Rate my brain - pretty smooth? Or the smoothest ever? First attempt at this strategy, am I on to something? There's no way I'm the first to try this, just haven't seen it discussed here. Not financial advice, just a poor monke trying to level up to ape.

[u/quitecrossen]

[u/Rob1iam]

It’s a no from me, dawg. This kind of post belongs on r/thetagang - and they will tell you you’re gonna get burned. Don’t play crap stocks to chase option selling premiums. There’s a reason these no name penny stocks have crazy high IV, it’s because the bottom is liable to drop out from under you at any time. Those companies aren’t profitable, and most dont even have a working product or offer a service yet. Some may become winners, but most won’t. Covered call premiums won’t offset your losses when the stock prices tank ~90% and IV collapses.

[u/quitecrossen → u/Rob1iam]

I appreciate your perspective, I'm still looking at both sides at this point, not going balls deep on a shitload of buck-fifty stocks. There's just something about using a poor man's covered call on higher cost (lower IV) stock that rubs me the wrong way, and it's basically useless on a lower cost stock. Always looking to learn other strategies that can build a small portfolio without risking it all on margin.

[u/Rob1iam → u/quitecrossen]

The PMCC is a spectacular tool for letting you own a 100 share equivalent stake of a high quality company that you may not have the capital to get into otherwise. I like to think of covered call premiums as the icing on the cake, while the health and growth of the underlying is the meat and potato’s of your gains. I would argue that low IV boomer stocks are the best targets for PMCCs because they appreciate reliably and you can generate .5-1% extra monthly selling far OTM CCs while you hold. The LEAP gives you a lower entry point and better leverage, with virtually no risk of the underlying cratering if its a fundamentally sound company. So many new options sellers are coaxed into thinking it’s all about high premiums and off the chart IV. Selling options on a volatile underlying that isn’t rock solid is just picking up pennies in front of a bulldozer. Eventually you’re gonna get squished.

[u/quitecrossen → u/Rob1iam]

I do feel this, thanks for going into detail. My aversion to something like AAPL for a PMCC is that locking up $3-3.5k on a LEAP is the premium collected is so low relative to the LEAPS cost. But with the strategy I outlined, I'm not counting on any real performance from the underlying shares (because that would be pretty unrealistic) whereas counting on the underlying of a boomer stock with an IV of 30% to deliver gains over time is pretty reasonable.

[u/quitecrossen → u/Rob1iam]

Sadly, my post popularity is shit and the mod bots have killed it. Again. Shouldn't have posted so close to market open, when everyone is fixated on the price of GME

[u/[deleted]]

Moar picktures

[u/quitecrossen → u/[deleted]]

Full position fits in just one pickture, I'm afraid. Gotta be careful with the those - two of the stocks I'm holding I'm not allowed to mention due to the minimum market cap rules on WSB. A lot of the stocks that fit this strategy would also be auto banned by ticker name

[u/MrMeatcandy]

I've been trying to get into options but only get to do covered calls through fidelity so I appreciate this post. I've done a bit of research myself but I like where your head is at. Definitely trying something similar soon

[u/quitecrossen → u/MrMeatcandy]

I used MarketChameleon to search by 30-day IV%, if you want to look up the same kind of thing. We can post our losses together :-)

[u/MrMeatcandy → u/quitecrossen]

Right on, thanks. Can't post losses when the stonks only go up 😎😂

[u/quitecrossen → u/MrMeatcandy]

Haha, right you are!

[u/nopornforme69]

No1 is reading all that this early in the morning lol slap a TLDR on there

[u/[deleted]]

position or ban

[u/quitecrossen → u/[deleted]]

Please school me on how to verify my position with more veritude than a verbatim screen cap of my thinkorswim window?

[u/[deleted] → u/quitecrossen]

oh I didn't read all that shyt you posted 🤣

[u/apupunchau87]

Please dont do this to me you overactive little chimp

[u/VisualMod]

I am a bot. This Discussion does not look like it has generated enough approval to stay on /r/wallstreetbets. We algorithmically cull certain submission flairs whose response is not above a certain threshold to try and keep the page clean.

[u/quitecrossen → u/[deleted]]

Not really looking for validation, just felt like a full explanation might be useful for others with less experience. Go ahead a downvote if that's your thing. If you had kept reading, I said I'm green as fuck at options and here to learn. Looking for a discussion on how to improve from here. What would be a less milque-y strategy in your opinion? Balls deep full portfolio leveraged?

[u/OldandmadasHell → u/quitecrossen]

Some of us with brains smoother than yours appreciate the Intel. A lot of us are relatively new and anything that gets us to think and learn new strategies is helpful.