Stock market.... What are you doing?

[hoosierdoc]

USOI appears to actually pay the dividend but then the share price drops by about the same. it looks stable over last six months though

 

[foszoe]

That's pretty typical.

USOI appears to actually pay the dividend but then the share price drops by about the same. it looks stable over last six months though

 

[hoosierdoc]

I got a guy wanting in mewe deal. On another note, check out TRVN.....they are going to be a disruption to big money in the operating room. I am buying the stock around $2......and selling March covered $2.50 calls for 50-75 cents each. This is a longer investment for me. Goal is to own shares for free.

What are they doing in the OR space? It looks like they are pharmaceutical based for neuropathic pain and seizure medications? I like the idea of going long and selling covered calls on a stock that doesn't move a lot. Will you just own them outright and hold once you covered their cost with options?

I like the strategy, I came alongside you with Jan 2.5 calls and March 2.5 calls.

 

[maxwelhse]

USOI appears to actually pay the dividend but then the share price drops by about the same. it looks stable over last six months though

I bought what I can afford to lose just to play. We'll see what happens.

 

[smokingman]

Where can I find out more about this exemption and the limitations?

The best place is through your 401k managing company.

 

[CHCRandy]

What are they doing in the OR space? It looks like they are pharmaceutical based for neuropathic pain and seizure medications? I like the idea of going long and selling covered calls on a stock that doesn't move a lot. Will you just own them outright and hold once you covered their cost with options?

I like the strategy, I came alongside you with Jan 2.5 calls and March 2.5 calls.

That is exactly my plan. Hope to collect premiums without losing shares, and have the premium buy me shares for free. Worse case we own the stock at $1.50 for now and if they get called at $2.50...we still make 50%. I did this with this stock a few months ago.

The drug they just had approved for OR setting is Olinvyk, it is suppose to be a safer Morphine. It will hit the market early 2021. My only fear is they have $110,000,000 in the bank, I don't know how much it will cost to market this drug....so they may have to raise money unless they get bought out. They just filed an S-3 form, so that tells me they plan on the stock running at some point, and they can now sell shares to raise money when price is higher. I am just not sure what it will cost to actually market the product. Hope it works out for us.

 

[hoosierdoc]

VXRT is another one that is attractive for selling short-term covered calls

 

[hoosierdoc]

I bought 400 shares of VXRT and sold covered calls for dec 24 at 8.5. that's a 5.6% return in a week if it does not execute. hope to keep doing that. $160 per week adds up, assuming stock doesn't crater

I'm more nervous about underlying price of VXRT than CCL or TRVN. But in 4 weeks if I keep cycling covered calls my basis will be down to $6/share, and $4.50 in two months.

best laid plans... I know....

 

[CHCRandy]

Yeah Doc, We timed TRVN perfect I think. I have not sold covered calls on it yet...trying to get 80 cents for them, may switch to $3 sells. Options are the way to go....I tell every person that asks me questions about trading to learn options.

 

[hoosierdoc]

Yeah Doc, We timed TRVN perfect I think. I have not sold covered calls on it yet...trying to get 80 cents for them, may switch to $3 sells. Options are the way to go....I tell every person that asks me questions about trading to learn options.

My problem is I tried to play them like a roulette wheel instead of with a proven strategy.

I sold some AAL calls today.

Bought AAL at 16.75. The Dec 24 17 call has a bid of $0.57, the 17.50 has a bid of $0.40. Is it better to sell the 17.50 hoping the shares don't execute, or take the higher contract price with a higher chance of it executing, and then simply rebuy shares and sell another call? The $17 call had a 3.4% return but if it executes, only a 4.9% return. The $17.50 has a 2.8% return immediately but a 6.8% return if it executes. not sure which is better long term.

I need to read about this and understand it

https://optionstradingiq.com/the-wheel-strategy/

 

[nonobaddog]

Yeah Doc, We timed TRVN perfect I think. I have not sold covered calls on it yet...trying to get 80 cents for them, may switch to $3 sells. Options are the way to go....I tell every person that asks me questions about trading to learn options.

I don't know about options. What happens if you have sold covered calls and the stock price goes down? Because of the calls does that mean you can't sell the stock even if you just want out?

 

[hoosierdoc]

I don't know about options. What happens if you have sold covered calls and the stock price goes down? Because of the calls does that mean you can't sell the stock even if you just want out?

If you are selling a call, someone is paying you for the right to buy your shares at a certain price at a certain date. If it's a $10 stock, you sell an $11 call a month from now for $0.25 a share. One contract is 100 shares, so you got $25 from that person. If on the strike date the stock is worth $9, they won't execute the contract because it'll cost them $2/share, they could just buy 100 shares for $9 each if they wanted on the open market. So your $1000 worth of shares you owned is now worth $900, but you have $25 of their money, so you really have $925. If you own the stock anyway, selling calls is a way to profit off it either not moving up above the contract price, or going down.

If the stock went to $12, then the person will buy it from you for $11. So you sold 100 shares for $1100 and you still got to keep the $25. I'm hoping the stock does not hit the strike price and I keep selling contracts that will never execute. BUT, if they do execute, I'm guaranteed a profit, just not as much as if I just owned the shares outright.

Of course at any time you could "buy to close" a matching contract to close your position out. If I sold one 11 call on Dec 24, I could buy one $11 call for Dec 24 and then have no position.

A naked call/put can have "unlimited risk" because you don't actually own the shares. If your contract gets executed and you don't already own the shares, the brokerage will buy the shares for you at market price to cover the contract. If it's a $11 contract and the stock went to $300, you will be buying $30,000 worth of stock for someone else, who paid you $25 for the right to buy that $300 stock at $11.

 

[hoosierdoc]

final play for a while will happen tomorrow I think. BE, Bloom Energy. Hydrogen fuel cell company that has had increasing revenue for years, doing well this year, esp since election.

 

[CHCRandy]

I don't know about options. What happens if you have sold covered calls and the stock price goes down? Because of the calls does that mean you can't sell the stock even if you just want out?

Like Doc said....if stock starts falling you can always buy the calls back you sold, because they will be falling as well most likely. My strategy on this is I try buying a stock I like anyway and would be willing to buy at the discounted price anyway. SO like TRVN for example, I want it long term...so paying $2.10 and selling .60 covered calls gives me the stock at $1.50, which I would love to own it at.

 

[nonobaddog]

That does make sense. It looks like my accounts are not set up for options trading so I think I need to change them to margin accounts. Is there any down side to that?

 

[hoosierdoc]

That does make sense. It looks like my accounts are not set up for options trading so I think I need to change them to margin accounts. Is there any down side to that?

they may run a credit check. just read a lot on the risks of options. you can lose 100% of your investment depending how you do it. selling covered calls the risk is the stock goes down, just like owning anything

 

[hoosierdoc]

if the covered call drops in price do you ever buy to close and then resell to lock in a gain?

I am going to move to Robin hood for options i think. ameritrade has commission and $20 assignment fee

 

[nonobaddog]

if the covered call drops in price do you ever buy to close and then resell to lock in a gain?

I am going to move to Robin hood for options i think. ameritrade has commission and $20 assignment fee

Oh thanks. Mine are with ameritrade right now.

 

[muncie21]

Try Ally Invest (used to be Trade King) for option and stock trading. Options have a sliding scale fee, but can be purchased/sold for as little as $0.50 per contract. Plus, they don't require a margin account for trading covered options.

 

[nonobaddog]

If the stock hits the strike price and they want to buy the stocks - do you have to do anything or does your stock just get sold?