It's been a crazy week for me.
Not just the Iran headlines which spiked oil futures and spooked the market. Remember friends as options sellers, we need fear and pullbacks, don't be afraid look forward to opportunities! More about this after a quick aside...
My real estate agent called to tell me my house is "unique." Six acres, middle of the woods. There's a pond. There's also some typical Alabama things like a 1986 single wide trailer for a neighbor. Turkey, deer, frogs, turtles and wood ducks are unofficial pets
I don't think he meant it as a compliment. You know how people say "You look great for your age?"
I didn't hear from him for almost a day after giving him the green light and I was confused... What's taking so long to get this listed?? He spent hours trying to find comps. HOURS.
He finally calls me and I'm listening to him all the while I'm thinking...this is exactly what it looks like when you trade the wrong underlying. I basically own a random ticker someone posted on a Reddit thread with zero open interest, a bid-ask spread you could park a truck in, and two buyers if I'm lucky.
Meanwhile NVDA has thousands of strikes, real-time pricing, and a market maker ready to fill me in seconds.
Anyway enough about real estate for now. I've been driving back and forth to Orlando this week but I've also been talking to a lot of people about trading. Different people, different experience levels, different accounts. But same conversation topics every time.
"Buying low and selling high sounds so easy."
Yeah. It does. Conceptually it's simple. Buy the bottom, sell the top. Done.
Except we both know that's not how it actually goes. Where is the top, where is the bottom? You only know after it happened.
Here's what I keep seeing. People are afraid to rent out their shares because they might have to sell them... Hello, sell high!
Someone sells a covered call near an all-time high (which is exactly right by the way) then the stock keeps climbing and they panic. They roll it out BEFORE it gets tested or worse yet they close that covered call FOR A LOSS! Look at NVDA... If you sell a 195 covered call, be willing to get called away. You probably won't, and if you did... you sold high:
This is a two sided market, don't be afraid to sell options... What if you get called away?? You rented out your shares to sell near the high.
That's a win. Getting called away high IS the goal.
And if you want the shares back? Flip to the put side. You can sell weekly puts that are out of the money. Choose your delta based on how bad you want back in!
If you are busy, you can sell monthly options... Look at the 155 put on NVDA:
$215 to get NVDA at 15% discount? While your cash is sitting is SGOV? That's not a loss. That's the wheel doing exactly what it's supposed to do.
We're heading into March expiration next week. Before you roll out those options that are expiring... Ask yourself do I have any covered calls I've been rolling out of fear instead of strategy?
Any puts I've been avoiding assignment on because I'm scared and not sure I want the shares?
Shares are assets. Buy low and sell high is a great way to make money. BUT you have to sell and you have to buy eventually...
Let's see how my my house, six acres, and pond work out in terms of P/L because I have no idea if there is any open interest or even what the asking price should be...
This is why I love the stock market, I can see all the data I need in less than a minute to make an informed investment. And you can too, make sure you checkout my FREE blueprint below if you haven't already, and forward this to a friend you think can benefit.
Turning wealth into knowledge.
$Maxwell
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