Prophet00 said:
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.
I was in same boat. Keep in mind you do NOT have to buy big volume like some on this thread. You could just buy a few shares.
That's what I did on mgni...32 shares at 8.75. when it hit 17.50 I sold half and went net free. Obviously didn't use CC's or puts as part of the strategy but the same principle applies
One of OA1 earliest post talks about how his plays and going net free isn't about how quick it happens. It's about accumulation so over the long run you build up a bunch of net free positions and wait....one or two of them should explode and really amplify your return.
This past year has just been an absolute oddball and things have fallen perfectly for the timeframe to get those returns has become very short. I think a lot of folks lose sight of that.
So keep in mind, you can still start smaller positions and work it that way.
After mgni my first play for buying over 100 shares and using calls was sndl. I have expanded from there and made mistakes along the way but nothing very costly while increasing my account via net free method.
You could still try this on sndl and not eat up much capital either. Or buy 30 shares of wwr or eng or mbio. All still plays that OA1 and most of us are still in.
Really think of it like this...while building your equity say u buy 100 shares of wwr for $810 and sell a $10 cc for March 1.75 so your cost goes down to $635. If you get called out that's 365 profit in just 6 weeks! Who cares your position is gone...you're building equity. If not called out, sell another cc and put money back in your pocket