HOW TO MAKE MONEY SELLING PUTS

The low-risk method for turning limit orders into cash.

It doesn't take a genius to know that the stock market is overvalued.

Airbnb shares hit the market today and doubled right away. This in a time when half the planet is shut down and many people are scared to travel.

Of course, that's just one example. There are plenty more companies with impaired fundamentals now trading at or near al-time highs.

It is very hard to find a bargain anywhere, similar to June / July where everything popped, only to tank in value by September.

This means you have three options:

1) Sit in cash.

2) Buy now, expecting both a future drop and recovery.

3) Sell puts , treating them like limit orders and collecting cash while you wait for share prices to fall.

We'll focus on number three.

Also, quick disclaimer: I'm obviously no financial expert and this thread is purely for entertainment purposes only.

Anyway, back to the main content.

THREAD: A lot of my students have been asking me about the current events involving GameStop, Bitcoin/Dogecoin, minimum wage, stimulus checks, so I thought I'd make a thread that carefully explains this stuff for people who feel out of the loop: (1/97)

On May 28, 2016, a three-year-old boy climbed into a gorilla enclosure at the Cincinnati Zoo and Botanical Garden and was grabbed and dragged by Harambe, a 17-year-old western lowland gorilla. Fearing for the boy's life, a zoo worker shot and killed Harambe.

The incident was recorded on video and received broad international coverage and commentary, including controversy over the choice to use lethal force. A number of primatologists and conservationists wrote later that the zoo had no other choice under the circumstances, and that

it highlighted the danger of zoo animals near humans and the need for better standards of care.

Harambe (/həˈrɑːmbeɪ/ hə-RAHM-bay) was born at the Gladys Porter Zoo in Brownsville, Texas, on May 27, 1999. He was named by Dan Van Coppenolle, a local area counselor who won a naming contest sponsored by the zoo.[1] He came up with the name after listening to the song "Harambe

THREAD: STOP UNDERVALUE THE PRIVATE INVESTORS

The misunderstanding of private investors - primarily known as amateur investors when talked about - done by media and professionals is too much.

Are you ready? Hope you will enjoy this one and bring your voice into the debate👇👇

1/x

Are private investors just a bunch of happy gamblers who should let the “real deal” aka professionals invest for them instead? Idk, maybe, maybe not. Peoples own choice, right? But I have an opinion about how media undervalue private investors.

2/

There are many smart persons out there, which have a great skill to hold the same (or more ) knowledge and understanding than professionals.

Why? Because the world has developed so much and the information-level have changed💨

3/

Earlier on you would not get access to accounting; it could be sent by Bloomberg terminal, send by post and even cost money. Now every accounting for every public company is available for free right after disclosure.

4/

Professionals had exclusive access to the board, and even the founders, the professionals had access to industry experts and could connect the dots faster.

Now every interview with the company, blog post by an industry leader or a Q&A with founders is available realtime.

As 2020 draws to a close, here's a few posts for my 2020 annual review! 👇

Focus is on the types of trade I made, the underlyings traded, & strategy outcomes, rather than just showing the overall % return

To kick it off, below is the 2020 equity curve of my main account 💰

So what did I trade? As you can see, Options have significantly contributed to 2020 Realized & Unrealized profits, with almost two thirds of gains coming from this asset class. Otherwise I have some net gains on short & longer term Stocks, and a loss in Futures 😊

I traded around 70 underlyings in 2020; here they are, ordered by % contribution to my annual Realized & Unrealized gains

$CRWD, $NET, $WYNN & $FSLY are my top winners! 🚀

I made a bit more than 200 opening trades in 2020. By far the most common are Long Stock and Short Put trades

Best performer = Short Puts, with an 84% win rate! Another 7% were rolled into new strikes, and only 1.43% were a loss 😮

Win rate on long stock is lowest. This is skewed as I’m only using Realized gains, and most of my profitable stock positions are still open

A coda to my tweets this week on #uranium contracting and the carry trade:

We care about how uranium has been bought and sold over the last decade - not just the sale price - because it informs us as to how a period of rapid price increase could develop over the next few years.

Reminder: the carry trade provides three main services.

1. Time shifting - matches supply today w/ demand tomorrow
2. Price formation - provides fixed forward prices in a market not always willing to provide them
3. Risk mitigation - decouples forward supply from mine operations

At some point in the forward price curve, newly mined supply (tied to inflation) is less expensive than financed spot supply (tied to spot price + interest).

At a constant financing rate, a spot price increase brings forward the time at which these two price curves intersect.

This is not controversial - at the locus of increased utility purchasing and decreased supply availability, uranium price goes up and the carry trade becomes less attractive. For lack of a better term, let’s call this a transition from a carry-driven to production-driven market.

A production-driven market might be:

...in contango, with a forward curve driven by mining cost inflation (input costs, depletion).

...in backwardation, with a supply squeeze in the short term but competitive sellers offering cheaper prices in the forward market.

Most of the successful traders here are option sellers.

Ever wondered why?

Why we have chosen option selling?

Find our below

1: Being wrong and still making money.

We as option sellers can be wrong with our market view and still end up making money because of the power of theta decay and adjustments to some extent.

Adjustments work better as get closer to expiry since decay is the highest.

2: Theta decay

The biggest reason and one of the prime reasons is the theta decay.

Option sellers always have an advantage because the as time passes, the option premium falls even if the underlying instrument doesn't move.

3:Playing directional view

Option selling also enables us to take a directional view. In fact, directional view along with theta decay makes it a solid combination.

Debit spreads and credit spreads works great for a directional view.

4: Playing Neutral view

We can make money in option selling even if the market doesn't move as the otm options will go to 0 with the help of theta decay. It's the most fascinating thing.

This is what attracted many into option selling.

As I completed 23 years on this lively planet and 5 years in this stock market, I want to share my 23 mistakes of my Investing journey.

A thread🧵

1. Quick Money
I begin with the stock market in a thought that it is an easy and fastest way to make money. Initially, I begin with buy and hold strategy but I felt, that is not what I came for and so I initiated with trading and in few months, (1/n)

I made some good returns, in the next succeeding month I lost my profit and my initial capital. (due to demonetization).

One quote revamp my mind “Rome was not built in a day and Hiroshima and Nagasaki were destroyed in a day” (2/n)

2. Taking tips from News Channels
I lost my faith in 2016 due to such a heavy loss and embark to take tips from TV channels and follow them on daily basis. I don’t know about others but this step failed me miserably. (3/n)

TV channels are just for TRPs, if they don’t provide tips, viewers shift to another channel, while you know the rest.(4/n)

A quick switch to a new currency would create a risk of capital flight with people, businesses and investors moving money, jobs and investment out Scotland.

Even proposing it during a campaign would mean people move money, jobs and investment in case there was a devaluation. Just imagine the political and economic cost that would be paid.

Furthermore uncertainty for people over what would happen to their income, pension, mortgage and savings if held cross border.

Quebec suffered this in a major way in its referendum (with a quick change currency proposal) and the jobs and investment have not fully returned.

A further issue is the cost of borrowing for public services investment. If you ask the world’s savers to fund your public borrowing at a time when you are yet to get it on a sustainable footing and then add the risk of currency changes it will be very expensive.

Mistakes i made when i was new to trading..

A thread :

Watched news for tips ( it's ok to see interviews and all, but avoid watching it for tips )

Wanted everyone's view for my trades ( the more views you get, the more confused you will eventually be, focus on your own study )

Over traded ( more number of trades doesn't means over trading... Trading without plan is over trading )

Leverage trading ( it's ok to do it, but should be avoided in first year of trading or atleast till you have proper knowledge of the risk involved )

@ttmygh @htsfhickey @fleckcap What a great podcast!

Summary of stocks mentioned follows...

THREAD.

@tttmygh @htsfhickey @fleckcap

@htsfhickey @fleckcap $AEM is considered the premier miner cuz location of mines, only in North America and 1 in Finland. Also great acquisitions at the bottom. Earned $.80 in the Q, up 122% YoY, hiked div 75%, near record production, in spite of some planned shutdowns.

@htsfhickey @ttmygh @fleckcap

@htsfhickey @fleckcap $AEM Analysts estimate $4.07 conservatively this year, PE 15. And that for the premier gold stock with the best locations and the best management. And that's the highest PE.

@htsfhickey @ttmygh @fleckcap

@htsfhickey @fleckcap $AEM in growth phase, 20% over the next couple of years, they've spent all the capital. Expect their cost to come down as the production goes up.

@htsfhickey @ttmygh @fleckcap

@htsfhickey @fleckcap $NEM PE 12, just had the best Q in history, div policy based on cash flow (was enormous), increased divs 2x, possibly another 50% increase coming. Won't grow production but will grow cash flow & earnings.

@htsfhickey @ttmygh @fleckcap

With $GME hitting all time highs, making people millions & some even billions, let's take a look at one of the gaming companies set to IPO soon.

Time for a thread 👇 👇👇

1/ Roblox is like the world’s largest:

🏨 HOTEL COMPANY #AirBnB 👉 doesn’t own real estate
🚕 TAXI COMPANY #Uber 👉 doesn’t own any cars

AND

🎮 DIGITAL PLAYGROUND COMPANY #Roblox 👉 doesn’t create any games

2/ Digital Disney World.

Remember building imaginary forts with your friends in your backyard?

It's like that except digital, pros are building the structures and your parents are spending a lot of $$$ buying gear, digital pets and accessories.

Making $RBLX very rich!

3/ Business Model.

Online gaming platform where millions of kids (and some adults) come to play, learn, communicate, explore, and expand their friendships.

All in 3D digital worlds that are entirely user-built.

4/ Highlights.

- Founded in 2004
- $589MM revenue
- +170MM monthly active users (Oct 2020)
- Freemium, monthly subscription & one-time payments
- US$29.5B Valuation

Listening to grumpy MPs in the Commons today, you might incorrectly think the UK-EU agreement didn’t cover much.

Find the agreements here:

https://t.co/RIg0yhl9ee

The contents follow below to illustrate scope.

PART ONE: COMMON AND INSTITUTIONAL PROVISIONS
Title I: General provisions
Title II: Principles of interpretation and definitions
Title III: Institutional framework

PART TWO: TRADE, TRANSPORT, FISHERIES AND OTHER ARRANGEMENTS
HEADING ONE: TRADE
Title I: Trade in goods
Title II: Services and investment
Title III: Digital trade
Title IV: Capital movements, payments, transfers and temporary safeguard measures
Title V: Intellectual property

Title VI: Public procurement
Title VII: Small and medium-sized enterprises
Title VIII: Energy
Title VI: Public procurement
Title VII: Small and medium-sized enterprises
Title VIII: Energy

Title IX: Transparency
Title X: Good regulatory practices and regulatory cooperation
Title XI: Level playing field for open and fair competition and sustainable development
Title XII: Exceptions

Ok, here's the $CRESY thread (also posted to https://t.co/fxuIdqDOtQ, where the format may be a bit easier to read).

I haven't been this excited about a position in a long time. I think $CRESY is worth far more than its $6 trading price today. Here's why...

Here's what we have...

More than 1.3M acres of wholly owned SA farmland (beef, corn, soy, sugarcane

62.4% stake in a truly impressive real estate portfolio - 15 malls, 4 skyscrapers, 3 luxury hotels, nearly 1000 acres of land in Buenos Aires and Montevideo, the Buenos Aires fairground, 2 convention centers, a consumer bank, a commercial bank, and an arena, and a US REIT.

A 50% stake in Argentina's biggest ag exchange, and a 22.5% stake in an Ag fintech platform that just raised more money than any Latin American agtech startup in history from Bay Area VCs.

The farming segment itself is profitable, and with the prices of all the commodities they produce skyrocketing, despite more than doubling since the March lows, CRESY is still trading lower YoY and seriously lagging its fundamentals.

Earnings are set to explode.

Solid session on 🇮🇳 by @balajis and @naval via @joinClubhouse

Key takeaways... 👇

1/ India will be the biggest beneficiary of the move to #remotework. Three factors driving this: the English-savvy population, willingness for companies out West to hire from a global talent pool, and the large STEM-educated workforce.

2/ India has the potential to become a media superpower. We have Bollywood, the massive audience, the content creators. They foresee India churning out media that isn't uniquely Indian, but one that resonates with global audiences.

3/ The government isn't doing foreign investors any favors with the stringent capital controls they've put in place. Additional capital gain taxes, overbearing KYC controls, and cumbersome paperwork are a few factors dissuading foreign capital from entering Indian markets.

4/ Where you choose to live, incorporate your company, and target your audience could be thought out and optimized for. They don't need to all be in the same region anymore. The world is flatter than ever before.

A thread about my thoughts on the market:

$SPX has a rising wedge, looks really weak.

$DXY is bottoming with the short interesting going higher and higher.

$UVXY building a big base. Last time we saw this was in February.

$RUT has hit respected trendline from 1998.

$DJI about to hit the respect trendline from 1929 and 2000. These were two secular bull markets that ended.

Big tech looking really weak.

$NVDA about to break down.

$MSFT had a breakout failure, which is usually very bearish.

$FB has already broken down.

$APPL looks to have a double top. Also went outside of bull channel.

Back in 2000, there was a late rotation into $RUT and it broke out of a base and this spelled the top for the $NDX.
We are seeing the similar pattern here in 2021.

Short interest for $DXY is sky-rocketing. Such an extreme positioning has led to a rally in the past. A $DXY rally is a big threat to equities and precious metals.

R/T
@MacroCharts