Selling Options for passive income by Robert Kiyosaki

[ironchef]

Case in point, Walmart and baba yesterday, back to recent months low, good trades to buy calls or sell puts further down, depends on if you want to own it or not. I am comfortable buying atm calls on baba 6-12 months out.

I agree. On second thought, I won't do BABA.

Looks like you are a fellow speculator.

 

[mervyn]

I agree. On second thought, I won't do BABA.

Looks like you are a fellow speculator.

baba is an almost guaranteed money, hot money comes and goes with baba, and liquid, not a yolo trade, say 25 6 months and 25 12 months $65 calls are so easy to pick. you can sell 1 month $80 call to cap if you wants to cap risk lower.

Walmart on the other hand, vol is not enough to make big money.

 

[taowave]

Selling the 1 month 80 calls against the longer dated is an awful idea...You are a raging Bull and want to be in a 15 point diagonal for 15 + and get short if you are dead right??

baba is an almost guaranteed money, hot money comes and goes with baba, and liquid, not a yolo trade, say 25 6 months and 25 12 months $65 calls are so easy to pick. you can sell 1 month $80 call to cap if you wants to cap risk lower.

Walmart on the other hand, vol is not enough to make big money.

 

[ironchef]

baba is an almost guaranteed money, hot money comes and goes with baba, and liquid, not a yolo trade, say 25 6 months and 25 12 months $65 calls are so easy to pick. you can sell 1 month $80 call to cap if you wants to cap risk lower.

Walmart on the other hand, vol is not enough to make big money.

I don't trade BABA because I don't have a strong conviction. WMT, maybe. CRSP several months ago.

 

[mervyn]

Selling the 1 month 80 calls against the longer dated is an awful idea...You are a raging Bull and want to be in a 15 point diagonal for 15 + and get short if you are dead right??

Typical way to finance a long dated trade since you own it. 15 points is double digit return already.

 

[taowave]

What does "own it" mean
You own the Stock as well ??

That diagonal is not a great trade if you ae as bullish as you state,but what do I know

Typical way to finance a long dated trade since you own it. 15 points is double digit return already.

 

[mervyn]

What does "own it" mean
You own the Stock as well ??

That diagonal is not a great trade if you ae as bullish as you state,but what do I know

leap call positions allow you to excise any shares you can afford, bullish view yes, but up to a price range

 

[taowave]

Heres your "dilemna"..

You are wildly bullish on BABA,but if you are dead right and the stock rips and goes up 30 points in the next 30 days,how much will you make??

leap call positions allow you to excise any shares you can afford, bullish view yes, but up to a price range

 

[mervyn]

Heres your "dilemna"..

You are wildly bullish on BABA,but if you are dead right and the stock rips and goes up 30 points in the next 30 days,how much will you make??

Why would it be a dilemma? It is a good problem to have because you are not losing money. Once a year there are few falling good names that will bounce back after a quarter or two. NFLX and META if you catch them. AAPL back in 2019, TSLA this year, NVDA Q3 last year, countless opportunities.

I am now selling ARM $50 puts and TSLA $185 puts, only downside is running out of available money.

 

[Sergio123]

I don't think BABA can do much without an economic boom in China.
Chinese stocks have been the worst performer over the last 3 years. Worse than Japan, Brazil, and US small caps.
But over the past year, it's been great for this type of options strategy.