Side Hustle
#801
QDRO
Has anyone done a QDRO from their Delta retirement plan in the last couple years? I've heard it mentioned as an option for moving money out of a retirement account without the 10% penalty (income taxes still apply).
#802
Yes, then she spent it all. Oh well, best money I’ve ever spent to get rid of a bad Investment…
#803
Line Holder
Joined APC: Apr 2014
Posts: 30
-Real Estate is horrendous right now. Folks are desperate to find a home at these low rates and are willing to pay nosebleed prices. Investment property is in a similar boat. Have you looked into Self Storage? That seems to be doing decent.
-short term trading is not my style. Like you suggested, daily fixations on charts does not sound fun. Lately have been reading 10ks and investor presentations learning about different businesses in sectors/countries that seem to have value. Lots of great deals out there, especially internationally. My best idea is BABA Deep ITM LEAPS(equity substitution). Alibaba seems deeply under valued and I have high conviction it will go up substantially so I levered up with LEAPS.
-I might be alittle old skool but I don't think Margin and Stocks are a good combination. Maybe for small bets on options here and there but not for dividend stocks. Margin works much better in Real Estate.
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-short term trading is not my style. Like you suggested, daily fixations on charts does not sound fun. Lately have been reading 10ks and investor presentations learning about different businesses in sectors/countries that seem to have value. Lots of great deals out there, especially internationally. My best idea is BABA Deep ITM LEAPS(equity substitution). Alibaba seems deeply under valued and I have high conviction it will go up substantially so I levered up with LEAPS.
-I might be alittle old skool but I don't think Margin and Stocks are a good combination. Maybe for small bets on options here and there but not for dividend stocks. Margin works much better in Real Estate.
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#804
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#805
At least 20% lower than current price. https://www.creditdonkey.com/leaps-options.html
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#806
At least 20% lower than current price. https://www.creditdonkey.com/leaps-options.html
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Edit: If you look at the same CSX options except in November, the Calls will cost you just a little more... around $18 while the puts triple in value.
I'm not being argumentative or anything like that, I just don't get the whole buying puts/calls strategy. I find a price that I would be willing to own the stock at, and sell the puts. If it finishes OTM, then YAY. If not, and it's assigned then I start selling calls on the discounted stock. And.. I have money in my account I can put to use elsewhere. In an up market, it prints money. I got hammered a little this week as some options were put to me, but come Monday I will be selling calls.
Last edited by JamesBond; 06-19-2021 at 05:57 AM.
#807
Buying those is a bullish strategy. So you believe that the stock is going up, would you agree? Why do you prefer buying LEAPS rather than selling puts outright? If you look at Aug 20 CSX, ($95) the $80 calls will cost you ~$17. The $80 puts go for $.40. The stock can lose well over 15% before I have to 'worry' about going long, annnnnnd, even if I did I will be getting it at a 15% discount from present value whereas you will have $1700 tied up and the stock MUST go up for you to see the first penny of profit. If you are buying, what difference does it make how far below the current NAV you go. You are still depending on a stock move to the upside before you can make any profit. Why not go down to 50%? Lastly,, form your article, LEAPS is just a fancy marketing moniker. It says right there that they are little more than options with long term horizons.
Thru buying a deep ITM LEAPS, the stock does not have to advance far before you are ITM. Combine that with a stock that's is already deeply undervalued, the odds are now stongly in your favor for principle protection. It is a tenent of my investing style, when it comes to stock selection, that maximizing the upside means first and foremost, minimizing the downside. Why not go down to 50%? Because the stock should already be deeply undervalued providing downside protection. Furthermore, at least 20% ITM provides premium protection as the price of the stock is at or nearly at break even.
As you can tell, my best LEAPS idea is BABA. Currently trading at $212. After analyzing the company's fundamentals and cashflows my conservative valuation is $320. Using a LEAPS strategy, the JAN 20 23 $170 call will cost around $6100 per contract. Stock only needs to advance to $231 to breakeven. If the stock reaches my conservative fair value:
Per Contract-
Premium Cost: $6100
Equity Cost: $17,000 ($170x100)
Total Cost: $23,100
Equity Value: $32,000($320x100)
$32,000-$23,100= $8900 profit on $6100 investment for a 146% ROI vs 51% ROI from just purchasing the equity instead of LEAPS. Moreover in the case of BABA, $320 would such a conservative valuation that I would keep the stock and let it compound further making my total acquisition cost $231($23,100/100) a share.
LEAPS allow me to achieve large returns typically gained from Nano, Micro and Small Cap stocks with larger, established companies that are undervalued.
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#808
Gets Weekends Off
Joined APC: Apr 2018
Posts: 3,191
As you can tell, my best LEAPS idea is BABA. Currently trading at $212. After analyzing the company's fundamentals and cashflows my conservative valuation is $320. Using a LEAPS strategy, the JAN 20 23 $170 call will cost around $6100 per contract. Stock only needs to advance to $231 to breakeven.
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#809
Gets Weekends Off
Joined APC: Apr 2018
Posts: 3,191
Hopefully, it stays this way for the rich.....you know ....like airline pilots! Since I'll be retired I won't have to worry about it, but it is a concern for some....like my kids....or possibly you.!
#810
Gets Weekends Off
Joined APC: Aug 2014
Posts: 187
I'm a long term investor. With a Long Equity Anticipation Securities (LEAPS) strategy, I can take a stock that I have conviction is strongly undervalued ie BABA, and from the additional leverage receive greater gains. Moreover, with LEAPS generally being 12+ months expiration, it's tax efficient at 15% capital gains.
Thru buying a deep ITM LEAPS, the stock does not have to advance far before you are ITM. Combine that with a stock that's is already deeply undervalued, the odds are now stongly in your favor for principle protection. It is a tenent of my investing style, when it comes to stock selection, that maximizing the upside means first and foremost, minimizing the downside. Why not go down to 50%? Because the stock should already be deeply undervalued providing downside protection. Furthermore, at least 20% ITM provides premium protection as the price of the stock is at or nearly at break even.
As you can tell, my best LEAPS idea is BABA. Currently trading at $212. After analyzing the company's fundamentals and cashflows my conservative valuation is $320. Using a LEAPS strategy, the JAN 20 23 $170 call will cost around $6100 per contract. Stock only needs to advance to $231 to breakeven. If the stock reaches my conservative fair value:
Per Contract-
Premium Cost: $6100
Equity Cost: $17,000 ($170x100)
Total Cost: $23,100
Equity Value: $32,000($320x100)
$32,000-$23,100= $8900 profit on $6100 investment for a 146% ROI vs 51% ROI from just purchasing the equity instead of LEAPS. Moreover in the case of BABA, $320 would such a conservative valuation that I would keep the stock and let it compound further making my total acquisition cost $231($23,100/100) a share.
LEAPS allow me to achieve large returns typically gained from Nano, Micro and Small Cap stocks with larger, established companies that are undervalued.
Sent from my SM-N986U using Tapatalk
Thru buying a deep ITM LEAPS, the stock does not have to advance far before you are ITM. Combine that with a stock that's is already deeply undervalued, the odds are now stongly in your favor for principle protection. It is a tenent of my investing style, when it comes to stock selection, that maximizing the upside means first and foremost, minimizing the downside. Why not go down to 50%? Because the stock should already be deeply undervalued providing downside protection. Furthermore, at least 20% ITM provides premium protection as the price of the stock is at or nearly at break even.
As you can tell, my best LEAPS idea is BABA. Currently trading at $212. After analyzing the company's fundamentals and cashflows my conservative valuation is $320. Using a LEAPS strategy, the JAN 20 23 $170 call will cost around $6100 per contract. Stock only needs to advance to $231 to breakeven. If the stock reaches my conservative fair value:
Per Contract-
Premium Cost: $6100
Equity Cost: $17,000 ($170x100)
Total Cost: $23,100
Equity Value: $32,000($320x100)
$32,000-$23,100= $8900 profit on $6100 investment for a 146% ROI vs 51% ROI from just purchasing the equity instead of LEAPS. Moreover in the case of BABA, $320 would such a conservative valuation that I would keep the stock and let it compound further making my total acquisition cost $231($23,100/100) a share.
LEAPS allow me to achieve large returns typically gained from Nano, Micro and Small Cap stocks with larger, established companies that are undervalued.
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