I am getting impatient waiting for Apple to move, so naturally, I am looking for ways to make a quick buck. Please tell me your opinion of my latest hare-brained idea. Like many here, I have accumulated a decent number of shares in APPL and a few other stocks. I sometimes sell covered calls against them, but given my long-term optimism, that is no longer appealing. Cash-covered puts make sense, but I prefer to have my cash invested. I have level 4 approval at my broker so I could write naked puts, but that is more exposure than I want to live with. I am considering stock-covered puts. I know but bear with me.
The idea is to write puts against shares I own and place a stop-loss order on the shares. For example, if I have 10,000 shares of APPL, I might write 100 put contracts at $100 with a long expiration, like July 23. Since I don't have $10,000,000, sitting in my cash account to cover the shares if they are put to me, I place a stop-loss sell order on my shares at 105. If Apple drops to 105, my shares are sold and I have the cash to buy the shares when they are put to me at 100. I realize that they might get put to me when the stock is much lower than 100, but at the end of the day, I am back in Apple with the same number of shares I would have had if I had done nothing.
I also have the opportunity to roll the puts further out every quarter, generating some additional income.
This strategy is premised on long-term optimism, but then, so is holding the stock. I would appreciate the opinions of the more experienced investors here. What I like best about his approach is, I don't have to deal with mortgage brokers
All models are wrong, some are useful--- George E.P. Box
"I am getting impatient waiting for Apple to move" Puts are the most stressful and least profitable positions. If the roof falls in on the market or Apple, there is no guarantee it stops at 105 on the way down. You are on the shit list behind all the brokers and their clients. If it drops to 85, they get theirs sold at 105, until the demand there is gone. SO you'd really have to cover them with actual puts not stock and do a put spread to be sure.
Chinese EV market is where things are moving fast. OLED is in a great space for its technology. Sell calls on the stock and buy them back as the stock goes up and own quickly if you want to jhave fun.
What I like best about his approach is, I don't have to deal with mortgage brokers
Depending on the length of time you would need a mortgage open, look at your options.
We might pick up a house around the corner. The owners had a reverse mortgage, and then over a couple years they both passed away. Now the company has to do a foreclosure, that would have been done more than a year ago but COVID stopped all sales. But, with rising prices, the opening price changed from not being enough of a discount for us to bother with, to being something pretty interesting.
Anyways, so I looked a little at getting a chunk of cash. I can still borrow at an amazing rate of 1.35%, though on IB you can get it even lower. The HELOC that I opened maybe 10 years ago is higher, at maybe 2.75%, but they sent me an offer for 2%. Even better, on their website it says new HELOC get .9% for 12 months, and that you can also get that rate if they increase your available credit. Our house has gone up considerably in the past 10 years, so it looks like I will be giving them a call.
Take a look at your various options. If you choose to use margin, just be very careful. Used moderately, it can be helpful. Used too big over a longer timeframe, it's likely to put you in a bad situation. These days I'm comfortable going 5% on margin, even if a dip would make that higher. But that's a huge difference from going anywhere near the maximums.
If willing to use margin if needed, one option on those puts is to only write a moderate amount, and be willing to buy the shares at $100 if it was that low (or below). Some people rationalize that as "of course I'd want to buy shares if it got that low". Just keep in mind that going too big could really hurt if the trade moved against you with something that seems unlikely now. I'd keep it moderate, or go with bull put spreads if you want protection of the trade really going wrong.
To me we're in this middle ground right now, likely not at the low or at the peak. Often that is not a time to deal with options. But that's your call.
We have the choice to build this board up, or tear it down. Make the right choice, or don't post here.
To All: Keep non-Apple SPECIFIC political stuff out of the daily thread. Thanks to name-calling and a lack of discussion, it's no longer allowed in the Dungeon either.
8-24-20 I give a 40+% probability on 15+% annualized returns for the next 2 years. For Sept expirations, using today's ($125.75), that's roughly ($146) for Sept '21, ($169) for Sept '22
Lumber prices are down more, at $718/thousand board feet. That's off a little more than 50% from the peak a couple months back, though this story claimed it's still double of the level before COVID...though I thought longer term charts showed it averaging around $450 to $500 per thousand board feet.
The red-hot housing market also saw a record shortage of existing homes available. In April, about 1 in 4 homes for sale were newly built, the highest share ever. Historically new homes make up about 1 in 10.
Recently, there have been signs of the housing boom fizzling. Weekly mortgage demand fell 6.9% last week to the lowest level in almost a year and a half.
Now, lumber futures prices are on track for their sixth consecutive weekly loss, wiping out all of their 2021 rally. The price fell another 5.2% on Wednesday to around $718 per thousand board feet.
“It was a bubble but it is still double where it was pre Covid,” said Peter Boockvar, CIO at Bleakley Advisory Group. Still, Boockvar believes just because the lumber bubble might have burst, it doesn’t mean the threat of inflation isn’t real.
SomeJuan: M1X... 16 cores of CPU, 16 cores of GPU, 4nm TSM fab, katy bar the door...
Jan 16, 2021 9:45:11 GMT -5
mercel: It's been a long strange trip - good to see you're still around (and in AAPL -my assumption).
May 10, 2019 12:48:32 GMT -5
Zeke: Long time no see. Nice to see familiar names still here.
Mar 25, 2019 14:42:52 GMT -5
sponge: Regarding the future of VR, I think it will be huge. I was a gamer when I was in college. But as an adult I lost interest. Last fall I flew up to visit my son at college and check out his new Vive set up. After playing with it for the weekend, I was
Apr 29, 2018 15:25:17 GMT -5
galleybob: thanks for your answer. I will copy and send to her
Nov 7, 2017 15:32:18 GMT -5
rickag: So since Jan 28th 2015 AAPL is up from 117.27 to 157.21
Aug 21, 2017 20:09:43 GMT -5
artman1033: VXAPL = 29.21 AAPL = $117.27 AFTER EARNINGS
Jan 28, 2015 14:54:46 GMT -5
artman1033: VXAPL = 44.94 AAPL = $110.39 BEFORE EARNINGS
Jan 27, 2015 11:12:53 GMT -5