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Thanks again, Denny!

I put Natenberg's book on my list at Amazon. I happened to overhear I'm getting a new Kiindle Oasis for my birthday next month, so I'm holing out on a list of titles until then because it's waterproof. Yes, I read in ... strange places.

Thanks for the options info, I'm in. I have separate ports for separate goals too: Sheltered, Anchor, Discover and Cloud. Lol, Maybe you can tell what they're for? Might need a new one, Optional. Most of our ports are in Sheltered group (Saul-like) but Discover has been the most fun port and surprisingly, so far the most profitable.

I hardly ever drive the 'vette, can't go anywhere with the pandemic. It's 15 years old now and only has about 34k miles. I was going to order a new C8 (mid-engine) 'vette this year, but changed my mind. I'm evidently getting sensible in my "middle" ok, old, age. Man, sensible sucks. :)

Dan
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You can ensure your gains and put the thing out of your mind, by buying to close for the
cost of a couple of good Blue Burgers & fries. Or you can let them expire and take ispouse
out to eat with the savings.


Yes!


2. Is there a point when you would automatically consider closing early, say at a certain
percentage of gain?


Never "automatically" but since the option is a wasting asset I often buy them back early if they depreciate fast enough. Short term options are the most volatile. I recall one case where one option dropped by 50% the day I sold it so I bought it back. The next day it bounced back so I sold it again.

Yesterday a FSLY 95 call was expiring deep in the money. Let it be assigned or buy it back? I wanted the cash. The stock was in a bull run so I bought back the call for $25.30 and sold the share for $125 which paid an extra $4.70 per share and saved $6 in commissions. Net, an extra $476 to letting it be assigned.

You got to do the math, place your bets, and take your chances. This one worked out nice! ;)

Denny Schlesinger
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Thank you, Denny.

I recently accepted assignment of FSLY shares. I must have done the math a half dozen times to make sure I was "thinking right" and was still kinda nervous. :)

I let this one go. Not quite sure it was the right thing to do, but no harm no foul I guess. Wish I knew what you know about options. Thanks for sharing.

Dan
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No. of Recommendations: 10
I recently accepted assignment of FSLY shares. I must have done the math a half dozen times to make sure I was "thinking right" and was still kinda nervous. :)

A bit of grammar. The option contract is assigned, not the shares. If the option is a call the option holder "calls" the shares. If the option is a put, the option holder "puts" the shares. I'm not being pedantic, options can be confusing and it's best to try to be as clear as possible.


Wish I knew what you know about options. Thanks for sharing.

It's taken me over ten years to get here. First learn the basics which you can find on Google. Then get Option Volatility and Pricing: Advanced Trading Strategies and Techniques by Sheldon Natenberg

https://www.amazon.com/Option-Volatility-Pricing-Strategies-...

There are lots of ways of trading options and some trades have weird names that sound like catch-as-catch-can holds, "Iron Condor" sounds painful! LOL I don't do any of that. Most books about options teach these things but Natenberg explains how options work which lets you configure trades to meet your investing goals.

One of Warren Buffett's secrets is float, how to use other people's money without the risk of letting them ask for it back. Examples of float are insurance premiums, prepaid cards, and discount coupons.* I asked myself how an ordinary Joe can get float to play with. The options market is just like a casino, option buyers place their bets while option sellers play house. They say that options are risky and they are, but when you sell options you control the amount of risk you are taking, you control the risk/reward ratio. Selling covered calls is the lowest risk trade. If the stock goes down you lose less having sold the call. If the stock goes above the strike price you only have opportunity loss, not real money loss. In between it's all profit.

It was opportunity loss that kept my returns lower than Saul's and I found a solution for that as well. Now my portfolio is split into two. I have high growth stocks on which I will not sell covered calls, instead I get Saul like growth profits. The other part is dedicated to generating income to meet my ordinary expenses. These are stocks that generate the best premiums and I typically sell the calls at-the-money to generate the highest premiums. I don't care if these stocks are called or not. Once I made this separation my returns skyrocketed, enough income to cover expenses and hardly any opportunity loss.

But it did take me over ten years. My first "Natenberg" trades were made during December 2008. I made good money selling puts but later the puts showed how risky they can be. Now it's covered calls only.

You might also like Alan Ellman's Complete Encyclopedia for Covered Call Writing. It has less theory than Natenberg's book.

https://www.amazon.com/dp/B0064TJS7M/ref=dp-kindle-redirect?...

How's the Corvette?

Denny Schlesinger
 


* One of the wiliest things Buffett has done is to sell shares of a "regular" corporation instead of creating an investment fund. Not only did he get rid of the pesky regulations that "protect" fund investors buy ordinary shares cannot be cashed in! Better than even insurance float!
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No. of Recommendations: 1
Thanks again, Denny!

I put Natenberg's book on my list at Amazon. I happened to overhear I'm getting a new Kiindle Oasis for my birthday next month, so I'm holing out on a list of titles until then because it's waterproof. Yes, I read in ... strange places.

Thanks for the options info, I'm in. I have separate ports for separate goals too: Sheltered, Anchor, Discover and Cloud. Lol, Maybe you can tell what they're for? Might need a new one, Optional. Most of our ports are in Sheltered group (Saul-like) but Discover has been the most fun port and surprisingly, so far the most profitable.

I hardly ever drive the 'vette, can't go anywhere with the pandemic. It's 15 years old now and only has about 34k miles. I was going to order a new C8 (mid-engine) 'vette this year, but changed my mind. I'm evidently getting sensible in my "middle" ok, old, age. Man, sensible sucks. :)

Dan
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No. of Recommendations: 0
I was going to order a new C8 (mid-engine) 'vette this year, but changed my mind. I'm evidently getting sensible in my "middle" ok, old, age. Man, sensible sucks. :)


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Wait two years, they'll be higher engine horsepower options & the earlier versions will become CHEAP!!!




sunrayman
owner & operator, Shelby GT-500 rag top
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