Dusting off my LEAPs again...

[The_Krakenite]

Not a good day for me... tech stocks all ran up, MSTR even hit almost 20 points. Just about everything went up, except for Sonos, lol.

I may be lucky just to get 8K out of selling insurance on MSTR @ strike of 200. The more I try to wait for better fills, it feels the more tech runs away again.

 

[The_Krakenite]

Today was not fun again. During the day MicroStrategy shot up even higher. During my lunch-break at work I put in a limit order at a compromised price for the $200-Strike, not expecting to get filled. Then to my surprise I find out later MSTR dropped a tad from earlier and I got a fill. It wasn't what I was really hoping for, but I will take home 8.3K for now.

What is interesting here, is that the commissions seem to have been drastically cut from where they were the last time I was trading derivatives on IBKR. Now they're under a dollar per round-lot at stocks this size? I love this broker!

The next question, is what to do now with the cash. It's going to sit in my account earning interest while waiting to cover my scaling in of 600 shares of Sonos. A couple choices of how I plan to 'possibly' scale in using more PUTs:

Of course, the left looks cheaper, but then I risk NOT even getting any assignments while the fire-sale is on...

Decisions, decisions...

Starting tomorrow I may start to visit all the local stores in town selling the new Sonos equipment and see for myself some further details...

 

[The_Krakenite]

I decided today to go for the plan on the 'right'. After some further digging around last night, I thought it may be best to short PUTs ending before August, to avoid the next round of possible bad-earnings reports with Sonos.

Today at work, I set my planned strike at $15, for only two contracts. I also used the $12.5 strikes for the other four. I had to nudge the $12.5 strikes lower in cost to get a fill just before market close.

Interesting, looks like I actually got a 'credit' in commissions for the 15-strike trade. That's a first for me too, looks like I've been out of the saddle for too long (no options pun intended).

 

[The_Krakenite]

I decided to take a deeper look at IBKR's tracking of cost-basis, as I was not 100% confident from past statements when doing taxes.

From the current 400 shares I have already been holding of Sonos, the platform shows I'm just under $39 price-per-share for my average-price-per-share.

I went back and looked over the records on how the shares were assigned. Originally this occurred when four of my short puts got assigned at a strike of $30, with $408.00 in proceeds and $2.70 commission. That equals a basis of $405.30 for the premium (this value shows up correctly so far in the statements).

Now, according to the documentation, IBKR claims that it correctly takes the premium from assignments and bakes them into the basis for the shares of stock, so the taxman won't be upset when audit-time comes.

I did some manual calculations here, and sadly my value came well over $30 a share for average share price at first. Well, that was my silliness, as I was adding the original premium value to the basis of the stock, instead of subtracting it!

After adjusting things properly, my cost basis for stock was $28.98675

Now, this is very close, but not exact to IBKR's reported value of $28.9867388

Comparison:
28.98675
28.9867388

For a moment, I thought IBKR may not have been taking the small trading fee into factor here, but that turned out not to be the case after digging deeper.

Regardless, I am very happy with this, as I am not trading billions/trillions of dollars worth of stock so it's not going to make a penny difference with this minor rounding/truncation discrepancy.

My faith in the accounting (so far) is back to restored. Now, maybe later on sometime I will try to do a close analysis on how IBKR is really handling wash/superficial-loss trades.

 

[The_Krakenite]

Canadian markets are closed this Monday, while US markets open. So I get to sit home today and look at some of the new color schemes I enabled on IBKR.

First here is the new layout ordering for my Financial Instruments (actually, I see I already posted this layout in an earlier post). I will keep things set like this throughout the year. My options are grouped at the top of the portfolio in their own sub-category, with their own color coding depending if ITM or OTM.

At the time of this image-grab, Sono fell 3 pennies ITM for the 15-strikes. Which I would be perfectly happy with. Let's see what happens though by expiry.

And as for the below, I toggled on part of the old-school color coded numbers which I don't see much anymore these days. I'll spend some time with it to see how much I end up liking (or hating) it.

That's the LEAPs chain for COINbase. I've been spending all weekend going over the earnings calls, letters to shareholders, and financial statements. There is a lot of mixed goods, and bads naturally.

With that kind of premium, there is still some interesting risk/reward here, but the most damning thing against COIN right now is the Wells notice. This is going to cost them not just a possibly nasty court battle with the SEC, but they may STILL lose it in the end, and possibly a lot of their staking income, and many other fines, etc.

Tuff decision to make here. I may still wait this out a bit and see... or...

 

[The_Krakenite]

COIN was down a tad again today, so I slowly ticked across the spread before market close to get a fill.

In other plans, I am debating on taking a stronger look at Hut 8 later this weekend. As much as I hate miners, and I expected them to crash post-merge (exactly what happened)... there still may be some explosive growth around the next halving. I'll have to run some risk/reward numbers on it soon enough...

If there is a time to build some synthetic stock, that may be the right time...

 

[The_Krakenite]

Friday May 26th re-cap.

Not much craziness this week. My options position going into the close for the weekend:

Though, I am no longer ITM when looking at after-hours trading for Sono on those 15-strike PUTs. Here is the main reason I suspect for the jump in after-hours that just came out:

UPDATE 1-US jury says Google owes Sonos $32.5 million in smart-speaker patent case
https://ca.finance.yahoo.com/news/1-us-jury-says-google-215327253.html

May 26 (Reuters) - Alphabet Inc's Google must pay $32.5 million in damages for infringing one of smart-speaker maker Sonos Inc's patents in its wireless audio devices, a San Francisco federal jury decided on Friday.

...

The jury found Google infringed one of Sonos' two patents at issue in the trial. Sonos had previously asked the court for $90 million in damages, a request Google said in a court filing that Sonos had reduced from $3 billion after U.S. District Judge William Alsup narrowed the case.

Typical Google/Amazon. Always trying to steal everyone else's shit...

 

[The_Krakenite]

Log: May 29

US Markets were closed, but Canadian open. I decided to purchase a bunch of shares of Ether Capital ETF (NEO: ETHC). I will TRY to halt from purchasing any more ETH related products. I keep telling myself I need to stop doing this, I am already over-weighted in both crypto & bank securities. However, this ETF is different as returns from staked Ethereum are added into the ETF, and I can't easily find more like this (yet).

I plan to hold this one for the long term...

 

[The_Krakenite]

Tuesday, May 30:

I carried out some more LEAP trades on my lunch-break.

1. Shorted a couple PUTs on RIOT.
2. Used most the cash to go long on 20 CALLs for HIVE.

Both options have a DTE of 600 days.

Special Notes:
This is the first time I am involved in trading derivatives with crypto-miners as the underly. It's not something I am really too crazy about, but the premiums are in excess of 100% which gets a lot more vol than Bitcoin itself.

I am very bullish on the Bitcoin halving. I'm not too crazy here on betting the house, as I was initially correct on the Ethereum Merge event, my catalyst pulled through, the event was a success, everything went well... and somehow... everyone who bet bullish on that got the price wrong and lost money. As long as the FED is involved in anything, you can be correct on all your assumptions and STILL lose the trade.

Tomorrow, I will pick up a book from the local library regarding the bitcoin mining industry. Part of my upcoming due diligence before I do anything else in this sector with more trades.

 

[The_Krakenite]

Wed: May 31

The book is interesting so far, I'm glad I picked it up after work today instead of leaving it for later this week.

While I (technically) did no trades today, I did get notice at work that one of my brokers enabled support for Cardano staking today. Looks like my small purchase of ADA a few days ago can get to work making a few dividends for me now.