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Post by ktim on Feb 21, 2023 16:57:28 GMT -5
Shoot, totally forgetting that UTHR is premarket tomorrow. Wish I had sold those puts today.
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Post by cretin11 on Feb 21, 2023 18:11:15 GMT -5
Shoot, totally forgetting that UTHR is premarket tomorrow. Wish I had sold those puts today. Yes (and hoping I don’t regret doing it). |
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Post by sr71 on Feb 21, 2023 18:22:19 GMT -5
ktim - Thanks for the excellent description and analysis of selling puts, while also identifying the pro's and con's. I agree that it is a reasonably safe way to seek very good returns.
OTOH, one year ago today MNKD shares closed at $3.76, so with today's close of $5.27 it represents an annual increase of $1.51/share, which is a 40% increase.
If MNKD stock were to gain from today 20.48% over the next 11 months (as in the example of the Jan24 5 Puts), the share price would be $6.35 in January 2024.
Personally, I believe that MNKD meets or exceeds $6.35 price in May about the time MNKD reports 1Q 2023 earnings, and may/should be significantly above that by January.
Finally, I prefer buy and hold the shares right now, especially since there is the added benefit of still holding current (appreciated) shares, completely tax-free (until sold someday of course).
But as always, this opinion could all change tomorrow! (:>
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Post by ktim on Feb 21, 2023 19:03:18 GMT -5
The actual shares I own of MNKD has gotten back to being my largest single stock holding with the past couple years' increase, so I have plenty of upside exposure. I've been using short puts and covered calls to trade around the edges as I thought we were reaching low and high trading bounds respectively. Even with the runup now I'm not wanting do covered calls because I do believe potential for positive upside on earnings this time is real. Though with the runup I'd be a little worried of a drop, exactly like happened today, so the short put trade would have, if I hadn't stupidly forgotten tomorrow morning is really the event, given me the protection to invest even with the recent runup. That's just my take on MNKD strategy for the times.
This past year I did a LOT of put selling on a lot of different companies and unlike the bulk of my money in index funds, that put selling was very lucrative TTM. I don't say that to claim any brilliance. It's more an issue of experience with options allowed me to be comfortable with that trading mechanism. Allowed me to jump into dips in shares where I might otherwise be hesitant. For instance it's a way when a trading pundit says "if XYZ drops another 8% back up the truck and buy"... often you can use this option trade to effectively buy the shares below that price even if the shares never actually cross that "all clear to buy" level.
And thank you for the thanks SR. Only reason I post this sort of stuff, which hopefully isn't found to be too tedious, is in my hopes that all of us early MNKD investors can get back to breakeven or better.
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Post by sr71 on Feb 21, 2023 19:31:57 GMT -5
The actual shares I own of MNKD has gotten back to being my largest single stock holding with the past couple years' increase, so I have plenty of upside exposure. I've been using short puts and covered calls to trade around the edges as I thought we were reaching low and high trading bounds respectively. Even with the runup now I'm not wanting do covered calls because I do believe potential for positive upside on earnings this time is real. Though with the runup I'd be a little worried of a drop, exactly like happened today, so the short put trade would have, if I hadn't stupidly forgotten tomorrow morning is really the event, given me the protection to invest even with the recent runup. That's just my take on MNKD strategy for the times. This past year I did a LOT of put selling on a lot of different companies and unlike the bulk of my money in index funds, that put selling was very lucrative TTM. I don't say that to claim any brilliance. It's more an issue of experience with options allowed me to be comfortable with that trading mechanism. Allowed me to jump into dips in shares where I might otherwise be hesitant. For instance it's a way when a trading pundit says "if XYZ drops another 8% back up the truck and buy"... often you can use this option trade to effectively buy the shares below that price even if the shares never actually cross that "all clear to buy" level. And thank you for the thanks SR. Only reason I post this sort of stuff, which hopefully isn't found to be too tedious, is in my hopes that all of us early MNKD investors can get back to breakeven or better. Yes, much better  MNKD Covered Calls at a decent price have been hard to come by lately. I had a few Feb 5.5 Calls assigned with the spike on Friday, but I got lucky to be able to buy those shares (and a few more) back much cheaper today with the proceeds. For the most part, I'm pretty well finished accumulating shares, so for me now it's just a waiting game for this tree to bear fruit.  |
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Post by cedafuntennis on Feb 21, 2023 19:37:21 GMT -5
What got me so upset was that I had entered a limit order of $0.10. A limit order means no less than, but it is not a Stop order and fill at 0.10. If the option intrinsic value was 0.5 (6 - 5.5), they should have never allowed a fill at 0.10 as that was clearly fraudulos quote. Two traders agreed with me on that assertion, but the trade resolution did not.
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Post by cretin11 on Feb 21, 2023 20:01:49 GMT -5
ceda thanks for posting that. I’m still confused about this: since these were $6 puts you were selling, and shares were around $5.50 at the time, why not set your limit at maybe $0.60 rather than $0.10? By putting it at the low end, $0.10, wouldn’t we expect it to immediately get snapped up at that price?
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Post by MnkdWASmyRtrmntPlan on Feb 21, 2023 20:13:42 GMT -5
Shoot, totally forgetting that UTHR is premarket tomorrow. Wish I had sold those puts today. I don't know much about puts & stuff like that (and I don't really care - just a long guy), but ktim, are you saying you are betting against MNKD (or, UTHR)? If so, why? |
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Post by ktim on Feb 21, 2023 21:01:25 GMT -5
Shoot, totally forgetting that UTHR is premarket tomorrow. Wish I had sold those puts today. I don't know much about puts & stuff like that (and I don't really care - just a long guy), but ktim, are you saying you are betting against MNKD (or, UTHR)? If so, why? No, the option trade I was suggesting would be considered a long position... selling short a put, two negatives make a positive. I've also explicitly stated I am expecting good news and share price increase this earnings. Past earnings I often expected runup and dip on earnings, which might still occur, but I'd put my money on setting new 52 week high this time. Very possibly tomorrow rather than waiting for MNKD to announce. Fingers crossed for good news when I wake up. |
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Post by cedafuntennis on Feb 21, 2023 22:52:14 GMT -5
ceda thanks for posting that. I’m still confused about this: since these were $6 puts you were selling, and shares were around $5.50 at the time, why not set your limit at maybe $0.60 rather than $0.10? By putting it at the low end, $0.10, wouldn’t we expect it to immediately get snapped up at that price? That is a great question. I was in a hurry and on my phone e entering that trade and instead of picking the 5.5 puts my finger moved to 6 put. That said, the trade should have never executed at 0.10 since the intrinsic value was 0.50. I'm honest with my share of the fault. |
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Post by BD on Feb 21, 2023 23:17:37 GMT -5
As someone who trades MNKD calls a lot, on TDA, I've become accustomed to battling their system when it comes to the pricing and the bid/ask volatility. No way in hell would I place an order that I would not be OK with having it execute. Not on purpose, in any case. The times I've gotten burned have usually been some sort of fat-finger situation.
Man, it has taken me a long time to figure out how to reign in the effect a few randomly-priced MNKD calls can sometimes have on my portfolio value. I trade two sets of calls, one for MNKD and one for TSLA. At least with the TSLA options there's enough volume to make them pretty liquid. In terms of liquidity, the MNKD options suck.
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Post by slapshot on Feb 21, 2023 23:19:35 GMT -5
thanks for all of the options discussions. i have been selling covered calls off and on for sometime but havent tried the puts...
i sold 10 contracts of the 1/19/24 $5.50 puts @ 1.10 earlier today. we shall see...
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Post by mytakeonit on Feb 22, 2023 1:48:44 GMT -5
Okay ... I went to the VA to do a check up and was talking to the male nurse while waiting for my test results and to talk to my doctor. I found out that he trades stocks ... AND, he is my newest recruit to buy MNKD shares !!! While I was talking to my doc in a closed room ... I could hear him telling the other nurses about buying MNKD stock !!!
When I left I told him that I could hear him in the closed room. Ha!
The other nurses looked very happy to see me. Interesting ...
But, that's mytakeonit
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Post by cretin11 on Feb 22, 2023 6:58:43 GMT -5
ceda thanks for posting that. I’m still confused about this: since these were $6 puts you were selling, and shares were around $5.50 at the time, why not set your limit at maybe $0.60 rather than $0.10? By putting it at the low end, $0.10, wouldn’t we expect it to immediately get snapped up at that price? That is a great question. I was in a hurry and on my phone e entering that trade and instead of picking the 5.5 puts my finger moved to 6 put. That said, the trade should have never executed at 0.10 since the intrinsic value was 0.50. I'm honest with my share of the fault. ceda now it makes sense. I was wondering why you chose $6 strike price with a $0.10 limit, but it was a mistake and you intended to choose $5.50. Which is a great lesson for any new options investors. Always use limit orders (as you did), never market, when trading such an illiquid listing like MNKD. For those $6 puts you got stuck with at $0.10, it makes sense it filled at exactly that price and not at $0.50 which was the more fair value at the time. It’s because there was so little action at that strike price (understandably, given how out of range it was with so little time to strike), the only buyer was at $0.10 and surely had no expectation of it happening. TDA has no obligation to pay more than what you were asking, because they had no realistic possibility of finding a buyer to take it off to their hands at that price, ergo they would’ve been stuck with shares when the day ended and that’s not their business model. Anyway, it sucks to hit the wrong number and mess up the trade, I suspect we’ve all been there. Which is the other cautionary advice to options traders: be extra careful you choose correctly between “call” and “put” and likewise between “sell” and “buy.” Seems obvious, but when new at these it’s easy to get those mixed up and end up on the opposite side of the trade you intended. |
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Post by BD on Feb 22, 2023 7:34:49 GMT -5
Another thing to watch out for is to make sure to get an accurate update of the current bid/ask, because many times I'll get a quote from one part of the UI and it'll be out-of-date without my realizing it, even though it had just displayed.
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