go down further.

Not a bad idea at all.

some of those premiums are pretty high looking

 

Honestly not for the names I've been buying. I've been getting most of them @ 3-5% premiums over current spot (not annualized - absolute premium) being patient w/ limit orders on volatile days.

 

Now, of course I'll be missing out on dividends so add that to your premium and it might be something closer to 15-20% total or 7-10% annualized.

 

All of that being said, a few of these limit orders filled and the underlying price ROSE before I could sell the underlying meaning my implied options basis is lower than what I sold the shares for implying negative premium on the transaction. Volatility = opportunity.

 

All in all its a fair price to keep my notional exposure while freeing up 40-60% of my cash which gives me incredible optionality both rising and falling scenarios.

 

Real time example -

 

$3.00 Call exp 1/21/2022 on NLY was just purchased for $2.75 implying an underlying price of $5.75 in 2-years.

 

Current price is $5.50. >5% premium for 2 years exposure. NLY has a 15% dividend I'm missing out on too, so this is on the more expensive end of the trades I've been doing in the name - yesterday's was basically getting them right @ spot price.

 

But it's also an up-day and not a panic driven down day. Also, I don't imagine it'll take 2-years for govt guaranteed mortgages to trade back to NAV from 50% of NAV so I'm not likely not missing out on the full 2-years of dividends either as I'll exit the position close to NaV

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I have done very little with stocks for a year now, busy with new biz. I had a hard money deal pay off last week, good timing.  Yesterday the values compelled me to buy. 1/2 of net worth into mo, brk.b, tse, nc, ads, hca, kkr, bac, bk. Fun times, hoping for more volatility. HCA at 66? WTF. Why is fcau, fairfax, and home builders so cheap?

 

Any thoughts on 2 plus year calls on brk vs cheap margin if things get more interesting?

 

 

 

 

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Any thoughts on 2 plus year calls on brk vs cheap margin if things get more interesting?

 

I opted for calls to protect downside. Cost was not much more vs. margin. Until we know more about long-term situation, I felt it was the more conservative choice.

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Raised cash - about 20% now. Moved most non-dividend paying holdings into 2 year ITM LEAP exposure.

 

Probably will sit tight for a bit and raise some more cash over the next few weeks, see how this whole thing (starts) to shake out as we approach the warmer months.

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