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Post by sportsrancho on Feb 19, 2023 22:18:09 GMT -5
I didn’t realize you could use the margin. 👍🏻
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Post by cretin11 on Feb 20, 2023 7:35:35 GMT -5
You sure can, and ktim’s strategy has been excellent with MNKD for a while now. (There was a time when the same strategy was not nearly as good, but that was quite a while back.)
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Post by boca1girl on Feb 20, 2023 9:55:46 GMT -5
Ktim, I appreciate the education but I won’t be buying puts in margin. I’m a long term, couch potato investor, and swore I’ll never by on margin again years ago when I had to scramble to cover my margin.
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Post by sportsrancho on Feb 20, 2023 10:40:03 GMT -5
If the shares get put you, couldn’t you just sell them right away if you have used margin.
I’d really like to see someone lay out an actual trade in real time that they do…that would be really interesting.
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Post by cretin11 on Feb 20, 2023 11:25:54 GMT -5
If the shares get put you, couldn’t you just sell them right away if you have used margin. I’d really like to see someone lay out an actual trade in real time that they do…that would be really interesting. That's correct sports. However, to boca's point, if shares dip severely after you do your options trade and before the shares are put to you, then if you do sell the shares right away it still might not be enough to cure your margin problem. So if boca's temperament is to avoid risk, then it's wise to stay away from using margin. Gotta be able to sleep well! Here's a real life example from a couple of weeks ago: sold 20 put contracts for MNKD, strike price $5, strike date May 19, 2023. Price of puts $0.70, therefore a premium of $1,400. As long as MNKD shares stay above $5 then it's an easy win, keeping the entire premium or buying back the puts cheap before expiration. If MNKD dips to somewhere between $4.30 and $5, then might simply let the shares get put to me at $5, for essentially a purchase price of $4.30 per share. Now if MNKD plummets to $2, then on May 19 i'm stuck with paying $5 per share for those 2000 shares. If that happens, the $1,400 premium isn't soothing that burn very well. If i immediately sell the 2000 shares it only brings me $4,000, so including the pocketed premium that's $5,400 but i'm out $10K for those shares. Not good for my margin. That's just a simple example, and i apologize for not using proper investing terms or explaining it confusingly. After all I'm just a cretin. On the other hand, "even a cretin can do it..." |
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Deleted Member
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Post by Deleted on Feb 20, 2023 11:43:46 GMT -5
If the shares get put you, couldn’t you just sell them right away if you have used margin. I’d really like to see someone lay out an actual trade in real time that they do…that would be really interesting. That's correct sports. However, to boca's point, if shares dip severely after you do your options trade and before the shares are put to you, then if you do sell the shares right away it still might not be enough to cure your margin problem. So if boca's temperament is to avoid risk, then it's wise to stay away from using margin. Gotta be able to sleep well! Here's a real life example from a couple of weeks ago: sold 20 put contracts for MNKD, strike price $5, strike date May 19, 2023. Price of puts $0.70, therefore a premium of $1,400. As long as MNKD shares stay above $5 then it's an easy win, keeping the entire premium or buying back the puts cheap before expiration. If MNKD dips to somewhere between $4.30 and $5, then might simply let the shares get put to me at $5, for essentially a purchase price of $4.30 per share. Now if MNKD plummets to $2, then on May 19 i'm stuck with paying $5 per share for those 2000 shares. If that happens, the $1,400 premium isn't soothing that burn very well. If i immediately sell the 2000 shares it only brings me $4,000, so including the pocketed premium that's $5,400 but i'm out $10K for those shares. Not good for my margin. That's just a simple example, and i apologize for not using proper investing terms or explaining it confusingly. After all I'm just a cretin. On the other hand, "even a cretin can do it..." Yes, it was obvious you are a bit weak on certain terms. I saw no thrusting or wedging... |
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Post by mango on Feb 20, 2023 12:32:05 GMT -5
I thought it was also quite interesting Martin Shkreli published on his sub stack for his followers to sell Liquidia. Appears Squirrelli may not be so confident in their near term future, eh?
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Post by prcgorman2 on Feb 20, 2023 12:43:06 GMT -5
I thought it was also quite interesting Martin Shkreli published on his sub stack for his followers to sell Liquidia. Appears Squirrelli may not be so confident in their near term future, eh? I don't trust Martin Shkreli as far as I can spit. I have no recommendation on buying or selling LQDA but for all I know he is encouraging others to sell so that he can buy cheap-er. |
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Post by peppy on Feb 20, 2023 12:54:52 GMT -5
I thought it was also quite interesting Martin Shkreli published on his sub stack for his followers to sell Liquidia. Appears Squirrelli may not be so confident in their near term future, eh? I bet Shkreli shorted LQDA. However, I will never know. Just motives and all. |
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Post by mango on Feb 20, 2023 13:06:15 GMT -5
Either one of you could be right. We’ll likely never know.
Never trust a con man, eh?
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Post by ktim on Feb 20, 2023 17:30:31 GMT -5
Yes, selling puts via margin potential does carry risk of margin calls in worst case scenarios. In fact I wouldn't really recommend doing it now in the earnings price runup. I'd consider this IF we get a post earnings dip. Wait until it seems stabilized and then consider selling puts. Selling puts you inherently get downside protection equivalent to the premium, and with MNKD this can often be 20% or more. If done after a dip has already occurred, it can be a pretty attractive risk-reward ratio.
@sportsrancho, I have posted my real time put sell trades here 2 or 3 times in the past. I was short a bunch of $2.5 and $4 puts that expired end of last month. I've tended to use fairly long dated puts (like a year out) in order to have significant downside protection before I'd have a loss.
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Post by jkendra on Feb 20, 2023 18:25:23 GMT -5
I thought it was also quite interesting Martin Shkreli published on his sub stack for his followers to sell Liquidia. Appears Squirrelli may not be so confident in their near term future, eh? Was dreamboatcruise's last day logged in right around the time Martin had his access taken away ? I'm kidding of course but funny anyway.
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Post by ktim on Feb 20, 2023 18:38:53 GMT -5
Dreamboat... he was that iguana guy wasn't he. Some pretty insightful posts.
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Post by jkendra on Feb 20, 2023 19:13:52 GMT -5
Wait a second ktim your account was created just a few days....  
But seriously using options for trading MNKD for the past 5+ years was probably very stressful
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Post by cretin11 on Feb 20, 2023 21:02:00 GMT -5
Wait a second ktim your account was created just a few days....
But seriously using options for trading MNKD for the past 5+ years was probably very stressful LOL it’s never not been stressful 😆 |
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