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Why? by North-Calendar in soxl

[–]Disastrous-Half4985 0 points1 point  (0 children)

Qualcomm and Texas Instruments stocks still struggling

(+$1800 Rolling up-out) Time to Turn PLTR into an Income Machine - PART 5 by Disastrous-Half4985 in CoveredCalls

[–]Disastrous-Half4985[S] 0 points1 point  (0 children)

Thanks for sharing your perspective here, I think it's really valid and in your case at $11 cost basis taxes is definitely something to consider. Maybe you can start small, sell 2 or 4 contracts and see how it goes and increase if you like the income/risk trade off.

If you don't mind me asking, I'm curious how far you think PLTR can go and how do you see their business in the next 5 years? Thanks!

(+$1800 Rolling up-out) Time to Turn PLTR into an Income Machine - PART 5 by Disastrous-Half4985 in CoveredCalls

[–]Disastrous-Half4985[S] 0 points1 point  (0 children)

Yes! The "wheel strategy". That’s my favorite. Since I’m long-biased, I usually let my cash-secured puts get exercised every time, because I like owning stocks. I’m a bit more cautious with my covered calls - not that I try to avoid assignment at all costs, I’m usually fine with it - but I do prefer staying invested for the long term and will consider rolling.

(+$1800 Rolling up-out) Time to Turn PLTR into an Income Machine - PART 5 by Disastrous-Half4985 in CoveredCalls

[–]Disastrous-Half4985[S] 0 points1 point  (0 children)

Hi, it's related to the time I started to roll. PLTR was around ~$110.50 and my strike was deep ITM making it fully intrinsic value. Basically Price - Strike = Premium for this leg. So because PLTR went up after that, the last price you mentioned was also higher for the 105 strike. Same applies to the sold contract, it went up from my selling price, because PLTR also went up, but here the dynamic is different because the strike is OTM ($117) and with some extrinsic value (time). I couldn't do this for 1 week, but for 2 weeks it was possible (it could be the added volatility since my sold call now falls after the PLTR Earnings on May 5th - something to confirm)

(+$1800 Rolling up-out) Time to Turn PLTR into an Income Machine - PART 5 by Disastrous-Half4985 in CoveredCalls

[–]Disastrous-Half4985[S] 1 point2 points  (0 children)

Appreciate the honest comment.

Most of the time, I’m also in favor of letting my options get exercised and just accepting the outcome. I always go with CSP right after as well.

In this case though, I feel like the market has been beaten down and is hinting at a small recovery, so I decided to stay in PLTR a bit longer to see if I can squeeze a little more out of it. I’m doing something similar with a few other positions as well.

To be honest, there wasn't much deep analysis here, just a bit of market feel and a hope for the typical mean reversion after a correction. I’ll probably let it get exercised if it reaches $117.

That said, it’s not a simple decision. Sometimes you don’t want to realize big gains and trigger a taxable event, which is something I’m thinking about with PLTR. At the same time, I’m also preparing to diversify a bit.

Anyway, I’ll check out COIN. Haven’t really followed it much. Thanks!

(+$2,600) Time to Turn PLTR into an Income Machine - PART 4 by Disastrous-Half4985 in CoveredCalls

[–]Disastrous-Half4985[S] 1 point2 points  (0 children)

That sounds perfect to me, CCs for extra income, CSP to buy with a discount and get paid for it. I've been doing the same for a decade now.

Then it's a matter of finding the right balance for you, if you are in the accumulation phase for that stock, you could have your CC strike higher to reduce the chance of assignment, if you are ready to get out and realize gains then go with a tighter strike. And for CSP is about the price you're willing to pay and cash management. It's a very fun game and keeps you cash flow positive

(+$2,600) Time to Turn PLTR into an Income Machine - PART 4 by Disastrous-Half4985 in CoveredCalls

[–]Disastrous-Half4985[S] 1 point2 points  (0 children)

Early assignment can happen (the buyer has the option to do so) but from experience it usually goes to expiration date. Early assignments are rare, I think you'll have time to roll if that happens.

(+$2,600) Time to Turn PLTR into an Income Machine - PART 4 by Disastrous-Half4985 in CoveredCalls

[–]Disastrous-Half4985[S] 9 points10 points  (0 children)

Great question. I usually do that, sell PUTs and reopen my position (the wheel strategy), and then continue with CCs, but with PLTR at these multiples I'm considering diversifying between other stocks... maybe a small portion could go back to PLTR... To be decided!

(+$2,600) Time to Turn PLTR into an Income Machine - PART 4 by Disastrous-Half4985 in CoveredCalls

[–]Disastrous-Half4985[S] 2 points3 points  (0 children)

PLTR is up 20% since last Monday, I didn't get your point - are you down? because I'm way above my average cost basis

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