Board 8 > Stock Topic 25

(+) Yeah! (+)

I just did my very first option play! Covered call for Peloton tomorrow. 9 contracts, $107, expiry date tomorrow. Made $310! Lol.

Good job! If you do it out like a week you'll make a lot more per contract.

I recommend maybe not putting your entire set of shares into it if you're really long peloton just in case it flies-- you get to keep some of your shares that way

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Yeah Im playing around with how it all works. I think I can set a super long covered call for a strike price of the same price I bought it at, and auto profit that way?

As long as it ever goes back up to that price, that is.

Sunroof posted...

Yeah Im playing around with how it all works. I think I can set a super long covered call for a strike price of the same price I bought it at, and auto profit that way?

Not quite.

There are two ways you lose money in this scenario:
-Opportunity Cost: You could likely make more money some other way. You might make more money just holding the stock even although it is riskier.
-The stock going way down. Say you buy for $50 and sell a covered call for a $10 premium two years out. If the stock drops to $30 you are technically down $10.

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Well at least now I can make 3% of my money back per week...

EVRI up 3% premarket. Hopefully my words done fall on deaf ears when I say buy it under $15. It dropped all the way to $14.51 yesterday!

I jinxed it. Time to buy more if it dips!

I now have 10,000 shares of dnn. Let's ride or die.

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I am tired
Can I just sleep and wake up 3 months from now or something
Or just when NASDAQ reach it's peak again whenever that will be
Just...let me sleep and wake me up when it happens, thanks

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Haha nanis, I had that same thought two days ago.

DoomTheGyarados posted...

I now have 10,000 shares of dnn. Let's ride or die.

Oh ya go my DNN

...even though I'm no longer expecting a big spike this month. This is a long hold.

Tbh same I am probably done day trading for awhile. Amc calls, dnn, and Disney are my positions atm. Going back to pokekon fever

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So why is Facebook not affected at all by whatever happening to NASDAQ lately

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Now slightly green for the day....thank you Luckin Coffee.

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Peloton is going to hit $107 LOL

I lose $10k if it does.

If you get exercised and you still want to hold the stock you can buy it back on the market.

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Good point. I dont know what Id do though. Maybe only $50k worth this time around.

Andddd it hit. Crazy how my first time messing with options, this happens. Its a learning experience, at least now I know how to do this. Shame on me for choosing only a 4% gain in one day during a super red streak....

You might not have gotten exercised yet though. From what I understand options are usually exercised in the afternoon of the day of expiry. Until then, if the option holder wants to close the position they usually sell the option to someone else instead of exercising (since the option can go up more).

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Well its over $108 now. We will see but Im assuming it is getting exercised.

if you sell covered calls you should not plan on buying them back.

If you are tempted to buy them back you shouldn't have sold them in the first place.

What you can do is roll the position however. Basically in one move you buy back your CC and sell another one at a higher strike but further out in time for a profit. For example you could:
Buy back the 3/19 107 for ~1.8
Sell the 3/26 114 for ~2
making about 20 cents per share in profit and giving you a higher strike

(Also for covered calls i recommend 2 weeks - 5 weeks out because of stuff like this).

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Sunroof posted...

Peloton is going to hit $107 LOL

I lose $10k if it does.

Wait what?

You're absolutely doing this wrong.

You should never sell a call that will lose you money. Put the expiry out further and the strike higher.

Like what did you buy Peloton at?

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Apparently the reason peloton sunk so much yesterday was because a child died because of one. I didnt see that news until today. Lesson learned, but again, this wasnt out of greed. It was out of trying to learn. Lame.

Thinking about doing some verticals on gamestop. Looking at 28 day 100 puts, so Sell 100's buy 105's

Seems like a decent gamble that gamestop will come down to earth in the next month

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So Moonroof really lost 10k in an instant? or if PTON goes below $107 before market close he is still safe?

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masterplum posted...

Thinking about doing some verticals on gamestop. Looking at 28 day 100 puts, so Sell 100's buy 105's

Seems like a decent gamble that gamestop will come down to earth in the next month

I no longer hold GME but I am not sure the story is over there
It's been 10 days since the last time DFV posted his "YOLO" update. To me it feels like maybe he sold, but if he didn't and he post that he is still in...maybe it will add more power to the rally
According to his Twitter which is super vague and full of hints he is probably still holding to some extent, but his silence on WSB is suspicious

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Nanis23 posted...

I no longer hold GME but I am not sure the story is over there
It's been 10 days since the last time DFV posted his "YOLO" update. To me it feels like maybe he sold, but if he didn't and he post that he is still in...maybe it will add more power to the rally
According to his Twitter which is super vague and full of hints he is probably still holding to some extent, but his silence on WSB is suspicious

He usually posts on big spikes or eom

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Nanis23 posted...

So Moonroof really lost 10k in an instant? or if PTON goes below $107 before market close he is still safe?

Im new to this so Im not sure how it works. I think I might be safe if it closes under $107 though. Im not holding my breath.

Closed out GPRO at a profit of over 50% in about 2 weeks. Bought more SCHW - I decided since at this point SCHW is probably my highest confidence play AND it isn't a tech stock, thus providing some much needed sector diversification, it should get my largest weighting or at least close to it.

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Sunroof posted...

Im new to this so Im not sure how it works. I think I might be safe if it closes under $107 though. Im not holding my breath.

Can you tell me your positions

I know you sold 9 $107 calls but what did you get into PTON at?

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$117.74

Okay so I would recommend buying your calls back and eating a small loss on that

Then I would sell April 1 calls at $118 to offset said loss

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masterplum posted...

Thinking about doing some verticals on gamestop. Looking at 28 day 100 puts, so Sell 100's buy 105's

Seems like a decent gamble that gamestop will come down to earth in the next month

You say that, and then GME surges 25 points in 20 minutes.

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The key is you don't ever sell calls that would make you lose money if exercised unless you just want out of the stock. With PTON you don't actually want out of the stock so selling $107 calls is just dumb.

If you sell a call for less than your cost basis you're doing it wrong.

tl;dr never sell a call that has strike of less than $118. If you do that you cannot lose money.

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Well I dont think I can buy back in until Monday anyway? Since it didnt expire yet?

You can buy contracts before they expire at their market value.

You will have to pay more than you sold them for, but it's worth it to not lose 10k

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As long as it hasn't been exercised yet, you can close the call position by buying back the same number of calls that you sold. This will result in an immediate cash loss though as you're going to be paying much more than that $310 you received.

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Im going to eat this and put my money into a stock that i like more than peloton. Its left a bad taste in my mouth now.

Sunroof be a man and do some calls for Disney 250 a year from now.

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I did a short call in BAND. I originally bought $51k at $127.50. So my expiry date is 5/21 and strike is $140. This why if it hits its at a profit. I got $1900 for doing this!

So here's what you're going to do moonroof

You gained like $300 on your pittance calls yesterday

You need to buy your calls back. It's going to run you $140 or so per call. So you're gonna have to pony up around $1260. You'll be down $960 at that point.

You then resell your calls to the market, expiration April 1, strike $118. You will make $200 per call, so you'll be up about 1k at that point. The only reason to not do this is if you think Peloton is going to not get back up to what you bought it at ever.

Or you can just lose 10k to get that bad taste out of your mouth it's up to you.

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Lopen posted...

So here's what you're going to do moonroof

You gained like $300 on your pittance calls yesterday

You need to buy your calls back. It's going to run you $140 or so per call. So you're gonna have to pony up around $1260. You'll be down $960 at that point.

You then resell your calls to the market, expiration April 1, strike $118. You will make $200 per call, so you'll be up about 1k at that point. The only reason to not do this is if you think Peloton is going to not get back up to what you bought it at.

Or you can just lose 10k to get that bad taste out of your mouth it's up to you.

Buy to Open or Buy to Close? Im playing around and trying to see.

Buy to close.

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DoomTheGyarados posted...

Sunroof be a man and do some calls for Disney 250 a year from now.

I just checked and it pays out only $1190 for a 6/2022 expiry date at $250. Mind you, I have $25k in it only so only one contract worth.

Buy to close

$107 call 3/19 x9

Sell to open

$118 call 4/1 x9

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Lopen posted...

Buy to close.

Is this right?

I wish you didn't do this with so short notice. You really need to know what rolling is when selling covered calls (which Lopen is trying to manually have you do)

Also yea never sell covered calls at a strike below your entry point like mentioned

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Yes.

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Cool. Why 4/1?