For one day, my calls are for 7/22.
$27.50 is ideal, all calls expire worthless. UPST closed afterhours session at $27.89. Thirty-nine cents down is not a lot to ask. In any case, I’ll set the alarm for 3 a.m. and decide whether to ride it out and either expire or call away, roll over to 7/29, or buy-to-close.
KC
I ended up buying to close for a few pennies per share so I could just go to bed and not get up at 3. Then I actually bought UPST and just about every other stock in the port. I will look to trade the UPST or sell calls against those new shares if there is a rally on Monday.
G’night
KC
good luck to you…maybe the BMR has more legs, but I have no idea.
My gut is that it is a BMR, and we will see it deflate.
Deflating today, but it is just 1 day, and will have to be a bad week next week to approach mid-June lows, so my best guess from a random guy on the internet is that maybe in August we retest lows?
I probably jump a bit harder on next retest of lows, if we get one, and try to recoup remaining losses.
This whole year feels like a wash.
Closest I can feel to this, as I was fairly uninvested in 2007-2009, is back in 2001/2002, when the BMRs kept giving way to new lows…grinding retail into dust.
I imagine 2008/2009 would have felt similar.
Could be an interested Q4. We have seen some bad Q4’s in 2018 and 2019. That is what I am waiting for. Just opportunistic trading until then, unless a really low price comes in earlier than expected on a stock I like long-term.
2023 could easily see more downside, but just feels like whatever you invest in by beginning of 2023 is probably higher by end of 2023. 2024 will probably be nutso election year, surpassing even 2020, so could lead to sentiment rallies/dips. I think “trading around a core” is the way to go, once we see either new lows or at least retest the lows.
Enjoy the weekend all,
Dreamer
good luck to you…maybe the BMR has more legs, but I have no idea.
I (obviously) have no idea either. But I am quite confident that volatility is here to stay for the next 6 months or so. That is a two-edged sword. High prices for puts and calls is good. Increased odds of having option exercised is not good. If we look at the UPST July 29 calls, the Friday close was $26.03
There are strike prices at $0.50 increments.
STRIKE PREMIUM
$26 $1.69
26.50 1.46
27 1.23
27.50 1.06
28 0.89
28.50 0.77
The 27.5 yields 4.1% of the closing price and requires a 5.6% share price increase to trigger the option. The 28 strike yields 3.4% but requires a 7.6% share price increase. The risks are share price changes greater than 5.6 or 7.6%. If one is committed to owning the shares, a price decrease of that size is not (?) an issue. A slight beat on the upside isn’t much of a problem either. It is the 10% or 15% increase that causes angst. Buy the shares back and risk a subsequent price drop? Or not buy back and watch the shares (maybe) run away (FOMO)? No free lunches.
We can add a layer of complexity by also selling the puts. With puts and calls with same expiration dates, only one would possibly be exercised. But of course it adds the risk of having to buy below the expiration date market price (but of course below Monday’s opening price). But it is a sort of forced sell high, buy low mechanism. What can we get for about $1 per share? $1.03 can be fetched for $24.50 strike price put. We could sell both the $27.50 call and the $24.50 put and pocket $2.09 for the $26.03 valued shares. For one week. 8%. (Not really 8% since in an IRA one needs $24.50 cash per share in the account… But if one wants to hold cash in these times, …).
So, 1,000 shares, $26,000 in UPST and $24,500 cash to cover the puts, gets you $2,090 for the week. Check the math and multiply by 52 and see if it covers your dining out expenses.
Also check out the New Paradigm Investing board: https://discussion.fool.com/retirementdough-june-portfolio-updat…. 100% invested in UPST. 19 post thread. KC was/is a piker.
What does the slang term Piker mean?
1 : one who gambles or speculates with small amounts of money. 2 : one who does things in a small way also : tightwad, cheapskate. In case that term has not been used in your neighborhood since 1950-ish.
KC, who has to go check the electrical project-of-the-day his This Old Houseand could use $2,000 a week…
BTW, there was/is a lot of discussion about selling covered calls–over at New Paradigm Investing. In that I am on record as saying there is inevitable loss because the potential loss in a declining market can greatly exceed the limited gains which are capped at premium plus the delta of strike price minus whatever base price you select.
I haven’t resolved this conflict.
KC