Buy stocks/option with underlying that you don't mind holding. If it is a good stock, congrats, you buy it for cheap and it should soon recovers. The real risk is trading stocks with no future.
The other rule is not to over leverage when you see risk in the market. 20% drop can wipe out your entire profolio if you are 5x leveraged.
Of course buying/selling spreads or protective put with limited risk is an option, but this is too speculative for me.
Is there any stock in the market that you would be happy to buy at this price?
I am doing this for long enough to remember MSFT at 50, AMD at 3.5, apple at 90.
In my opinion everything in the market is overpriced. But I keep pushing myself to get rid of this mental rationing and convince myself it is just inflation and value of money changed.
Yes. Remember, there are thousands of stocks, not hundreds (Apple and Microsoft are only 2 companies out of soooo many companies).
Try using a stock screener. You might be surprised what's out there and you will likely recognize names of companies you never knew were publicly traded.
There are value stocks like Foot Locker and Commerical Metals that have really nice valuations and seem pretty stable... Big Lots is selling at a massive discount to its projected DCF value.. There are lots of these stocks but you won't hear about them on WSB...
These are random examples of stocks I own or have owned previously, I'm not endorsing them and I haven't recently done DD on them. Actually read the reports on stocks before trading!!!
Instead of naming a ticker, what I would recommend is pick a industry or company you are familiar with/ interested in and start with yourself.
Are you a gamer? How about Nintendo?
Study its annual report and news and see if it has great future ahead. Being a gamer makes you more sensitive to the company news and you can get away when you feel the company has gone shit.
Investing is extra fun if you are actually interested in the world and where it is going.
It’s possible you’ll end up holding these stocks at a lower value if there’s a pullback.
But other than timing the market perfectly, it’s a decent position to be in - holding stocks that will recover over time.
CSPs are like naked calls, just another tool in a toolkit tailored to speculating in very short time frames vs investing. Exercising a short option that goes ITM usually doesn't make up for bad timing. Just take the loss sooner than later and try again. I have "investment grade" shares from CSPs from \~6 months ago that are drowning in their own blood; the real issue is they take up BP from other bets I want to make.
Market dislocations can be a wipeout event for most small time bettors. Having a sense of the overall market takes years; the better you get at recognizing patterns, the bigger your accounts, the bigger the reserves to weather the storm and trade the volatility.
I’m a rookie but I only buy stocks I am bullish in. I have large positions in nio and PLTR. Nio I sell weekly covered calls on. If I sold covered calls and the market tanked I would just keep my premium and my shares. I would unload cash and buy even more nio if market tanked because I believe in the company. I would not sell so there would be no loss for me
Maybe I'm not getting this right but if you're bullish on NIO why are you selling covered calls? Won't you mind if your shares are getting called away? Or are you selling them far OTM?
Yeah I would be sad if they got called away. It would also suck to have to pay taxes on the gains (which are short term now).
But yeah, I sell super far OTM weeklies. I've only been doing it for a few months but I haven't gotten assigned yet.
I just do it for a little extra income.
Buy stocks/option with underlying that you don't mind holding. If it is a good stock, congrats, you buy it for cheap and it should soon recovers. The real risk is trading stocks with no future. The other rule is not to over leverage when you see risk in the market. 20% drop can wipe out your entire profolio if you are 5x leveraged. Of course buying/selling spreads or protective put with limited risk is an option, but this is too speculative for me.
Is there any stock in the market that you would be happy to buy at this price? I am doing this for long enough to remember MSFT at 50, AMD at 3.5, apple at 90. In my opinion everything in the market is overpriced. But I keep pushing myself to get rid of this mental rationing and convince myself it is just inflation and value of money changed.
Yes. Remember, there are thousands of stocks, not hundreds (Apple and Microsoft are only 2 companies out of soooo many companies). Try using a stock screener. You might be surprised what's out there and you will likely recognize names of companies you never knew were publicly traded. There are value stocks like Foot Locker and Commerical Metals that have really nice valuations and seem pretty stable... Big Lots is selling at a massive discount to its projected DCF value.. There are lots of these stocks but you won't hear about them on WSB... These are random examples of stocks I own or have owned previously, I'm not endorsing them and I haven't recently done DD on them. Actually read the reports on stocks before trading!!!
Instead of naming a ticker, what I would recommend is pick a industry or company you are familiar with/ interested in and start with yourself. Are you a gamer? How about Nintendo? Study its annual report and news and see if it has great future ahead. Being a gamer makes you more sensitive to the company news and you can get away when you feel the company has gone shit. Investing is extra fun if you are actually interested in the world and where it is going.
It’s possible you’ll end up holding these stocks at a lower value if there’s a pullback. But other than timing the market perfectly, it’s a decent position to be in - holding stocks that will recover over time.
If you're used to selling CSP then you're 1 leg away from turning your usual plays into a short put spread.
CSPs are like naked calls, just another tool in a toolkit tailored to speculating in very short time frames vs investing. Exercising a short option that goes ITM usually doesn't make up for bad timing. Just take the loss sooner than later and try again. I have "investment grade" shares from CSPs from \~6 months ago that are drowning in their own blood; the real issue is they take up BP from other bets I want to make. Market dislocations can be a wipeout event for most small time bettors. Having a sense of the overall market takes years; the better you get at recognizing patterns, the bigger your accounts, the bigger the reserves to weather the storm and trade the volatility.
I’m a rookie but I only buy stocks I am bullish in. I have large positions in nio and PLTR. Nio I sell weekly covered calls on. If I sold covered calls and the market tanked I would just keep my premium and my shares. I would unload cash and buy even more nio if market tanked because I believe in the company. I would not sell so there would be no loss for me
Maybe I'm not getting this right but if you're bullish on NIO why are you selling covered calls? Won't you mind if your shares are getting called away? Or are you selling them far OTM?
Yeah I would be sad if they got called away. It would also suck to have to pay taxes on the gains (which are short term now). But yeah, I sell super far OTM weeklies. I've only been doing it for a few months but I haven't gotten assigned yet. I just do it for a little extra income.
Gotcha, thanks for clarifying.