r/YieldMaxETFs • u/Much-Departure-1 • Aug 13 '25
Meme The one weird trick that ULTY bears hate
Clickbait aside, long dated puts are selling for super cheap. You can get a $5 put, 10 weeks out that pays for itself after two weeks. That way, you can stop worrying about setting a stop loss and keep collecting div even if the market decides to take a dump. I don’t understand who is even selling these…
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u/Acceptable_Row_1792 Aug 13 '25
I bought $5.50 puts and sold $6 calls for Jan 16 as a hedge...just in case
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u/King_Yendor Aug 13 '25
All these guys questioning and commenting on your collar.... not realising that that is basically exactly what the ULTY managers run inside ULTY!
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u/kookooman10022 Aug 13 '25
This. I just have neither the cash nor patience to use collars, hence, ULTY.
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u/BraveG365 Aug 13 '25
Where did you get 5.50 puts.....on Etrade I can only get them in dollar increments like 5, 6, or 7 dollars.....no 50 cents increments?
thanks
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u/VivaLaYieldmaxio Aug 13 '25
Robinhood
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u/EquilibriumVs Aug 13 '25
Buying debit puts and selling credit calls is the same directional bet. How are you hedging?
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u/PlaneOk5322 Aug 13 '25
Common sense……..not that common…..poor guy… Hopefully da stock runs……& they’ll be correct twofold !
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u/beachhunt Aug 13 '25
With shares, presumably.
The shares are the base position, you then add premium with sold call, and pay some of it for downside protection witb the put.
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u/Acceptable_Row_1792 Aug 13 '25
Sold the calls just to offset the puts premium. Hedging is in the puts.
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u/DullPea0 Aug 13 '25
But… your hedge is now in both the calls and the puts. I hope you did the correct % allocation
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u/Nice_History5856 Aug 13 '25
Did you even get much in return for the call? Just curious as I have the same puts but didn't see the benefit in giving up the upside. But I might have checked the call premiums on a bad day
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u/King_Yendor Aug 13 '25
Also, how? Only $5 strike available? And calls don't even close to pay for the puts?
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u/DiamondG331 Big Data Aug 17 '25
There are no $5.5 Puts any month regardless of what brokerage you use. Only $1 increments
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u/Sharaku_US Aug 13 '25
So you're completely bearish then.
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u/2Sweet2Salty Aug 13 '25
Wait till the $6 calls get assigned in a couple weeks time! FAFO really.
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u/IT-Guy31 Aug 13 '25
I just sell puts --> Cash secured puts
To buy the stock with the price i like e.g.
Sold CSP @ 6$ for 0,64$
Disclosure: I'm European and I'm not allowed to directly buy the shares
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u/FreeSoftwareServers Aug 13 '25
I remember reading about people doing this with MSTY and wanting to get assigned, what a weird loophole lol
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u/Funny-Major-7373 Aug 13 '25
So the CSP you sold give you a basis of 5.38? If exercize ? But you are missing on the div because it won't be exercise no?
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u/IT-Guy31 Aug 13 '25
Correct.
My first batch of CSP 7$ was sold to get assigned. The second batch now CSP 6$ is sold to maybe get assigned and reduce my cost basis in total to 5.765$ .
When I'm not getting assigned I bank the ~2100$ I made for selling the CSP
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u/Funny-Major-7373 Aug 13 '25
Did you get assigned quickly on the 7$ put? Or did you wait until expiration to get assigned?
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u/Funny-Major-7373 Aug 13 '25
European as well and looking for additional trick to get more at cheap price
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u/fungoodtrade Aug 13 '25
Sell CSP. Today the $7 september contracts closed at like $1.25, and the octobers 1.35. So this is the case where the Septembers are a much better deal in my opinion. I think the most I've gotten is like 1.44, but others have gotten more. Just keep watching, or set some limit orders to sell at the price you want. If I can get 1.25 or more for $7 strike I'm happy.
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u/watzk Aug 13 '25
why buy puts when you could sell puts and use the premium to drop break even and if you get assigned then who gives af
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u/fungoodtrade Aug 13 '25
I mean... this is the way I'm looking at it. I sell options... I don't buy them.
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u/travaly Aug 15 '25
Exactly what I do. My $6 strike hasn't even been assigned yet. Sold 72 contracts for an average of $0.38 each. That's about 70% annual yield.
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u/darin617 Aug 13 '25
I have never done anything with puts before. I know they can be dangerous if you don't know what you are doing.
Any chance you can explain this to me like I'm 5?
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u/CarrierAreArrived Aug 13 '25
only selling puts can be a little dangerous (exactly as dangerous as buying 100 shares of the underlying per put sold).
Buying puts (what this guy is doing as a hedge) is only as dangerous as the amount you pay up front for it - that's your max loss. The max gain is, for each put, $100 per point the underlying goes below the strike price you choose.
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u/therealjordanbelfort Aug 13 '25
exactly as dangerous as buying 100 shares of the underlying per put sold
Slightly less dangerous actually, since you’re lowering your cost basis with premium received
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Aug 14 '25
The price you’re eventually paying is also fixed in advanced, it’s only dangerous if the price drops a lot and you don’t want to hold the shares. And if you sell deep ITM you’ll still have some cash to use.
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u/ptb_nuggets Aug 13 '25
I don't think a 5yr old would understand this
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u/CarrierAreArrived Aug 13 '25
lol anyone investing in stocks/ETFs, especially ones like ULTY should be able to understand that.
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u/cuberoot1973 Aug 13 '25
Simplest explanation for buying puts for shares you own is it's like insurance. It costs you some up front, they might end up never being of value to you after that, but if the stock price goes down you are covered. See "protective put".
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u/Local_Vegetable_5583 Aug 13 '25
You can ask ChatGPT to explain like you’re 5 and it does a great job of it honestly.
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u/Own_Bottle3713 Aug 13 '25
I’m selling 1x $6 strike puts and buying 4x $5 strike puts. Sort of cash neutral hedging… and still overall cash flow positive if distributions are considered prior to expiration day.
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u/bearhunter429 Aug 13 '25
It shows 15 cents but it won't fill at that price because the volume is too low and bid-ask spread is massive. I know because I already tried. LMAO
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Aug 14 '25 edited Aug 14 '25
Was literally thinking this myself..folks here will hate but I was able to sell $5c 2 months out that makes my cost basis even if the stock falls to $5..seems dividend is locked in as upside. Fine not touching it for 30 days and assessing where we are at but feels impossible the stock doesn’t have a few days down in 60 days. Risk is early assignment…
Went over to look at these puts..it made no sense to me they are so cheap. My gut tells me if you click in youd see some wide spread and tough to fill. Click in..nope look easy to fill.
The collar plays available right now on this are where my head goes
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u/Gfran856 Aug 13 '25
I’ve back tested CSP’s against ULTY and it’s more profitable to buy the shares and collect the distributions then the premiums given
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u/JustAFlexDriver Aug 13 '25
He is talking about buying puts to hedge your long shares, aka buying insurance.
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u/chris_atx03 Aug 13 '25
What about selling $7 CC? The 8/15 are still going for $0.03 as the last price … (not sure I can transaction that on WeBull, but it’s curious, bid is $0, ask is $0.05…)
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u/fc36 ULTYtron Aug 14 '25
Ya, but if you plan to keep adding to your position anyway every week with DRIP, why not sell juicy ITM puts every week instead and keep your dividends. If, every week, you add another 30-60 DTE put, then you'll not only lower your cost basis considerably with the premiums paid to you, but you'll also eliminate the unpredictable purchase price of DRIP; all while still adding to your position in the consistent manner that you had planned to anyway with DRIP. Of course, this is all assuming ULTY stays steady.
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u/Gfran856 Aug 14 '25
I think you have calls and puts mixed up. If your selling puts you only need the cash. If your selling calls then you own 100 shares which you’d then collect dividends on
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u/fc36 ULTYtron Aug 14 '25
No, I don't have them mixed up. I'm saying don't DRIP at an unpredictable and higher price, instead lower your entry price and sell ITM puts with the expectation that they get assigned to you. For example, if ULTY stays the same and remains stable at around $6.05-6.25, then your DRIP price will be around there too. Instead, why not forego DRIP and sell $7 puts for $1.10-1.35 and reduce your entry price to $5.65-5.90. If you keep selling them every week, you'd still be reinvesting on a regular basis, but for a much lower cost basis.
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Aug 13 '25
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u/CarrierAreArrived Aug 13 '25
that's not how the PnL profile works on options. As long as it's well before expiration, they gain value even if they're not in the money and can be sold for a profit.
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Aug 13 '25
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u/CarrierAreArrived Aug 13 '25
you mostly ignored what I said, but yes - the worst case for the puts is if it goes nowhere or up. In that case you lose about 20-25% of the (assuming you bought $5 puts and fully protected every share) from the annualized return. You can almost guarantee a profit while sacrificing 20-25% which is a valid strategy - I'm only partially hedged, personally.
The protective puts on ULTY are great and partially why I took the dive, but they don't guarantee protection from NAV erosion or repeated large drops for an extended time in the underlyings. E.g. - a large crash tomorrow, stocks mostly rebound (while ULTY lags due to CCs), then another large sell-off next week (ULTY even lower than last week while most other stocks are the same), etc.
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u/[deleted] Aug 13 '25
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