What leaps are looking good at this point in time?
By - throwaway8619425
if you're looking at AAPL LEAPS consider snagging the June 22 instead of Jan. hold that baby for a year and a day before you roll/sell and that's some sweet sweet tax savings.
Yep I got NIO this morning and PLTR
What dates/strikes did you pick? PLTR is on my radar screen since ipo. Made some sweet trades on it. Seems to hold to ~25 like it's married to it.
I’m a noob, but got $17.5 for 1/22.. played it safe and so far been rewarded.. a bit on the pricey side but the lower risk play with PLTR fits my idea of things
I am looking at 6/22, over 1 year, to reduce capital gains. Just waiting for it to come back down under 25. At current IV, targeting to pay off call in 30-40 weeks. Active management of this trade will be required.
Honestly the Jan 23’ 950c is looking pretty great to me for GME
Bold strategy. At this rate GME will be the world's reserve currency by 2023.
might just be me, but i wouldn't buy any far ootm calls or leaps with elevated IV and a crazy high share price. It was sub $100 not too long ago. I'd try to sell a shit ton of CSPs and capitalize on IV drop after earnings, and if GME falls to a strike I like, I'm very okay with owning it.
Had 100 shares but took profits with now 50 shares at a baiss of $50. GME is definitely like crypto at this point, it pays to have at least 1-5% of a portfolio
Think this was sarcasm.
I bought a 1/20/23 90c on APPL yesterday for 3200. Its currently up to 3600. So my breakeven is 127 but will hopefully reduce this by selling covered calls on the position.
I bought 125 aapl 2023 last week and am down at 15-20% so definitely just a matter of timing the bottom
im long on $SQ and $PLTR, ARK also looks like a good pickup after the correction
I've had a PMCC on AAPL going for over a year. If you plan on running a PMCC buying a 100 DTE long has a little better return then buying leaps.
For LEAPS, I like:
* AMD is reasonably attractive if you don't mind going to 2023 for safety
KO, PEP, LMT and BMY are great CC writing opportunities right now, I don't like LEAPs on them due to dividend.
Just my two cents of some things I'm pretty bullish on at current prices. Yes, I'm not as aggressive as many of you.
I’ve been thinking about mining companies like VALE because of the commodities cycle. As EVs gain traction there will be huge demand for new supplies of lithium, nickel, and cobalt. VALE is the world’s largest nickel miner and production needs to expand to keep up with demand.
But I need to do more serious research before trying this. I played the run up to about $17 and made a little bit of money.
My June calls I got in Jan for $20 strike are hammered on them, down 50%+, but I saw someone in WSB post recently they were up on their new Vale calls so who knows
I did NIO, ROKU, PINS, ETSY, BNGO, RKT.
Buying or selling? I've bought some BB strike 10 calls for Jan 2023. I also sold some covered BB calls at strike 25 for Jan 2022 as well. I have some NOK strike 7 calls for Jan 2023 too.
Dumb question: I have 100 shares of BB at $18 cost and a 2023 long call at $7, if I write a covered call for say $10 and I get assigned will my broker take the call option at 7 or the 100 shares?
I dunno, but it would have to be 100 shares, but if you end up with 200 shares because you bought 100 since your call expired ITM, I have no idea which 100 they'll sell if you're covered call ends up ITM. In my experience, brokers use the first in first out model but who knows what your broker does.
debating between AAPL and ARKK, ARKK has higher IV so it's a little pricier for similar share prices. But I don't know if the greater premium outweigh the threat of wild swings.
I've been thinking about selling CSPs on ARKK for that sweet sweet premium. IV is too high to be buying LEAPs on it right now IMO and I'm fine taking the shares if it comes to that.
that makes more sense tbh, a few of my leaps are down from IV contracting alone. AAPL leaps seem like the better buy and you'll profit on just IV expansion
Bought some qqq leaps when it was around 305
I bought an AMD LEAPS this morning. They're up today but I still think they're a good option for a LEAPS contract.
Also considered Apple, Tiwan Semiconductors, and SPY.
Just grabbed some March 2023 MSFT calls. Will probably start selling shorter dated ones to cover here
I grabbed some PLTR $15 January 2023 contracts when they were trading at $12.50 last week - I feel like those contracts will be surefire winners by 2022 and given I'll sell calls against them to lower cost basis, should be looking at free contracts by early 2022.
Thanks for this. Quick one, what do you mean by free contracts?
When you buy a LEAP and sell calls against that LEAP you are lowering your cost basis. On a stock that has decent IV and premiums that reflect that, you are lowering a tangible amount of your cost basis on the original purchase each time you sell a call.
In a perfect scenario, let's say I sell a monthly call against the LEAP for an average credit of $0.75 per month - that would $9.00 worth of credit in a year. When compared against my original cost basis of $12.50, that means the original LEAP now has a cost basis of $3.50. So if you extrapolate those numbers out a bit further, you'd end up with a "free" LEAP.
The more aggressive delta you sell, obviously you can make that cost basis decrease faster. So just think of the $0.75 credit as a simple place holder.
Is this "cost basis reduction" an American tax thing? I keep reading about it in this sub but tax-wise and stock-pricing-wise you're not reducing anything.
You keep the premium on one end, and you may get a stock at price X on the other end. Those are different operations and will be taxed separately. Opening new contracts won't have any effect on your actual underlying, you're just earning from selling insurance over it, but is a different operation entirely.
Sure, you can look at it that way if you like. But you're holding the LEAP for the long-term anyway (long-term capital gains tax) and basically utilizing it as collateral to generate passive income while also betting on overall asset appreciation. Which as you noted, the short dated calls would indeed be short-term gains. But on the overall transaction, $X went in and over the life of the contract you were able to earn $X off of that specific contract. Considering you can calculate ROI on a myriad of factors, it's really just dealer's choice on how you'd like to look at it. Will they be taxed separately, yes - of course they will. But at the end of the day you're just using capital to generate other capital.
I've said it before and I'll say it again, it's not that I don't love AAPL, it's that I think the market is still giving it too much of a premium. My 2022 PT is $110. Best of luck though!
how did you come to that for 2022
Reverse DCF based on FCF at 10 year average growth rate. It's as generous as I can get a model to illustrate without stretching the confines of reality.
Provides a present day valuation of $107.38 in what I would describe as a "perfect bull case scenario".
As of today, I'd be happy to start building a position in the $90 range (I prefer to buy at a discount to fair value, not a premium). If that means I have to look elsewhere, so be it.
wouldn’t predicting FCF at 10 year avg be highly variable based on assumptions that can’t be known?
I’m pretty new to financial analysis, i’m just trying to learn
It will absolutely be highly variable, but we're trying to predict the future based on the past, all we can do is use the information we have available to us.
As I said, my valuation was quite generous, the flipside of that valuation is an EPS growth rate of 4.75% which is the analyst consensus estimate (33 analysts) and is a bit worse than the last 5 year average.
There are hundreds of ways to calculate a companies "fair value" but all of them will likely provide a different answer and all are subjective. We are predicting the future based on inherently incomplete information. All we can do (speaking as a former poker pro) is look at the information we have, figure out what model best provides the most favorable outcome for the strategy we are pursuing, and then execute based on the directions that model provides us.
In short, find a way to value a company that works for YOU, that YOU understand, that is grounded in reality, and then invest based on that and stay invested unless you determine the company is now "overvalued" and wish to trim your position.
Personally, I'm all about investing in anything that generates Free Cash Flow. I don't care where that money goes today. I want a company with insider ownership so management interest are aligned with shareholders. If it has enough insider ownership and generates increasing amounts of FCF and isn't "overvalued", I buy.
thanks for the info man