I am pondering two investing alternatives as well as a no change option.
One is to shift to mostly SPG and OKE along with some other divi stocks. Settle for 6%. We are 20+ years into retirement and our IRA’s are still larger than most of that time. About the same as 2 years ago even after sizeable withdrawals. Rental properties have benefited from house price inflation. Not very exciting, but more relaxing.
Second possibility is quite opposite. UPST. Current price $35.14 The January 23 calls have significant premiums:
Strike Price % Premium Price gain if called Total if called
50 7.17 20.4 42% 78%
60 5.29 15.1 71% 101%
70 4.00 11.4 100% 125%
Check my math…
A week ago when UPST was $42 or so, the $80 or $85 strikes had similar premiums. But stuff happened. The problem (a problem) with covered calls is the opportunity cost/loss, but I would be quite happy with 40% to 100% gain in 6 to 7 months should UPST become a market darling again. Kind of hard to fathom someone buying with a break even of $74, but there it is.
25% cash. Average UPST price $42.18.
The downside to the covered calls: the January '23 calls, if the price goes up short term, can’t trade the underlying shares because the calls will go up a similar amount. The share price gain is offset by the loss to “buy to close” the calls. No free lunches. The premiums on the calls are good because of the price volatility, but you can’t trade the up volatility.
it is definitely an uncertain environment!
Can’t decide if this downside has longevity like 2000-2002 or 2008-2009 or if it is a quicker turnaround.
when I checked the option prices after the market opened Tuesday, the numbers were way different from what I posted. Nor could I find the price history that matched what I had. Current numbers were lower. I checked the January '24 numbers, but they were way higher.
So just saying, I have my notes crystal clear (for a change) and distinct memory of the recording, but the numbers look total BS. I am still thinking of writing covered calls on a portion of my UPST shares.
Pre-market indexes look to be giving back half of yesterday, so the bid price on calls won’t be good…
Tough to make a buck.
All my little positions rocked yesterday: Well, “yesterday is gone”, but take my word for it, 'twas a day to be fully invested in all the little gems promoted by Bert. Sigh. O.k., I got some and UPST was pretty decent itself.
KC, who shoulda’woulda’coulda’followed Dreamer and taken some profit this morning.
If I have difficulty in writing this it may be because I took both roads and I am now a paired particle. Or something.
Anyway, I added to SPG in DW’s IRA at $97.47 so that OKE and SPG are #1 and #2. Yield just over 7%.
Then, I sold some Jan 20 2022 UPST calls, strike price $80. Received $3.50 a share while UPST was trading around $38.50. For 7 months, 9.1%, 1.0125% per month. 16% per year for a “very low risk stock”, ha-ha-ha. Lucky me if the shares get called for a double. Sort of a trial.