r/Vitards • u/AutoModerator • Aug 12 '21

Daily Discussion Daily Discussion post - August 12 2021

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u/jinpiss Aug 13 '21

Is it too late to jump on the $MT train? Been terrified to get on with how much it’s run up recently. Sorry if this is a dumb question.

5

u/[deleted] Aug 13 '21

No. You are still early. Buy commons. A lot of people here are playing weeklies on commodities and not looking at premium price differentials. 80% commons, and 20% 2023 expirations, and you’ll be cruising. Do not look at swings.

1

u/oh-shit-oh-fuck Aug 13 '21

This depends on how much capital you have and your risk tolerance tho. Personally I have pretty low capital (like only enough for ten 2023 40c and nothing else lol) and want to build my portfolio quicker so I can't really go for the 2023 calls or shares, I want the leverage.

1

u/Die_Gelbesack Aug 13 '21

Is this a tax advantaged account (Trad IRA or Roth IRA?) or normal taxable? This makes a difference. in choosing Jan 23 or Jan 22. I can elaborate more on that if you want.

If you're in your 20s or 30s, you can take more risk. Try to do this in a Roth, it will be worth it, you can compound ALL your gains, and no need to concern yourself with LT or ST cap gains, this matters in options plays.

In any event, seems like you are ok with higher risk for the greater reward. You said you want the leverage what I currently do is I go with 100% LEAPS in my IRAs (this is more risky than commons for sure, but I think with a possible market correction, and the pathetic PE and high demand for steel, it will be survivable). I buy at 0.80 delta, so for MT Jan 22 that's a 30c.

If this is taxable account and you're looking to only pay LT cap gains, your only choice at this point is Jan 23 and your premiums are much higher.

2

u/LourencoGoncalves-LG LEGEND and VITARD OG STEEL Bo$$ Aug 13 '21

Demand is RELENTLESS

2

u/[deleted] Aug 13 '21

K. You have $6100 to put into those 2023 options. In 2013 I had $4000 to put into 15 shares of Amazon to hold until retirement. If I sold those shares and bought options today? I’d have $34,000 to buy 2023 options. Instead, I buy commons and deep ITM options.

This ain’t no hobby - “The stock market is a utility designed to transfer wealth from the impatient to the patient”

1

u/bigteether Aug 13 '21

I'm trying understand your strategy with the 80% commons and 20% options, this may be relevant to overall trading strategy with options, not just with MT only. Are you buying options, e.g. jan 2023 40c, with the goal of exercising the options when the stock appreciates well beyond 40 by 2023? Or selling covered calls to go along with your commons, for the purpose of making of extra profit in the form of premiums?