OT: Stock and Investment Talk

[RU-05]

I have no idea what this means. LOL!

I own the stocks, thus the calls are covered.

I'm selling a contract which gives the buyer the right to purchase 100 stock's from me at a certain price during a certain window of time. The amount for which I sell the contract is the premium.

For instance, as I noted above I sold a covered call in Sofi. The purchaser of the options contract now has the right to buy Sofi from me for $16 by Aug 27th(I assume by the close?). They purchaser paid me $3(not $2 as I noted above) for the contract which is the premium. Sofi is currently trading for 14.69. So unless Sofi get's above $16, I just raked in $2.49(ETrade took .50 cents in fees) for nothing.

If it get's above $16 and the option is exercised I keep the $2.50, plus get the $1600 for the stock sale.

It's kind of a can't lose. I mean if it get's to $18, and I'm selling for $16, that will sting. So I'm limiting my upside, but I'm OK with that.

Again this was my first ever options trade, so I'm early in the learning curve, and this is the most basic of options contracts(and the only one I'm currently allowed to trade, ETrade is pretty tightly reigned).

 

[RU-05]

Picked up a small position in EDU, $2 a share. This is one of those chinese private educational stocks that is down like 99% in the last couple months.

Pays a 9% dividend with a ex-date of Sept 1st. Immediately sold some $3 Sept 17th calls against it, which is good for 1.5%.

It did have a big 20 something % jump yesterday as the chinese stocks perhaps have found a footing.

High risk high reward, as this one could def go to zero.

 

[T2Kplus20]

I own the stocks, thus the calls are covered.

I'm selling a contract which gives the buyer the right to purchase 100 stock's from me at a certain price during a certain window of time. The amount for which I sell the contract is the premium.

For instance, as I noted above I sold a covered call in Sofi. The purchaser of the options contract now has the right to buy Sofi from me for $16 by Aug 27th(I assume by the close?). They purchaser paid me $3(not $2 as I noted above) for the contract which is the premium. Sofi is currently trading for 14.69. So unless Sofi get's above $16, I just raked in $2.49(ETrade took .50 cents in fees) for nothing.

If it get's above $16 and the option is exercised I keep the $2.50, plus get the $1600 for the stock sale.

It's kind of a can't lose. I mean if it get's to $18, and I'm selling for $16, that will sting. So I'm limiting my upside, but I'm OK with that.

Again this was my first ever options trade, so I'm early in the learning curve, and this is the most basic of options contracts(and the only one I'm currently allowed to trade, ETrade is pretty tightly reigned).

Got it! Sounds like a lot of work for modest gain.

 

[T2Kplus20]

Picked up a small position in EDU, $2 a share. This is one of those chinese private educational stocks that is down like 99% in the last couple months.

Pays a 9% dividend with a ex-date of Sept 1st. Immediately sold some $3 Sept 17th calls against it, which is good for 1.5%.

It did have a big 20 something % jump yesterday as the chinese stocks perhaps have found a footing.

High risk high reward, as this one could def go to zero.

Not a bad bet. You can only lose 1x, but if the Chinese gov says the right thing, it can 25x within a few days.

 

[RU-05]

Got it! Sounds like a lot of work for modest gain.

More work to type out the explanation then to make the trade.

Returns are modest, but a modest return is better then no return.

 

[toby83]

Picked up a small position in EDU, $2 a share. This is one of those chinese private educational stocks that is down like 99% in the last couple months.

Pays a 9% dividend with a ex-date of Sept 1st. Immediately sold some $3 Sept 17th calls against it, which is good for 1.5%.

It did have a big 20 something % jump yesterday as the chinese stocks perhaps have found a footing.

High risk high reward, as this one could def go to zero.

looks good, i was actually going to jump into COE this afternoon, have you ever looked at them?

*edit, not sure what happened to rest of my post*

the concern with COE is new govt regulatory where the teachers must be IN China, they can no longer use American teachers, which is big part of their remote/online business. their specialty is English language instruction...

 

[RU-05]

Dick's sporting goods up 15% on a big earnings call.

"Dick's Sporting Goods (DKS +15%) remains in the zone after reporting blowout Q2 (Jul) earnings results today. This is the second consecutive quarter in which DKS beat on earnings by over $2.00. The sporting goods retailer also raised FY21 earnings and revenue guidance for the second time this fiscal year. To top off these stellar results, DKS also announced a special dividend of $5.50 per share, a 21% increase to its quarterly dividend, and a doubling of its share repurchase program to at least $400 mln.

DKS has been on a monster run since hitting pandemic lows, seeing its stock up over 600% in that time."

"Diving into Q2 earnings, DKS posted earnings of $5.08 per share, beating the consensus by $2.26. DKS also continued growing revenue by double-digits for the fifth straight quarter as revs jumped 20.8% yr/yr to $3.28 bln, topping the consensus estimate. Lastly, same store sales remained robust in Q2, growing +19.2%, despite DKS lapping a quarter that saw comps jump +20.7%"

Current P/E of 12x.

 

[RU-05]

looks good, i was actually going to jump into COE this afternoon, have you ever looked at them?

Looks like a very similar story. Chinese private education company whose stock price has fallen off a cliff after the gov't clamped down on that industry.

I certainly don't look at this as a long term position, just a short term high beta play in the hopes that the chinese stocks rebound.

@T2Kplus20 says this could jump 25x, I think that is probably unlikely but a double is not at all unlikely. 4x sounds fairly reasonable. As does it cutting in half yet again.

 

[jtung230]

Made my first options trade.

Sold one Aug 27th covered call of Sofi. Strike price of $16.

After commissions I made $1.49.

I’m going to have to buy more now. It’s guaranteed to breakout in the 20s. 😁

 

[T2Kplus20]

Looks like a very similar story. Chinese private education company whose stock price has fallen off a cliff after the gov't clamped down on that industry.

I certainly don't look at this as a long term position, just a short term high beta play in the hopes that the chinese stocks rebound.

@T2Kplus20 says this could jump 25x, I think that is probably unlikely but a double is not at all unlikely. 4x sounds fairly reasonable. As does it cutting in half yet again.

EDU went from $20 to $2 all due to the gov. If things change, I can see it get back to FMV (close to $20). Yes, 25x is unlikely after reviewing the data.

 

[RU-05]

EDU went from $20 to $2 all due to the gov. If things change, I can see it get back to FMV (close to $20). Yes, 25x is unlikely after reviewing the data.

Look further back, EDU was as high as $200.

I think China forced all these private education companies to go non profit, and that's why these stocks crashed like they did. Unlike the tech companies, which have come down considerably, but nothing like EDU or COE.

 

[RU-05]

I’m going to have to buy more now. It’s guaranteed to breakout in the 20s. 😁

Expiration of Friday, so you'll need to get in now.

I'll probably look to sell more next week. I like these short termers.

 

[RU-05]

I also sold some January $15 strike calls of TELL, whose stock currently trades at $3.

Think this one is good for a 10% apy.

 

[jtung230]

Expiration of Friday, so you'll need to get in now.

I'll probably look to sell more next week. I like these short termers.

I personally don’t like to write options due to tax reasons. It is a good way to earn income when the market is flat.

 

[T2Kplus20]

Look further back, EDU was as high as $200.

I think China forced all these private education companies to go non profit, and that's why these stocks crashed like they did. Unlike the tech companies, which have come down considerably, but nothing like EDU or COE.

Holy crap, only looked back a year (or YTD). Definitely worth a bet. Also, I have to say, BABA around $160 looks tempting. However, CW said BABA is still in the gov's crosshairs.

 

[RU-05]

I personally don’t like to write options due to tax reasons. It is a good way to earn income when the market is flat.

Are they taxed differently then dividends?

 

[mdk01]

Are they taxed differently then dividends?

NOW you're asking?

 

[WhichReligionIsRight]

I'm long $SHOP

Personally think this company has done more to help small businesses than any other.

 

[WhichReligionIsRight]

 

[mdk01]

I'm long $SHOP

Personally think this company has done more to help small businesses than any other.

View embedded media

And now, with TikTok, they will be doing the same for China.

 

[phs73rc77gsm83]

I personally don’t like to write options due to tax reasons. It is a good way to earn income when the market is flat.

I agree. I don’t like the tax aspects but even more, if I like the company,I don’t want to sell my position to cover the calls. If I don’t like the company that much I’m not taking a position in it anyway. Decades ago a guy tried to talk me into selling covered calls in Amgen and Microsoft saying “you can make some income and if they go up sell your positions.” This was 1990 or so—-luckily I declined.

 

[T2Kplus20]

I'm long $SHOP

Personally think this company has done more to help small businesses than any other.

View embedded media

I'm a SHOP bull. I have a bunch of it in a few funds, including ARKF.

 

[mdk01]

I personally don’t like to write options due to tax reasons. It is a good way to earn income when the market is flat.

I generally agree, but there are exception. About a month ago I looked at a lesser meme stock I have held for a decade in my IRA rollover, not a penny stock, and there was a bid to buy a call 3 days before expiration at a strike price 35% above where it was trading. Well if you want to hand me $90. for 1 minute of work I won't turn it down.

 

[HeywoodGiant]

Do any of you guys recommend an etf?

 

[mdk01]

Do any of you guys recommend an etf?

That's like saying do you recommend a stock. If it fits your investment goal then the answer is yes.

 

[T2Kplus20]

Do any of you guys recommend an etf?

In general, ETFs are wonderful. Great way to build wealth.....buy and hold.

 

[rurahrah000]

In general, ETFs are wonderful. Great way to build wealth.....buy and hold.

Dude, you know that's not true. Not all ETF's are the same and they don't all go up in perpetuity. If you are referring to total market ETF, S&P 500 ETF then yes it will go up and good place to invest, but there are a lot of crappy ETF's out there.

 

[T2Kplus20]

Dude, you know that's not true. Not all ETF's are the same and they don't all go up in perpetuity. If you are referring to total market ETF, S&P 500 ETF then yes it will go up and good place to invest, but there are a lot of crappy ETF's out there.

General question, general answer. ETFs are a great investment vehicle. I like them more than funds, but still many more choices for funds.

 

[WhichReligionIsRight]

Do any of you guys recommend an etf?

QQQ, ARKK

 

[rurahrah000]

Look further back, EDU was as high as $200.

I think China forced all these private education companies to go non profit, and that's why these stocks crashed like they did. Unlike the tech companies, which have come down considerably, but nothing like EDU or COE.

If these companies were told by the government to go "for non-profit", shouldn't the stock be worth $0?

 

[WhichReligionIsRight]

General question, general answer. ETFs are a great investment vehicle. I like them more than funds, but still many more choices for funds.

Funds are good in a tax privileged account, but can be really inefficient in a taxable account.

We are also starting to see mutual funds converted to ETFs. DFA & JPMorgan just converted some funds. I wonder if mutual funds will even exist in 20 years.

 

[T2Kplus20]

Funds are good in a tax privileged account, but can be really inefficient in a taxable account.

We are also starting to see mutual funds converted to ETFs. DFA & JPMorgan just converted some funds. I wonder if mutual funds will even exist in 20 years.

Yes, overall the conversion from Funds to ETFs is a good development. However, managed ETFs are still very new.

Our biggest retirement account is a T. Rowe Price rollover IRA. We have 7 funds and only 1 recently also got an ETF option.

 

[T2Kplus20]

I think the market will like this data. Good economic news, but not overheating or beyond expectations:

Weekly jobless claims hold around pandemic-era low; GDP revised higher to 6.6%

First-time jobless claims filings totaled 353,000 for the week ended Aug. 21 while second-quarter- GDP growth was revised up to 6.6%.

www.cnbc.com

 

[RU-05]

NOW you're asking?

I assume it is. Not to worried about it at the moment. When it's time to file my taxes I'll figure it out.

 

[T2Kplus20]

Cramer - go big on semis and financials:

Jim Cramer says ‘run with the bulls’ and buy these winning stocks

"Forget about the money supply or the central bank and just run with the bulls," the "Mad Money" host said.

www.cnbc.com

 

[RU-05]

If these companies were told by the government to go "for non-profit", shouldn't the stock be worth $0?

Well they are down about 99%, so maybe it's on it's way there.

 

[RU-05]

Cramer - go big on semis and financials:

Jim Cramer says ‘run with the bulls’ and buy these winning stocks

"Forget about the money supply or the central bank and just run with the bulls," the "Mad Money" host said.

www.cnbc.com

Joe Tarranova was noting that LRCX was down near it's 200 day and thought this was a good entry point.

So while some of the semi's have lagged, while others have ripped, the laggards might be ready to have their moment in the sun.

I pared down a fair amount, but I still own a fair amount as well. I was too heavy.

 

[RU-05]

The Stl Louis Fed chair says he wants tapering to start soon and be complete by the 1st qtr of 2022.

Market barely flinched. Maybe the market reacts a little when it actually happens, but I think it's mostly baked in at this point.

 

[T2Kplus20]

The Stl Louis Fed chair says he wants tapering to start soon and be complete by the 1st qtr of 2022.

Market barely flinched. Maybe the market reacts a little when it actually happens, but I think it's mostly baked in at this point.

The tapering talk has been going on for 4-6 months. Also, the market is going up because important companies are crushing earnings. I agree with you that the market will only be modestly impacted by tapering. Actually raising interest rates is probably the big event.

 

[phs73rc77gsm83]

Funds are good in a tax privileged account, but can be really inefficient in a taxable account.

We are also starting to see mutual funds converted to ETFs. DFA & JPMorgan just converted some funds. I wonder if mutual funds will even exist in 20 years.

I know you know this but for some who may not, there are mutual funds that are tax efficient and suitable for taxable accounts (e.g., index funds). Also there is a significant range regarding tax efficiency or tax inefficiency even across actively managed funds. Your point is well taken, though, folks should consider the investment vehicle, it’s tax aspects, and account type (I.e., taxable or tax deferred, or Roth).