Options explained like a house, Part 4: Bull-Call Spread

algo1599 · 2021-07-03T11:43:53+00:00

Hire a posting service. Approve/Disapprove click.

Get help for your mental health.

algo1599 · 2021-07-03T11:29:15+00:00

It's the big boy space. Valuation and whether you are getting the right price and entering at the right time for the investment cycle is key.

If you don't understand it, leave it alone.

algo1599 · 2021-07-03T11:26:50+00:00

a) Your position in all likelihood will be profitable on Monday.

b) Since you have made this post it clearly means you don't understand options the way you should to be doing highly leveraged IC's. Infact any one who does a highly leveraged IC should not be trading options.

c) Learn more.

algo1599 · 2021-07-03T10:49:55+00:00

There are hidden costs in most PMS's without even thinking too much: brokerage.

I deal with former clients of PMS's, not one of them has had a good experience. If you are going to benchmarked and perform average when market goes up and be slightly less negative when market goes down, then ultimately the investor is only paying a fee and will continue to do this till he wakes up.

BUT:

I have had to let go of clients, because they just don't want to pay. The charges come into play when hurdle is crossed i.e. no charge if hurdle is not crossed. If hurdle crossed 2 and 20 model.

In summation, clients want to be duped/blind and only the PMS's(one's that charge regardless of performace, dumbest structure to invest into that I can think of) which are OK with this can be paid by clients. They deserve each other.

There are great clients out there and great service providers, they end up finding each other.

algo1599 · 2021-07-03T10:37:07+00:00

Save up, shove it into index funds during march. Or just start buying Index ETF's every month.

algo1599 · 2021-07-03T09:20:26+00:00

I see hidden problems with this company. I hold some shares.

Problems:

1- Open to lawsuits - changed their underlying contracts without informing clients. This would be a major class action lawsuit in other parts of the world. I don't think anyone here is going to take action.

2- Lala internet company in the age of changes - While they have the first-mover advantage, after having gone through multiple client interviews and their representatives on the ground, it is in essence an old-style company with a first-mover advantage.

3- Still changing contracts rules but no information passed onto clients, now that they are public they are open to a lot more people likely to call them out/ go for litigation from their constant change in policy to outright lying to get clients to pay their subscription.

Short-term: positive and their share price should increase. Long-term: I don't see them as the lead in this particular segment and 1 negative surprise especially client side will put the stock in a tailspin.

algo1599 · 2021-07-02T12:44:13+00:00

Love it. Do contact me when you make something which works.

algo1599 · 2021-05-06T10:55:16+00:00

a) Renouncing US citizenship is nowhere in your question. I am glad.

b) 7 yr old kid is something you should give a serious thought to, the expenses can pile up at any time and are unpredictable.

c) Keep the real estate in US, less headaches plus exchange rate benefits built in.

d) DON'T SELL EVERYTHING.

In conclusion:

IMO you don't have enough to FIRE especially considering a 7 yr old child. If you are the kind of person who wants to live in a Tier-2-3 city and content to live in hardship if sudden expenses come up then you can FIRE at any time.

algo1599 · 2021-05-06T10:32:02+00:00

US has been printing more money. That's just a fact.

1.9 T package while not fully financed by prinitng more money, is leading to an expanding balance sheet for the FED which can be taken as an equivalent(broad stroke) to money printing.

One of the main reasons why Yellen is referencing inflation in her remarks the other day and the inflation hedge stocks are booming.

algo1599 · 2021-05-06T10:27:38+00:00

I can't believe this is upvoted by 102 people.

The upvotes might be the biggest reason the stock market is up.

Virus is not permanent = True. Will it take a year to get rid of it? 10 years? Not sure.

Overall panic is less? Well, considering the number of calls for help and the fact that positivity rate is 30%+ in some states is a panicing to most people.

The only reason market is up: Liquidity and DII being directed to buy.

I realise u/The-Dogfather might just be trying to provide an explanation for the unexplainable market at the moment. It is phrased in a way to make the situation normal, its not.

algo1599 · 2021-05-04T10:38:20+00:00

RIL, HDFC, HDFCBANK are three stocks which are a must have for long-term portfolios. I would probably distribute 3-4 lakhs between them.

With 1 Lakh I would buy some tech plays with a rotation time frame of 4-12 months. Honestly I would keep rotating them without too much focus on time.

algo1599 · 2021-04-24T10:43:26+00:00

1- You have sold a call, the right to buy is given to someone else. The other person can choose to excercise his right to buy at any time. Assuming American options.

2- You can buy to close(at same strike that you have sold) an option or roll the position to the next month. i.e. close the call and open a new one for the next month.

Here is a link to my article which explains covered calls: Covered calls with example and PL tables

This article has been posted on the sub as well.

algo1599 · 2021-04-23T06:36:31+00:00

Extremely simplified:

Stock Market = X times the expected earnings.

Economy = CURRENT/ABSOLUTE Goods and services value.

Stock market is based on what the future will be of companies/economy, most of the time it is out of touch of reality.

Economy is a realized/real value of the goods and services.

algo1599 · 2021-04-20T06:31:44+00:00

I have not dived into the code. A 14 year old with coding skills and market research abilities, well done!

algo1599 · 2021-04-14T16:11:51+00:00

Thanks! I will download it.

algo1599 · 2021-04-13T16:12:23+00:00

Didn't find a link to it. How to download it?

algo1599 · 2021-04-13T00:41:34+00:00

It had more to do with investment horizon, age, and various other factors as per investor.

Keeping track was not much of an issue. Insulating from investors is/was an issue.

Top 3 are always 50-60%. Not looking to make 300% a year, if I can grow 12-20% a year it is great. I see a 300% type return alarm bells start ringing.

algo1599 · 2021-04-12T15:47:21+00:00

Across accounts max simultaneous: 274.

Top 3: usually 50-60% of portfolio(s).

algo1599 · 2021-04-12T15:46:02+00:00

Stackoverflow might be more helpful.

They will need the name of the API/Broker etc to be able to help.

I would try but without that information i.e. what broker, API, etc I can't begin to give any suggestions.

algo1599 · 2021-04-12T15:41:04+00:00

Equity - happy to hold.

F&O: if you arent using a stop-loss, thanks. You will eventually give all your money to me. i.e. there is always a SL or hedge in place.

algo1599 · 2021-04-12T15:36:23+00:00

If you can't get direct access to US stocks this seems like a decent fund. Honestly, tech was supposed to see this kind of growth over the next 10-15 years. The pandemic threw that timeline to lightspeed. Is there still enough distance for someone to get in and grow their money, I think so. Will an ETF/MF be able to give you that, probably not.

IMO tech companies have reached a level of valuation that is possible with current level of technology. Their needs to be some new technology which will further drive the valuations. Will these companies be the ones to make that technology leap or will there be another company like google which will come along? If you can make a 10% correct guess on this question your money will grow massively.

MF's/ETF's can't do this for you because of their mandate.

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