Prophet00 said:

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Curious what you guys would suggest on trying to maintain a net free strategy when starting with lower capital?

Since I'm just starting out, I'm playing with $2k until I learn more (mainly through trial and error). Using IBIO as an example, buying a position large enough to move into CCs for protection would take more than 50% of your cash. If I'm trying to maintain around 5-10% a position, is it more cost effective to just play options, rather than buy shares?

I'm getting way more comfortable with buying calls and puts, still wrapping my head around selling them, and get completely cross-eyed when you all talk through spreads and butterflies.

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Pretty decent video on it.

Spread options are a good way to reduce capital investment, but like the video says, you can get eaten up in the Bid/Ask spread so watch those.


This is a good one as well..

BREwmaster said:

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ag94whoop said:

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Mostly Foggy Recollection said:

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No.

It dips, Clover addresses, and it shoots up. Both win.

I've heard of coordination like this before. May be nothing, but it crossed my mind.

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Maybe a squeeze play?

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it will definitely squeeze when they release news.

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I sure could use one of those 10-20X squeezes.

zwhag2010 said:

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FJ43 said:

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WWR

I know many of us are in this for the value it has ahead and of course being one of OA's favorite 2021 picks but not sure if anyone has ever posted of a chart of our little WWR.

Wanted to look back at it today to see what, why and when. Interesting where we are today and why rejecting levels the past week. Its healthy just find it funny every time when you look at the details.

Look back to October. Voooo Dooooo

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I'm in a situation where half of my covered calls are in Feb 7.5s and thus currently in the money. Not sure best course of action other than wait until it gets closer to expiration and time decay becomes bigger issue. It could very well pull back or even land on 7.5 on the dot like it did for 5 last month.

Thoughts?

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I am probably in line with BKL's (Bob Knights Liver) response. If they were 50% of my shares on a $7.50 call and I was in this for a $15 price target., I would wait to see if I can buy them back or roll them to a higher strike further out date. It may cost you a little for example to roll to $12.50s but with a $5 higher called away price tag. If we see a pullback that happens in a shorter time frame intraday, that is probably a good time.

Not sure I would do 100% of them though. Not knowing your entry cost you probably still have a very nice return for a relatively short period of time at $7.50+ premium paid to you on part of your shares. And your costs basis on remaining shares reduced a bunch as related to WWR shares.

Aggiesincebirth said:

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Bob Knights Liver said:

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I have 20 of those sold $7.5 calls for WWR. You described my thoughts - I will wait for it to get closer to decide what I'll do. If there's a big pullback I'll use that to buy them back. If we are over $8.50 or so on expiry day I will likely roll them out and up. If we are close to the strike I may just let those shares get assigned.

It will depend on what my ROR looks like for the additional value of rolling up versus the capital at $7.50/share for the additional time.

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I've got the same thing... $7.5 Feb and $10 Feb and the. $7.50 May which I have already accepted will be expired losing my shares but luckily those are the fewest number of shares of them all. I was wondering the same thing so good to know yalls strategy. Hoping it stays at $7.49 then moon shots on 2/22

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You have a few options:

1. Do nothing and let them get called away if greater than 7.50

2. Buy the 7.50 feb, sell the 7.50 March and collect more premium

3. Buy the 7.50 feb, and sell a further out strike and month for flat. With out looking at the values, you might be able to buy the feb 7.50 call back and sell the match 10.00 call at flat.
By doing the roll at flat, you are in the same premium position, but can pick up 2.50 in strike prices, but it locks your shares up for another month or longer

Prophet00 said:

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Curious what you guys would suggest on trying to maintain a net free strategy when starting with lower capital?

Since I'm just starting out, I'm playing with $2k until I learn more (mainly through trial and error). Using IBIO as an example, buying a position large enough to move into CCs for protection would take more than 50% of your cash. If I'm trying to maintain around 5-10% a position, is it more cost effective to just play options, rather than buy shares?

I'm getting way more comfortable with buying calls and puts, still wrapping my head around selling them, and get completely cross-eyed when you all talk through spreads and butterflies.

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I see a video was posted at least on options to help.

In terms of net free the shares don't have to be expensive to use covered calls or a net free approach. It may be hard to keep it to 5-10% of your account in some cases but an example would be SNDL purely for share cost and premium on calls. Buy 200 shares for lets say $1 (I know its above that now). Turn around and sell covered calls on half for .25 each (or more). You just lowered your cost basis on all the shares by $25 overall. If you work them you can often rinse and repeat that. Spikes you sell covered calls and falling back down you can often buy them back for a profit.

CIDM is another example. No options to use as leverage though. If you were following OA's lead on this one you bought around the mid $0.60s. Buy 200 for $0.65 each for a total of $130. You could sell 100 now and get all your capital back plus some profit. You are net fee on 100 shares and some extra to add in.

Doesn't have to be 100 share blocks either Just if you want to use options as part of the strategy.

One edit. Could be 10 shares you buy. When the price is to a certain point you can sell 7 shares that get all your capital back and now you have 3 net free.

Hope that helped a little.

for WWR:

• If it's under $8.20, I will buy the calls back for profit and sell March $10/12
• If it's between $8.20 and $10 on expiration day, I will roll the calls out and up for profit, probably to march $12s, depending on how close it is to $10
• If it's between $10 and $12, I will roll to a higher strike far enough out to make it worth it
• If its over $12, I will take getting called out, and then ruthlessly sell $7.5, $9, or $10P to get back in or keep collecting premium.

irish pete ag06 said:

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$30,000 Millionaire said:

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for WWR:

• If it's under $8.20, I will buy the calls back for profit and sell March $10/12
• If it's between $8.20 and $10 on expiration day, I will roll the calls out and up for profit, probably to march $12s, depending on how close it is to $10
• If it's between $10 and $12, I will roll to a higher strike far enough out to make it worth it
• If its over $12, I will take getting called out, and then ruthlessly sell $7.5, $9, or $10P to get back in or keep collecting premium.

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Thanks for this. I'm so new to options... that FEB19 is a big date for me. I have several calls and puts to make decisions on. I have already done some buying back of calls and covered calls, but I haven't had any get near expiration yet. This all makes sense.

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My recommendation (and this is in general not specific to your positions) for non weekly options is to make the decision to close or roll (long options) 7 days prior to expiration. The more experienced you get, you can cut the number of days down.

I had some WWR FEB7.5 in my dads IRA. I went to may and sold the 15's and made and extra 1.10. today. It was with 25% of his shares but I didn't want to loose them and I figured in MAy if they get called out thats a heck of a return for him.

BREwmaster said:

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this one has my interest... also has options and definitely has goal posts! for cc's, at close you could sell the March 12.50's for .63.

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Traderstewie usually finds some good ones. Will check it out o'dark 30 in the morning.