A cash covered put is a lousy bet if the current ATM put 5-6 months out isn't paying at least 13%. The next time the VIX sustains 60 (it will happen...again), you'll get 20% prem for selling the 5-6 mos out ATMs on the SPY. THAT'S a great trade as price nears a major support. You can stagger entries down on the SPY just 5 times in that environment and get a great long term cost average the actual real-time market price never touched. I'm not looking at any options chains now, but those puts are probably selling AT THE MONEY 6 MONTHS OUT probably for some pathetic 5% premium, a HORRIBLE BET near all-time highs. It's the Millennials' turn to get wiped out during the next bear. This OP story is played out over and over on Stocktwits. You have to take losses. I don't care if someone wins 90% of the time. It's the 10% loss that takes it all away. You have a much better chance at long-term survival taking 50/50 chances where the reward to risk ratios are averaged out to 1.5x-2.0x to 1. That kind of trading is boring easy because the only question that needs to be answer correctly half the time is: "Am I currently entering during an ongoing trend?" (Yes, it IS just that easy and there's no "secret". I already mentioned how in the past few months.) Great trading requires a creative state of mind. Mark Douglas put it best when he said that creativity is absent in the presence of a strong belief system. Most of the guys I see on ET who are experienced enough yet still looking for help as they've failed for years to become net profitable (or treading water) have one thing in common: strong belief systems! I could describe how to trade successfully to one of these types, something I took a long time to prove out to myself and I'll get a lecture from 30 seconds of thought on their part. It's like clockwork...no thanks.
1. When was SPY "286"? Looks like the high was 284.37. 2. Looks like you bought at technically, "just about the worst time possible".... matched high/double top. If I were you, I'd be very defensive about this position.
Hmmm... Stock Charts shows the high that day to be 284.21. Regardless, that play is high risk and in jeopardy.
And if you lose your monies how can you pay your bills and expenses? Here is a trading idea. I bought the TWTR Aug 17 2018 $35 Put options @ $156-$165.00 last Friday. It is now $313.00 per contract. TWTR broke down of a trading range, gapping down last Friday. Price action looks still pretty strong on the downside so, TWTR probably, will continue dropping for atleast, a couple of more days! You could get in at around $313.00 and ride it down for a couple of days! Now, do not blame me if it goes back up and does not work for you!
Sounds like you don't have enough knowledge/experience to be fishin' in this hole. School is expensive. Will feel more so if you lose your capital. (I know about this. My wife is a doc. Said she didn't want to marry another doctor... "didn't want to have both in the family who didn't know anything about money".)
%% Thats what i was thinking; its going up, but AUG + SEPT can be the weakest month.......I like some/selected investments myself; but if that's all i have/ school, i may put a trailing stop@$275+ cut back / not put it all in one thing................................................................[Fire alarms/stuff happens happen, you may invest in a chart of what you did , unless you are the one in a million with photo memory]
Holding the SPY is dead money for you. You are not able to execute your strategy of selling puts. The logical move is to sell the SPY shares and go back to your money making strategy. Are emotions holding you back?
Warren Buffet said once something like the fist rule is to never lose money. Rule #2 is to remember rule #1. Selling now is losing money. That's what's holding me back. Plus I know people I went to school with are making money off stocks that have slipped in their portfolio but they don't share their secrets with me.