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Started By
Message
re: Visa getting roughed up today?
Posted on 8/10/13 at 9:24 am to Ace Midnight
Posted on 8/10/13 at 9:24 am to Ace Midnight
I do it by the week, I mean I have alot sitting on the sidelines bc I've had a great year at work and all the stocks I wanna buy are higher than Id like to pay, well except for PM but I already have way way too much. I literally sell the puts on down days or friday(bc i get 2 free weekend days of time decay) and hope for an expiration. If you sold $175 for next friday it was $1.10 yesterday, nice profit. I have to be a little cautious this week bc I have a few contracts at $185 put I sold a month ago for $3.42 when it was $190 and then when the price fell apart I've been stuck with it for a month and it looks like I may take delivery next saturday which I don't mind bc $181.58 is a great price I believe.
Read this link from Visa and have confidence in the future
a.2 Billion cards in circulation
b.6.7 Trillion a year in transactions
c.150 million transactions a day!!!
d.growth every year since ipo
LINK
you own a piece of all that!!! With a company that has 0 debt,an industry with only 20% world penetration, a massively growing percentage wise dividend and 47.24% net profit margins! I honestly in my heart believe that over a 30-40 year time frame this stock with no debt combined with share buybacks will be the stock people mention like I had 5 shares of coke in 1959 and Im worth $5M today. With that balance sheet they are going to eliminate so many shares and raise the dividend very very quickly as time moves on. Just think of all the things like Amazon,Ebay,Itunes store, and more all those are paid for via credit card only. Cash is dead, I literally have 10-15%/day of sales in cash at work and that's bc you have to pay for lottery in cash. I wish it fit into my retirement plans within the next decade, I own some for the future generations I'll leave when Im gone but the dividend just isn't enough for me to retire on!
and Ace....a 1-2% profit on a put is terrible, think about it, if you sell $180 put for next friday at $2.69, your profit is $269, 2% of that is $5 lol. On the other hand if it expires you profit $269 on an $18,000 investment in 7 days which is 1.49%/week....now do that for 52 weeks in a row and you'll be a rich rich man haha seriously $18,000 compounded at 1.49% a week in 5 years is almost $850K just did the math....of course if I could return 1.49%/week I wouldn't be working haha, but I've only been doing this for maybe 2 months, and its doable but you're gonna need a helluva hot streak, but there are weeks youre going to get put the shares but youre still gonna profit, it may hinder your ability to sell a put for the following week though. You could be a little more conservative and sell the $175 put for $1.10 and make 60% less, but still .5%/week
Read this link from Visa and have confidence in the future
a.2 Billion cards in circulation
b.6.7 Trillion a year in transactions
c.150 million transactions a day!!!
d.growth every year since ipo
LINK
you own a piece of all that!!! With a company that has 0 debt,an industry with only 20% world penetration, a massively growing percentage wise dividend and 47.24% net profit margins! I honestly in my heart believe that over a 30-40 year time frame this stock with no debt combined with share buybacks will be the stock people mention like I had 5 shares of coke in 1959 and Im worth $5M today. With that balance sheet they are going to eliminate so many shares and raise the dividend very very quickly as time moves on. Just think of all the things like Amazon,Ebay,Itunes store, and more all those are paid for via credit card only. Cash is dead, I literally have 10-15%/day of sales in cash at work and that's bc you have to pay for lottery in cash. I wish it fit into my retirement plans within the next decade, I own some for the future generations I'll leave when Im gone but the dividend just isn't enough for me to retire on!
and Ace....a 1-2% profit on a put is terrible, think about it, if you sell $180 put for next friday at $2.69, your profit is $269, 2% of that is $5 lol. On the other hand if it expires you profit $269 on an $18,000 investment in 7 days which is 1.49%/week....now do that for 52 weeks in a row and you'll be a rich rich man haha seriously $18,000 compounded at 1.49% a week in 5 years is almost $850K just did the math....of course if I could return 1.49%/week I wouldn't be working haha, but I've only been doing this for maybe 2 months, and its doable but you're gonna need a helluva hot streak, but there are weeks youre going to get put the shares but youre still gonna profit, it may hinder your ability to sell a put for the following week though. You could be a little more conservative and sell the $175 put for $1.10 and make 60% less, but still .5%/week
This post was edited on 8/10/13 at 10:07 am
1
Posted on 8/10/13 at 10:27 am to ThaBigFella
quote:
On the other hand if it expires you profit $269 on an $18,000 investment in 7 days which is 1.49%/week....now do that for 52 weeks in a row and you'll be a rich rich man haha
That's the real trick, though, isn't it. I see the value in it - I'm just trying to cram risk into a manageable box.
quote:
I do it by the week
Alright - I get that. You pocket the cash sale on the put. I got that. My brokerage says 100% cash secured put. I got that. So, I wait for a down day and sell a put I'm comfortable at long (in this case, $190). I got that.
Okay, so how do I get out, short of actually waiting for the expiration or put? Or is that the actual plan - just churn the stock over, assuming you're up the target 0.5 to 1.5% (or better)?
I'm getting there on the mechanics of options - now I'm trying to see how you actually do it. I get that you like the weekly plays, and occasionally you have to eat a put for while until you go green. But what is the routine play?
(Sorry for picking your brain, but you seem to have the hang for parts of this I really didn't understand - I've been an index/buy and hold guy for a long time. You've encouraged me to "diversify" by, ironically, buying individual stocks.)
Posted on 8/10/13 at 10:36 am to Ace Midnight
quote:
Alright - I get that. You pocket the cash sale on the put. I got that. My brokerage says 100% cash secured put. I got that. So, I wait for a down day and sell a put I'm comfortable at long (in this case, $190). I got that.
Okay, so how do I get out, short of actually waiting for the expiration or put? Or is that the actual plan - just churn the stock over, assuming you're up the target 0.5 to 1.5% (or better)?
I wouldn't sell the $190 on a weekly basis from here bc the odds of it going from $179 to $190 in a week are slim. If you want to sell the $190, sell the september 21 for $12.40 which means you'll profit $1240 either way and either not get shares or get them for $177.60. That is 6.5% ROI in 1 month. FWIW september scares me bc of the potential tapering, but visa will fare better than most in the event of tapering bc 1) it already got whacked to below market values and 2) its not a big dividend payer so retirees won't be panic selling.
For the weekly puts, I've learned to sell them at or below the current price. The $175 is $4.75 off the current price so that one will go up in value quicker even if it drops to say $177 bc it's still ahead of its expiration.Actually I sold some $175 on friday and monday morning they will be worth more bc of the time decay as long as the shares stay in the $179-180 range. The $180 will obviously make you more money, also if you sell the $180 while the share is $179.70 and the share goes up to $180.25 say monday morning, the premium will go from $2.69 to say $2.20 and you can sell right there and profit $.49/share x 100 shares minus the $7.99 option fee but I wouldn't close out early unless I've made 50%+ of what the premium was at the least. I'd rather take delivery on $180 - $2.69 and just wait for the shares to rise in a few days and then sell them
Put it this way, whatever share price you sell the put at, as the share price increases, the put loses value and you make money with the end goal being a put going from what you paid $2.69 to $0.00 at expiration. The $175 is nice bc you're $4.70 ahead of expiration but the $180 is 30 cents behind, but thats why you make more money on it.
So if you don't mind owning it at $180 I'd sell that one and make that extra $159
This post was edited on 8/10/13 at 10:51 am
Posted on 8/10/13 at 11:05 am to ThaBigFella
quote:
So if you don't mind owning it at $180 I'd sell that one and make that extra $159
It does look better. I'm a little scared of September, too.
The other thing is - have you been through the end of year holiday season with puts? There always seems to be a sell off around November/December - people trying to qualify for bonuses, bad news at the end of the federal fiscal year, bad news as we approach the end of the calendar year, people need money to buy presents/travel for the holidays, etc.
I'm a little cautious at getting too far ahead on selling puts with that in mind.
Posted on 8/10/13 at 11:10 am to Ace Midnight
haha like I said I've only been doing this for 2 months or so strictly on PM,V, and a few on PSX when it dipped into the low 57's. I won't BS you into thinking im some financial guru, but I did return close to 10% last month but that's bc the whole market was up in general. I mean I have a good grasp on what I want to own at what price and when the puts look like good profits I strike. I learned early to close and take profits ASAP and not get greedy with PSX it fluctuated between $57.50 and $58.25 so much and my put would be up $1000 one day then down $200 the next day and still expire worthless at week end, so now when I get up and Im happy with the profit I close it and if it drops the next day i sell the put again and hop back in.
Always take profits don't get greedy going for the entire premium on expiration, when you're satisfied take the money and run
Always take profits don't get greedy going for the entire premium on expiration, when you're satisfied take the money and run
This post was edited on 8/10/13 at 11:11 am
Posted on 8/10/13 at 11:16 am to ThaBigFella
quote:
Always take profits don't get greedy going for the entire premium on expiration, when you're satisfied take the money and run
I'm getting mentally ready for that. I never go off half-cocked - I always remain fully cocked.
I'm just trying to get a grasp of what that looks like. I'm still months away from trying a straddle or other chained options. I do want to sell some puts for stocks I want to own, anyway. I could have improved positions in both KO and V had I done that (but I can't buy a whole book of V yet.)
Posted on 8/10/13 at 4:03 pm to Ace Midnight
Ace it's still a very good possibility we don't taper and the market keeps roaring, I mean I can't see obama wanting such a giant correction on his watch, so I wouldn't exactly think tapering is anymore than a 30-40% possibility. If so, visa will once again smash earnings in october and raise it's dividend then, should be around $200+ by november 1 if we don't taper. A nice 10% upside from here in 3 months.
Don't even get me started on how bad they're going to blow out earnings after this christmas season haha.
Don't even get me started on how bad they're going to blow out earnings after this christmas season haha.
This post was edited on 8/10/13 at 4:04 pm
Posted on 8/14/13 at 9:26 am to ThaBigFella
Got my dividend notice today - $0.33 a share.
Posted on 8/14/13 at 10:14 am to Ace Midnight
ya i kinda hate the fact you need 300 shares to get a whole share
Posted on 8/14/13 at 10:17 am to ThaBigFella
But wouldn't you want a nice growth stock?
Posted on 8/14/13 at 10:40 am to wegotdatwood
Anybody still buying in long? Ive bought a good bit already, price looks good but im afraid im getting in too deep
Posted on 8/14/13 at 12:26 pm to ThaBigFella
quote:
ya i kinda hate the fact you need 300 shares to get a whole share
Check your math, TBF - $180/$0.33 is about 550 shares to get a DRIP of 1 whole share per quarter.
Jesus Christo! 550 to get 1 share. With PM, that number is about 100 (and trading at about half V to boot)
Posted on 8/15/13 at 8:49 am to Ace Midnight
Visa down to $174.93 right now...geez
Posted on 8/15/13 at 9:47 am to Cousin
quote:
Visa down to $174.93 right now...geez
Look at it this way - you're buying it at an 8 to 10 percent discount - true value right now is about $190, give or take.
Posted on 8/20/13 at 9:10 pm to LSUTOM07
quote:
Visa
Posted on 9/20/13 at 10:16 am to donRANDOMnumbers
thx for this thread MB 
I'm up 10%
I'm up 10%
Posted on 9/20/13 at 10:20 am to Zilla
quote:
I'm up 10%
Right there with ya at about +9.2%
quote:
Look at it this way - you're buying it at an 8 to 10 percent discount - true value right now is about $190, give or take.
Spot on Ace
This post was edited on 9/20/13 at 10:22 am
Posted on 9/20/13 at 11:26 am to LSUTOM07
about 7.8% for me
Posted on 9/20/13 at 12:40 pm to Zilla
Up 9.6%, good call on this one everyone!
Posted on 9/20/13 at 12:48 pm to Beerinthepocket
11.22% for me. Glad I happened to click the thread when I did.
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