I agree. That is crazy talk, you want me to trade between 3 and 4? My kids get home from school and 2:30 and 3; my spouse 3:30. They already think I'm wasting time on my "stock stuff" hobby (their words) for spending an hour or 2 on Wednesday and Friday mornings over coffee, and they aren't even here when I do it. Do you know how mad she would be if I was like "Go ahead and start making dinner without me, I'm going to play on the computer for an hour" I wouldn't say exactly that, but that's what she'll hear. Jokes aside, I did look at what your saying, and I get the gist of what your saying, some of its over my head, honestly, but I at least look into the trade example. The first thing I am seeing is part of my account, if you read the first post I said its across 4 accounts. Around 80% is in Schwab and that 80% is split almost 50/50 and one of those is Options Level:0. It cannot buy options on unowned assets. I'm taking this to mean I need 100 shares and not just 50 but I haven't tried. From how it reads on Schwab at level 0 you can only sell a call against a stock, it can buy puts as a hedge on a stock position, which I also take to mean I need to own the stock. I tried to get this level bumped up in the past, the other is Level:1 and nothing ended up happening. Both are IRAs one is a Roth so I can't just fold the account into one without downloading paperwork and mailing something in. I looked into that to. So if I want one cohesive strategy across my account what would you suggest? Honest question, you seem like you know what your talking about. Lets do a thought experiment instead: If you were in my shoes, you can only have 2 hours to prepare and trade (one hour premarket, and the first hour) on Wednesdays and Fridays. We will set aside the bad account structure I'm not defending it, its just what I'm working with. You have a small account, sub 100k, and you can only use Covered Calls, Cash Secure Puts, and/or buy a put as a hedge against a stock position. How would you approach this situation? It might seem like I'm messing with you, but I'm not. Follow me for one second... I feel like this is going to be a reoccurring theme. Someone is going to come read this journal and say; "Your trading B.S. for X reason and you should trade Y strategy instead" You were way more eloquent and nice about it, but that's a brutally condensed summary. I read through what you said, I looked into it, I gave you that respect. I'm not completely throwing out how I've traded more or less for 4 years (bullish years I'm not denying that) and I don't think any new trader that wanders in here is going to either. I'm open to learning how to do that stuff, but if your actually trying to help someone shouldn't you be starting where they are. I'm not just talking to poopy either; I am all for people coming here wanting to help make my trades better, but that's a better way to be helpful to me, and I'm guessing a lot of other people starting out. One last thing and this is for everyone reading: +$9769.03 9 (12.65%) is what my accounts show for this year. Unrealized or not its still positive. My average is again 13.31% since Oct 2020.(That is realized gain) I did that all by myself with CSP, CC, and Dividends. That's is the core trading I did in the last 4 years. I'm not arguing that its the best, I'm not arguing that its not risky. I'm not advocating that people trade this way, or pontificating about wheel trading at all. So until I have a strong reason, and I mean a big L. I'm planting my flag and standing beside my system because its working and its consistent. Average market return is 8% to 12% depending on who you ask so like it or not at 13.31% I can technically say I am beating the market. Technically that is a true statement.
You made 13% in a 24% market. Not to point out that you underperformed but it's obv not a glowing review of CCs.
Fact check...true. Also: From Investopedia The index has returned a historic annualized average return of around 10.26% since its 1957 inception through the end of 2023. So are you claiming that 13.31% is less than 10.26%? I did say technically it was true. I cannot help that my historic annualized average return of 13.31% only covers four years. And I did not claim year to year I was beating the market. Although I was until about Oct. 2023 according to my performance page. Pulling from my performance page: set to max (10/22/2020 to 10/18/2024) S&P 16.11% DJ 13.58% Russel 10.63% rate of return (annualized). Honestly, I was mostly trying to anticipate and get in front of future arguments. That last part sounds braggy, I know; but most arguments come down to something like "if X happens your screwed" Like the first guy about the Youtube stuff. And even though I kind of just whipped a bunch a figures and dates up there. I feel like I made a solid point, that no one has addressed. Sorry, I know I'm just using repies to you to just talk to the thread. I'm thinking about everyone that's going to read this. Hopefully people will find my point of view at least interesting, find my journal interesting. Anyway, the point: Everyone that reads this go look at a chart for SQ. Starting 3/15/2024 to today (10/19/24). The argument is once you get underwater with a wheel your screwed. The chart looks terrible, it definitely doesn't look like something to hold and sell calls on. I did it, I did roughly 30 rolls over that time. $2666.17 (32.93%) Gross Premium collected, $1596.71 (19.29%) Profit if my 1/17/2025 $70 Call gets exercised. That's a fact. I did it. there is not room in that for IF. You can follow along and see how that trade turns out. This year yes, S&P blew me out of the water. Expand that out to to my entire history on Schwab and S&P is only 16.11% and again....I'm 13.31% I feel like that's within a small enough gap that I'm competing against it. Plus like I said, I was outperforming it until about Oct. 2023 per the chart on my performance page. So I could say the only reason S&P is beating me is because it had such an outsized gain this year. In fact, if I change from max to Oct. 2023 I returned 12.17% and 11% (All isnt working but I can pull up each account by itself) and the S&P was at 8.49% (10/22/2020 to 10/31/2023) Lastly, this is to everyone. Anybody that wants to answer that thought experiment I posted earlier I'd be interest to read it. That part was completely serious. Tomorrow I am going to talk about my HIMS trade, I was looking at it Friday after market. Its a sub $25 I want to get rid of and I have some thoughts about it. Poopy, all due respect. I'm probably not going to reply anymore if you say anything. I feel like I made all the points I wanted to make on what you said. I'm not trying to be a dick, feel free to say whatever you want. Its not going to offend me. I'd rather focus on this being a trade journal. We can continue going back in forth somewhere else.
I was looking at HIMS Friday after the market closed. If price holds I’ll probably close this out on Wednesday and here’s why. I started it in June under the theory that positions on both sides of the Stock would lend itself to more consistency. On paper this makes sense, a move one way would open up one side of the trade. Set aside whether you think that's a bad idea because of a doubling of risk in position size. I just wanted to see what kind of consistency I could get trading this. Well, it came down and I ran into the problem I did in CLSK which is lower premiums force longer term trades. Now I’m sitting with a 1/17/2025 $18 Put and a 1/17/2025 $17 Call with current profit of $514.81 (12.33%) if it gets called away. Assignments rarely happen when you want them to… My Gross Premium is $946.75 (23.97%) with a cost to close around $780. Lets say $800 and look at the math. I’d still have $140 in Gross Premium which would be Profit if it closed. My equity would be somewhere around $288 (11%) on the remaining shares. I have 114 shares that cost $2376.94. This is where I’m running into issues, cause it's not really 11% unless you count the CSP as earning 0% for 4 months. I didn’t separate this out it was just a trade on HIMS and I don’t want to separate this out if I do this again in the future to keep my records simple. I’m mainly looking to keep my records accurate and as simple as possible, but I’m also not going to say I got 11% when there is more going on. For sake of comparison I did look at closing just the call as well and selling the shares and it goes as follows: I would get around $148 (5.8%) profit from selling the stocks and the Put trade would have around $275 Gross Premium which is 15.28% which I could then exit that side and have the original $140 and 7.5% in profit. Again though…taking the fact that the Calls would represent 0% over 4 months. So what would be the best way to show this? I was also looking at straddles and synthetic straddles last night trying to wrap my mind around that. In all honesty it still seems like I’m putting a bet on the market moving. I am looking at GM, markets are closed, so I know it's not exact. I don’t understand the benefit of 0 Delta when you're starting your position at a loss. You have to buy an option, so it's a loss; and you are betting on the price to move away from where it is now to make a profit. And I do look at options as bets on the market, maybe that's wrong. It does seem like there is a range in which the trade is going to be a loss, it may be a defined loss. So with a known risk you can extrapolate a Profit and Loss on your whole account based on your win percentage. That seems to be the idea with this, correct me if I’m wrong. Still, why is 0 delta good? How does rolling this work if I am wrong? Again looking at GM cause that was the stock the comment was on. I Buy 50 shares at $49.22, Buy the 1/25/2024 $50 Put for $1.55. So the position starts -$155. Theoretically GM moves up to $50 on Friday. Those 50 shares have a profit of $39, the Put is worthless and I’m still down -$116. I don’t understand what I should do, should I roll? Do I accept the loss as part of the strategy and set up to buy a Put next week (which just adds to my loss). Remember I only have Wednesdays and Fridays the rest of the week I’m either driving my truck, unloading it (cause we hand unload it), or sleeping during market hours. I don’t understand how this strategy would work for me. I am open to it, but I’m struggling with it. I also don’t understand why defined risk is better than defined profit, if you are using other methods to reduce risk. Hopefully someone will jump in and explain synthetic straddles better and help me make sense of this theoretical GM trade I started. I’ll be back on Wednesday…maybe. My partner is as far as I know is out for family issues Monday/Tuesdays. We drive as a Team, and he usually starts the drive on Sunday nights cause he works Wednesdays and I don’t. So if I have to drive out (which I’m not sure yet) my schedule will be completely backwards, plus I’ll probably pick up his Wednesday work, cause extra work goes right on top of my Guarantee Pay, so I might just do a quick post Wednesday and if I close HIMS give a P/L breakdown Friday. Fun Fact: I was suppose to be on vacation this week, but we are short drivers, so…
This is a test....sorting out how screen grabs and adding pictures here work No idea how to change size either
So this is what I was looking at this morning. I always start off looking to see what I'd be left with if I close out the profitable positions. HOOD I'm not worried about. I don't have another trade I'm looking at, and the money would just sit in my account til Friday anyway. TSLA would cut the locked in profit in half, so I'd rather just wait and see what happens after Earnings. It will either rise, which won't effect me, or it will fall and I can look at rolling that back and possible trading more on it before the end of the year. My adjusted price is $155.15 and my total buy-in is $221.34 and I've been in this position less than a year. Now to HIMS, I couldn't bring myself to exit the position fully. I closed the Put, I could justify that as reducing my exposure. I don't want to both sides a position, I tried it, didn't get a benefit. But my strategy is I reevaluate after a 20% gain or one year. I'm only 4 months into trading HIMS, and if my only reason to completely exit is "I don't like it" well that's not following my strategy. I still have $357.15 locked in with the $17 Call I have left. That is 15.03% I laid out my issues and thought around using that percentage but for the purpose of getting to the 20% mark to let it go I'm going to keep using it. That's all the stuff in Schwab, over in Robinhood GM came out with good earnings and jumped so I closed out GM on Monday for $2.03 and made $23.94 on the trade as a whole. GM is now trading above where I want to be in it at. I live a few miles from the Truck Assembly plant, they are having all kinds of issues popping up in the new at least locally. It could be nothing but it just makes me pessimistic on GM. Since I had some money burning a hole in my pocket, I looked around and nothing was really catching my eye. Then I saw DG was getting some love in the news. Its been on my dividend list for awhile now and at least based on dividend yield its undervalued. It dropped last earning and has been in the $80 to $90 range since then. I scooped it up with a Buy/Write, cause my last Buy/Write got hate on so why not. I bought 100 shares for $8075.50 and sold Fridays $81 Call for $77.97. The last thing I did was roll SNAP out to 4/17/25 $10 Put for $5.94. If you look through my position you'll notice SNAP is not there. That's because its in a small Roth account inside Robinhood. The account is only $1700 and I basically have it cause Robinhood gives you match 3% so I throw $50 in there every 2 weeks when I get paid and I wanted to see if could trade a really small account this way (I'm a "No" on that). That's all my trading info this is just a word on Dividends. I only look at 4 things when I evaluate dividend stocks. It has to have weekly options, that's what I like to trade. It has to have a good Payout Ratio and Dividend Coverage Ratio. And I use Dividend Yield Theory to assign an "undervalued" designation to stocks when their dividend is high within a rolling 10 year period. All that means is I think the dividend is a good value based on the last 10 years and the ratios just give me a sense if the financials are supporting the dividend or not. I don't put any thought into the validity of Dividend Yield Theory. If you attack it your wasting time time, I just use it to look at the value of the dividend. I have no idea if that means the stock is undervalued or not, and it doesn't matter to me one way or another. DG's dividend is 2.92% I can cut my adjusted stock price selling options, the dividend percentage will rise compared to the adjusted stock price and that makes me happy. I'll be back Friday to look at my positions again, probably roll HOOD, see where DG is at. My weekly premium is current -$68.70 from buying back HIMS so maybe I'll turn that positive. We will see.
Well, woke up to go to work and see that TSLA is up 12% in overnight, at least on Robinhood. Probably have to keep sitting on it and doing Assignment Rain Dances to try and get it called away. I also scanned through my last post and realized I really need to work on my proof reading and editing. Not going to lie, probably not going to happen. But I'll try to be better. I'm a 2 finger typer so my speed is abysmal, and I'm a bit...wordy.
I was looking at my number this morning and I had said earlier my current YTD was like 12ish% And I figured out these numbers and it was 12.9% and I couldn’t figure it out. I was doing this waiting for my coffee to brew and while I was making my first cup I realized I forgot how math worked. I was doing the percentage of today's balance but a YTD is from the balance at the beginning of the year. Pencil whipped it again and I am sitting at 14.83% YTD across all three accounts. Robinhood Roth was $1709.57 (+$91) and included just not pictured. I looked at AFRM again, I could exit my position and still have a 12% gain (pre-market). Or just wait until Feb. where I have 27% currently locked in. I’m about in the middle of the trade; it started 5 months ago, it has 4 months left. The numbers don’t justify a closure so I’m still sitting here doing dances. I’ve been told by a reliable source that those don’t work though, but I could use the exercise. I’m more disappointed at the thought my jokes are falling flat than the possibility people thinking my trading is stupid. Like all of them?? I’m just going to double down, I’ll add dad jokes in here if I have to. I rolled HOOD to the 11/1 $23 Put for $12.68. I’d really like to see a bad earning and HOOD fall cause I’d like to own it, I’d just like to own it down around $22. On the schwab side that would put my adjusted stock price at $22.48 so I’m right there. Like it or hate it I think Robinhood is going to at least have a presence in trading for at least the next few years so I am bullish on them. They keep teasing a new Desktop experience, which is annoying because they are basically saying “Look how awesome we are going to be…at some undetermined point in the future” They teased a debt or credit card awhile back and as far as I know they haven’t released it yet. I also rolled DG to 11/1 $82 Call for $40.96. That might go ITM before market close. I can’t complain, $118.91 gross premium. Getting called away would leave me around $243.41 (3.01%), If it crashes I have a 3% dividend I can use to wipe my tears as I cry myself to sleep. Since it is the last Friday of the month I look at my monthly premium. Add in the $53.64 from today I come in at -$15.06 for the week. I actually forgot why I had a large negative number for 10/18. I had to reread my journal to see that I closed CLSK. This is another reason I need to have a master trade sheet with all of my trades on it. I didn’t even record all my trades until a few months ago, and by the time I had gone back and recorded all trades for my current positions I realized I needed a master but didn’t feel like doing the work to set one up. I’ll start one in 2025. Anyway, for October I did end positive with $190.50. My saving grace was rolling TSLA out the first week of October for $218.49. That was my only trade in that Schwab account for the whole month. My gross premium through Oct across all accounts is $16,929.67 compared to $10,248.59 profit (premarket). I need to dig into my trading and see if I can do a better job of keeping more premium as profit. That probably won’t be until winter, but that is the reason I am saying premium and profit and I am talking about different things. Just as a side note: Wednesday I went down to the Building Dept. trying to figure out the status of the inspection on my garage. It passed, but I'm not receiving notifications. They say they are emailing me, but I can’t find them. So I’d like to get my garage drywalled, the ceiling insulated and all that done and inspected again before it starts getting cold. My plan was to have the garage finished so I could tear apart my C10 and get it road ready for spring. Its basically ready now if you ignore the questionable looking gas line (no leaks), rotten wooden bed floor, sketchy wiring for things like headlights and windshield wipers, and the 305 is running on 7 cylinders. I was driving it until the engine issue. All that to say, my time is going to be stretched thin. I’m still going to trade and keep this journal running. I’m just not going to spend a lot of time looking for new trades. I still have my watchlists, I have a $4000 slot I could try to fill in one of my Schwab accounts, but I’m in no rush.