All things STOCKS

#16,908
#16,908
Thunder Good-Oil said:
So my (small) VZ PUT buy just executed.

VZ 1/24/2025 $38.50 PUT (sold for $0.85)

I immediately entered a limit to buy (and close) the contracts with a good till cancelled limit order (GTC) at ($0.10). So if the shares fall and the contract price increases, I’ll own VZ shares at a lower cost basis ($37.65) than where it was when I opened the option position (and the current share price of just above $39). If VZ runs up and the options contract falls in price, I’d make $75/contract ($0.85-$0.10 = $0.75 x 100 shares/contract). Sometimes I’ll set the buy to close limit price much higher with a good for day only limit order. But I kind of want to buy the VZ shares, so I’m using the $0.10 (x 100 or $10/contract) for now. I might raise the $0.10 to around $0.25 in the next session or two if the contract price gets closer quickly. That way (if the contract is closed) investment capital is no longer reserved and I can repeat with different options contracts.

$3,850/contract (100 shares each of VZ) is unavailable as investment capital until 1/24 or the options are bought back and the contract is closed.

VZ is currently $39.12/share.
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I'm confused by your wording. In essence, you sold a PUT that executed, were assigned the shares, then bought a OTM PUT that cost $.10? Is that right or am I missing the boat here?
 
#16,910
#16,910
Vol737 said:
Thoughts? Off the cuff, not sure I like this, but I don't know what I don't know here.

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I wonder if it really waters down the SEC’s role and other regulators that are supposed to protect consumers and unsophisticated securities owners.

I’d think that the giants would have a pseudo fiduciary involvement just to avoid litigation. But a lot of small, scammer types of p/e firms could spring up that are in cahoots with shady businesses. I’d imagine that the penny stock level of closely held private companies would rip off every last dime of profits as bonuses and other comp for the insiders while leaving nothing for the retirement account owners.

I’m long BX, BLK, APO, KKR, CG (for now), and MS so I like the opportunity. C and SCHW as well and I think they’d get involved.
 
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#16,912
#16,912
Thunder Good-Oil said:
I wonder if it really waters down the SEC’s role and other regulators that are supposed to protect consumers and unsophisticated securities owners.

I’d think that the giants would have a pseudo fiduciary involvement just to avoid litigation. But a lot of small, scammer types of p/e firms could spring up that are in cahoots with shady businesses. I’d imagine that the penny stock level of closely held private companies would rip off every last dime of profits as bonuses and other comp for the insiders while leaving nothing for the retirement account owners.

I’m long BX, BLK, APO, KKR, CG (for now), and MS so I like the opportunity. C and SCHW as well and I think they’d get involved.
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I've held BK and JPM for a while now. My first reaction is I would rather just invest in these investment banking institutions and ride the wave of their success as opposed to letting any of them have their hand in my 401k. That's what myself and my advisor are for.
 
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#16,913
#16,913
Freak said:
I'm confused by your wording. In essence, you sold a PUT that executed, were assigned the shares, then bought a OTM PUT that cost $.10? Is that right or am I missing the boat here?
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Not assigned the shares yet. The $0.10 limit order is there only to turn a quick profit if the shares soar in a day or two after the initial options contracts being sold.

The order to sell the PUT contracts executed. So in my account I’m short the contracts. The status of the contract execution is TBD.

I sold contracts on stock that I don’t mind owning, so if share prices fall I’ll be assigned no later then right after the contract date. One of two scenarios will play out. If the underlying share prices go up, I pocket the amount that I sold the contracts for as pure profit. Then my capital is freed up to be used elsewhere. The other scenario is that the underlying shares fall below the strike price and I will be forced to buy the shares at a strike price above the market price for the shares. BUT the price that I pay will still be less than what it would have been had I bought the shares directly on the day that I sold the PUT option contracts.

A third scenario is that if the shares rise in value AND therefore the options contract for the PUTS falls in value, I have a limit order in place to close my short position in the PUT contracts. The MAXIMUM profit that I can make after selling the put contracts are what I sold them for. So if I quickly make 50-75% of that I’ll close out the position with the limit order to buy back the contracts that I entered immediately after I sold the contracts. I use 2-3 week contracts, so if the underlying shares go way up but not enough that I took the quick 50-75% profit I’ll typically ratchet down my purchase price on the limit order to buy back and close the PUT options contract. A lot of times I’ll buy with a day or two left with around 90% of potential profit already made.

I’m pretty much just enhancing returns on stocks that I’d like to buy. The biggest risk is that if I really want to own shares, my price could be much higher to buy the shares if the options contract works in my favor. It’s also a big risk to short the PUTS if the underlying shares where to crash. But I’m usually pretty selective about the shares that I’m chasing. VZ isn’t too risky. PLTR is very risky.
 
#16,914
#16,914
Freak said:
I'm confused by your wording. In essence, you sold a PUT that executed, were assigned the shares, then bought a OTM PUT that cost $.10? Is that right or am I missing the boat here?
Click to expand...

I worded the first sentence backwards.

“So my (small) VZ PUT buy just executed.”

I SOLD the put. I’m contractually obligated to buy shares.
 
#16,915
#16,915
Private Equity:

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#16,917
#16,917
Vol737 said:
Yeah, when I saw the statement that $12 TRILLION is housed in 401Ks, I knew two things: 1) They see that, too... and 2) they're looking at a target rich environment for ridiculous fees.
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Steve Cohen (who owns the Mets) charges up to 30% of the profits. I thought I read a few years ago that he charged up to 40%, but I couldn’t find that article so I may be mistaken.

IMG_7439.jpeg
www.forbes.com

Institutions Are Dumping Their Hedge Fund Allocations On A Massive Scale

These funds have generated robust returns, with the largest Composite fund returning an impressive 20.5% for the first eight months of 2022.
www.forbes.com www.forbes.com
 
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#16,918
#16,918
@1RBFjr said:
Steve Cohen (who owns the Mets) charges up to 30% of the profits. I thought I read a few years ago that he charged up to 40%, but I couldn’t find that article so I may be mistaken.

View attachment 713322
www.forbes.com

Institutions Are Dumping Their Hedge Fund Allocations On A Massive Scale

These funds have generated robust returns, with the largest Composite fund returning an impressive 20.5% for the first eight months of 2022.
www.forbes.com www.forbes.com
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Oh yeah, no thanks. I will say my 5 year return is ahead of the S&P by a fair amount. Granted, I took some unusually big swings during Covid and it paid off and I've been fairly aggressive in the markets for a while making up for perceived lost time/opportunity due to circumstances within my industry. I've been more in line with the S&P over the past year or so. I think I'll keep my current arrangement. I can only imagine the deluge of solicitations if these guys go through and pick off names with decent money in their 401K's.
 
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#16,923
#16,923
Hot jobs report. No rate cut for foreseeable future. Maybe later this year. I get it, but the market prematurely, I guess, priced in multiple cuts through the year and now it’s giving up some big gains.
 
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