Stocks to Watch Thread

[Rich]

I bought a GME put this morning. Should have bought more than one.

If it hits 40 tomorrow, I'm coming in hard.

 

[KI4MVP]

This was a terrific play. I really need to adult up into options.

I resisted options for the longest time, but finally took the dive last year. Sometimes I lose every cent I spend on them (which is the reason I resisted), but overall I'm ahead.

Timing is so much more important since they do expire.

Usually my favorite option trade is to sell a cash covered put at a price I don't think the stock will hit, but would be okay buying it at. You just let those expire and keep the money you sold it for. Just have to make sure it's a good enough return to tie up the cash that long.

Another trade I made today was bought 100 shares of a stock and sold an august covered call about 25% above the current stock price as a single transaction. The credit on the call effectively cut the cost of the stock by about 25%.

I can't sell the shares without buying the option back before the option expires. But as long as the stock doesn't drop more than 25%, the trade is profitable.

I do cap my gains at the call price, but overall have to be happy if it goes above that. And actually has to go above it by more than the option was sold for to end up with less gain than simply buying the stock all while requiring less cash than buying the stock.

 

[Rich]

I’m curious on how many shares and how diversified is everyone here carrying in their portfolios? I know Motley Fool recommends carrying at least 15 different stocks, but they really don’t say how many shares should be carried. Obviously you should only use income that is disposable in order to invest

I have 8 different stocks, but the most shares of any single company was 15 (up until today). This morning I purchased 30 shares of Neptune Wellness Solution (NEPT), mainly because, well, weed seems to be popular these days and they were only $2 a share when I grabbed them.

I'm definitely not the most experienced but I believe the idea is that you own a roughly even amount of equity in each stock. So it's not really the number of shares, but the value of your position (so shares multiplied by price).

So then when a stock you have takes off and becomes a far larger portion of your portfolio, that's the signal to start selling some of that stock and taking some profit.

Now, I'm currently not doing that as AMD has taken, by far, the largest percentage of equity in my portfolio as it's soared.

 

[KI4MVP]

I’m curious on how many shares and how diversified is everyone here carrying in their portfolios? I know Motley Fool recommends carrying at least 15 different stocks, but they really don’t say how many shares should be carried. Obviously you should only use income that is disposable in order to invest

I have 8 different stocks, but the most shares of any single company was 15 (up until today). This morning I purchased 30 shares of Neptune Wellness Solution (NEPT), mainly because, well, weed seems to be popular these days and they were only $2 a share when I grabbed them.

I have stock and/or options on 14 right now. Most of it is in the Tesla I bought when the price was lower. I buy other things since it's so high right now, but don't' sell the Tesla.

If your interested:

AAL (a call that's likely going to expire worthless)
ARKF (own a $43.82 call that's was underpriced 4 months ago and has 2 1/2 months left until expiration)
ARKG
ARKK
ARKQ
CVAC
FOUR
GLSI (very long term play)
GME (own a put expecting it to fall below $20)
MAC (own puts expecting it to fall below $10)
MJ
PLL
SI
TSLA

 

[KI4MVP]

reason to own more than one is to spread risk. If one company falls apart, you don't lose everything. You also limit your upside as it's unlikely they will all over perform the market.

Instead of trying to spread it all evenly, I'm more comfortable doing it based on how well I know the companies.

 

[Rich]

A lot of my strategy is buying stocks with big dividend payments.

That way I'm hedging against a downturn.

That's not all of my stock picks, but a decent portion.

One of them, OHI, has made me a pretty decent chunk of money.

BUt I check my portfolio regularly. There's danger in picking fairly cheap stocks with high dividend payments.

 

[DJTJ]

A lot of my strategy is buying stocks with big dividend payments.

That way I'm hedging against a downturn.

That's not all of my stock picks, but a decent portion.

One of them, OHI, has made me a pretty decent chunk of money.

BUt I check my portfolio regularly. There's danger in picking fairly cheap stocks with high dividend payments.

If it’s not TMI, what are we talking about for a dividend payment per share?

 

[Rich]

If it’s not TMI, what are we talking about for a dividend payment per share?

OHI was almost 10% when I bought most of it.

They're steady with their payments. Made it for a long time and consistently raises them every year.

Obv, the problem with stocks like this is their value is almost entirely in the dividend payment. So then if the day comes that they ever reduce it, or let alone stop it for even a quarter, then the stock tanks.

 

[KCOTT]

I resisted options for the longest time, but finally took the dive last year. Sometimes I lose every cent I spend on them (which is the reason I resisted), but overall I'm ahead.

Timing is so much more important since they do expire.

Usually my favorite option trade is to sell a cash covered put at a price I don't think the stock will hit, but would be okay buying it at. You just let those expire and keep the money you sold it for. Just have to make sure it's a good enough return to tie up the cash that long.

Another trade I made today was bought 100 shares of a stock and sold an august covered call about 25% above the current stock price as a single transaction. The credit on the call effectively cut the cost of the stock by about 25%.

I can't sell the shares without buying the option back before the option expires. But as long as the stock doesn't drop more than 25%, the trade is profitable.

I do cap my gains at the call price, but overall have to be happy if it goes above that. And actually has to go above it by more than the option was sold for to end up with less gain than simply buying the stock all while requiring less cash than buying the stock.

amateur investor here, don't know anything about options...where did you learn about them?

 

[KI4MVP]

amateur investor here, don't know anything about options...where did you learn about them?

The beginners option course here

tastylive Learn Center

tastytrade.thinkific.com

I don't remotely do all of the things they teach, but good to know the strategies.

Some of the multi-leg strategies that sound brilliant don't work as well as they sound in practice because the legs fight against each other as the stock moves. And a couple of the strategies have massive risk. For example, if you sell a call on a stock you don't own (an uncovered call), your risk is unlimited, thus if makes a big move up, you could lose your entire account.

They focus on selling options, and only buying them to reduce risk. Yet buying an option on a stock you expect to make a big move can have large returns. The reverse of the above example, if you buy a call and the stock makes a big move, you can have unlimited gains.

One thing to know about options too, is one option represents 100 shares of stock, but is quoted on 1 share of stock.

Typically you have to get approved for options trading, and they do it in steps, so you can't jump right to selling uncovered calls.

Really the only 4 that I will do are
- buy a call
- buy a put
- sell a put
- sell a covered call against stock I own (sometimes buy the stock at the same time)

 

[DJTJ]

I looked at GME this am, and saw 57 and that RH pulled the purchase limits. Shoots up 30 a share.

What a fucking stranglehold this shit was.

 

[Rich]

Damn it never got down to 40. Missed the surge.

 

[Rich]

I looked at GME this am, and saw 57 and that RH pulled the purchase limits. Shoots up 30 a share.

What a fucking stranglehold this shit was.

I cant believe that many people are still using RH.

 

[Rich]

@KI4MVP great call on CAVC. Up over 20% since the day you made that post. Got in just at the right time.

 

[KI4MVP]

I looked at GME this am, and saw 57 and that RH pulled the purchase limits. Shoots up 30 a share.

What a fucking stranglehold this shit was.

was temporary surge, will likely be red by end of day