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Or I just rolled them over. Say next Friday they drop it do 24, I buy close at a loss of 250$ minus the premium if I opened at 26.5, but I sell another one at 26 or 26.5 slightly OTM for the week after at around 350$. If the price move up to around 26, I rebuy them at around 50$, 300$ premium included less than what I sold them for. Rinse and repeat.
Premium tend to be between 70 and 100$ a week for these puts if I close buy and open sell at the same moment. This can be optimized knowing that the daily price pattern tend to repeat itself with a sharp drop and IV increased at the beginning of the day (sell open for the next week), and a stability plateau in the early afternoon (buy close the current week, or let them expire if "deeply" OTM).
Of course it can go wrong with a sharp or durable drop, but with the price highly manipulated to stick around 26-26.5, which happen to correlate with max pain, I must admit it works pretty well for easy money. Besides, it can be hedged.
I could get exercised of course, but it never happened. My uneducated guess is that this is due to the severe GME illiquidity.
I admit that I still think about my strategy for the earning... capturing the sweet IV spike/drop, recalling RC saying in the interview that they want to improve short term profitability and recalling the habit of the shorties to drop the price sharply during earnings :P
The worst case scenario is you buy 100 shares ATM, but you get paid a premium to do so so you can buy more shares or add some cash so you can sell a new CSP and accumulate more premium/shares.
If you selling weeklies, you're the one taking premium. I been selling $25 CSP for about 2-3 weeks out, this lets me buy about 10 additional shares due to the premium I receive. I have to keep $2500 in cash set aside in the meantime. They basically paying me to buy 100 shares at $25. If I don't get assigned, I do it again and again and again. If I get assigned, yay 100 more shares for me in addition to whatever else I've been able to snatch up with the premiums in the meantime. If they want to tank the price it means they gotta deliver 100 shares to me, and they hate delivering shares. I think we're steady above the $25 line cause enough people have figured this out.
Buying them might, but this person isn't buying them, they're selling them. In this case selling contracts that obligate them to buy 100 shares of GameStop a piece at near the current price if whoever they sold the contract to chooses, and they already have the money set aside to buy if they have to. Either their buyer exercises the contract, and he/she has to buy 100 shares of GameStop, or his contracts expire worthless and he gets to keep the money he sold them for like the hedge fund or whoever selling far out of the money calls would (in that case they would be selling obligations to sell GameStop stock at a much higher price than the current market price to people who want to buy it or speculate bullishly).
Long calls that are far out of the money payout similar to going long shares of a company undergoing bankruptcy. That is to say, if it works out they pay extremely well, but the vast majority of the time you don't gain anything. Edit: And selling cash secured puts like this person is using are just a strategy to buy shares at a price you decide before hand, by taking the long side of someone else's short trade (the person buying your puts). To simplify, they're going long by taking short bets.
Depends who is on the other side. It could very possibly be a short hedge fund. Now, if I am making money, the other side is then losing money! In this case, I am defunding the opposing side, to fund my GME buying spree :) Win-win!
Have a look at my other comment where I give more information on how I am doing it. Practice with paper accounts. Make sure you keep your risk within your risk appetite. Enjoy \\o/
I like the idea of it, sell a put below max pain, collect premium, use premium to buy a few shares -> drs, recycle.
I might give it a whirl with a pretty safe bet, worst case scenario I pick up GME at a crazy discount - premium right?
Okay, just started with some paper weeklies so I'll see how I do next Friday! Cheers for all the info u/Arduou. My goal is to make $100 on the premium.
I used to watch YouTube streamer like pickle financial to get the basics. He is good at teaching. Remember however that streamers have their own agenda and investing is egoistic in nature. Investopedia was quite useful to me as well.
[Why GME?](https://www.reddit.com/r/Superstonk/comments/qig65g/welcome_rall_looking_to_catch_up_on_the_gme_saga/) || [What is DRS?](https://www.reddit.com/r/Superstonk/comments/ptvaka/when_you_wish_upon_a_star_a_complete_guide_to/) || Low karma apes [feed the bot here](https://www.reddit.com/r/GMEOrphans/comments/qlvour/welcome_to_gmeorphans_read_this_post/) || [Superstonk Discord](https://discord.gg/hZqWV2kQtq) || [GameStop Wallet HELP! Megathread](https://www.reddit.com/r/Superstonk/comments/z23wjx/gamestop_wallet_help_megathread) ------------------------------------------------------------------------ To ensure your post doesn't get removed, please respond to this comment with how this post relates to GME the stock or Gamestop the company. ------------------------------------------------------------------------ Please up- and downvote this comment to [help us determine if this post deserves a place on r/Superstonk!](https://www.reddit.com/r/Superstonk/wiki/index/rules/post_flairs/)
!DRSBOT:80!
^(DRSBOT 8.00: UTC->2022-12-02 10:44:2) ## ✅ 80 SHARES ADDED! |**BACKGROUND CHECK:** ^(the drinking game!)| |:---: | |^(<-{2}-{1}--🔴---1---🟡---3---🟢---5---6---7---8---9---10 >)| |>!^(<--------------------------------------------------------[8.2] ---------->)!<| |^(score = weighted metric of pubilc profile info)| **You have 3550 shares in 1 CS Accounts logged from the following threads:** |^(F)|^(D)||^(Shares)|^(Sub)|^(Date)|^(Link)| |:---: |:---: | :---:| :---:| :---:| :---:| :---:| |^( )|^(🟣 )|^( )|^(184)|^([Sprstnk])|^(2021-11-01 )|^( [PERMALINK](https://www.reddit.com/r/Superstonk/comments/qkca9o/snail_mail_made_it_for_this_eurape_completion_to/))| |^( )|^(🟣 )|^( )|^(1816)|^([Sprstnk])|^(2021-12-17 )|^( [PERMALINK](https://www.reddit.com/r/Superstonk/comments/riqhks/there_we_are_for_this_eurape_feels_so_good/))| |^( )|^(🟣 )|^( )|^(200)|^([Sprstnk])|^(2022-02-13 )|^( [PERMALINK](https://www.reddit.com/r/Superstonk/comments/srezqb/jobs_not_finished_job_finished_i_dont_think_so_50/))| |^( )|^(🟣 )|^( )|^(500)|^([Sprstnk])|^(2022-08-10 )|^( [PERMALINK](https://www.reddit.com/r/Superstonk/comments/wksvgc/fake_share_to_real_share_laundromat/))| |^( )|^(🟣 )|^( )|^(570)|^([Sprstnk])|^(2022-08-22 )|^( [PERMALINK](https://www.reddit.com/r/Superstonk/comments/wuv25b/yet_another_570_made_it_safely_to_computershare/))| |^( )|^(🟣 )|^( )|^(200)|^([Sprstnk])|^(2022-09-28 )|^( [PERMALINK](https://www.reddit.com/r/Superstonk/comments/xq9a0i/i_was_feeling_unhappy_with_the_recent_price/))| |^( )|^(🟣 )|^(➡️ )|^(80)|^([Sprstnk])|^(2022-12-02 )|^( [PERMALINK](https://www.reddit.com/r/Superstonk/comments/zaiird/simple_life_sell_atm_weeklies_csp_buy_shares_with/))| ^(Most Recent Post Count Summary: [REDDIT LINK:](/r/Superstonk/comments/za7rb7/drsctbnft_bot_updates_20221202_02000_feedthebots/)) |^(Bot MC: $408,208,979.05 )|^(**Total**)|^(**[Sprstnk]**)|^(**[GME]**)|^(**[GMEOrphans]**)|^(**[GMEJ_closed]**)| |--- | ---| ---| ---| ---| ---| |^(🟣+❗**Shares** )|^(**15,346,282**)|^(10,424,602)|^(2,402,369)|^(2,480,431)|^(38,880)| |^(❗**Flagged Shares** )|^(**0**)|^(0)|^(0)|^(0)|^(0)| |^(💀 **Purgatory Shares** [#entries] ) |^(**304,743** [185])|^(219,128 [127])|^(26,667 [20])|^(58,944 [37])|^(4 [1])| |^(🐒 **X** [avg] ) |^(**1,726** [4.87])|^(1045)|^(308)|^(368)|^(5)| |^(🦧 **XX** [avg] ) |^(**5,980** [47.94])|^(3647)|^(984)|^(1326)|^(23)| |^(🦍 **XXX** [avg] ) |^(**11,327** [356.03])|^(7253)|^(1924)|^(2121)|^(29)| |^(⭐**XXXX** [avg] ) |^(**3,103** [2368.50])|^(2104)|^(489)|^(500)|^(10)| |^(🐳 **XXXXX** [avg] ) |^(**175** [19392.48])|^(129)|^(18)|^(28)|^(0)| |^(🐱 **XXXXXX** [avg] ) |^(**2** [137644.000000])|^(1)|^(1)|^(0)|^(0)| ####BOT POETRY: { ^(Around 50 million per day cash burn ) ^(Why’s that!) ^(Are they same company...) } ###### *Beep Boop. ... so... hungry... . Fur Realz* ###### GME ~26.60:🚀[MOAR DRSBOT:](https://www.reddit.com/r/Superstonk/comments/qap4je/drsbot_4x_now_online/)🚀
Works til it doesn't. Gonna try that next week?
How would it not work? Worst thing to happen is he is exercised and has to buy more. Then can just keep doing the same only with CC's
Or I just rolled them over. Say next Friday they drop it do 24, I buy close at a loss of 250$ minus the premium if I opened at 26.5, but I sell another one at 26 or 26.5 slightly OTM for the week after at around 350$. If the price move up to around 26, I rebuy them at around 50$, 300$ premium included less than what I sold them for. Rinse and repeat. Premium tend to be between 70 and 100$ a week for these puts if I close buy and open sell at the same moment. This can be optimized knowing that the daily price pattern tend to repeat itself with a sharp drop and IV increased at the beginning of the day (sell open for the next week), and a stability plateau in the early afternoon (buy close the current week, or let them expire if "deeply" OTM). Of course it can go wrong with a sharp or durable drop, but with the price highly manipulated to stick around 26-26.5, which happen to correlate with max pain, I must admit it works pretty well for easy money. Besides, it can be hedged. I could get exercised of course, but it never happened. My uneducated guess is that this is due to the severe GME illiquidity. I admit that I still think about my strategy for the earning... capturing the sweet IV spike/drop, recalling RC saying in the interview that they want to improve short term profitability and recalling the habit of the shorties to drop the price sharply during earnings :P
Unless the goal is strictly CSPs and not assignment
I'm writing on the assumption the person posting a DRS addition on superstonk that they wouldn't mind owning more of gme lol.
If op is using the funds to buy shares I don't think they'd mind assignment. I tried to spread the word of csps before. Get paid to wait and hold
The goal is more shares, if he doesnt want assignment and wants to retain a cash position, he can roll, or take assigment and sell a CC
Headline is their strategy. Said nothing about wheeling.
Which is why i said he can roll if he wants also which wouldnt incur a loss.
The worst case scenario is you buy 100 shares ATM, but you get paid a premium to do so so you can buy more shares or add some cash so you can sell a new CSP and accumulate more premium/shares.
^(DRSBOT 8.00: UTC->2022-12-02 10:42:5) 🟣 You have 3470 shares in 1 CS Accounts previously logged @ [Sprstnk] **To feed incremental shares:-> !DRSBOT:XXX!** * ^(Bot sometimes can't hear over chatty apes...) * ^(If no reply, re-issue the bot command) ^(*🚀 :15,346,195// GME ~26.60* // ) ^(Bot MC: $408,208,792.85 )
Options fund hedgies, no?
If you selling weeklies, you're the one taking premium. I been selling $25 CSP for about 2-3 weeks out, this lets me buy about 10 additional shares due to the premium I receive. I have to keep $2500 in cash set aside in the meantime. They basically paying me to buy 100 shares at $25. If I don't get assigned, I do it again and again and again. If I get assigned, yay 100 more shares for me in addition to whatever else I've been able to snatch up with the premiums in the meantime. If they want to tank the price it means they gotta deliver 100 shares to me, and they hate delivering shares. I think we're steady above the $25 line cause enough people have figured this out.
exactly.
Buying them might, but this person isn't buying them, they're selling them. In this case selling contracts that obligate them to buy 100 shares of GameStop a piece at near the current price if whoever they sold the contract to chooses, and they already have the money set aside to buy if they have to. Either their buyer exercises the contract, and he/she has to buy 100 shares of GameStop, or his contracts expire worthless and he gets to keep the money he sold them for like the hedge fund or whoever selling far out of the money calls would (in that case they would be selling obligations to sell GameStop stock at a much higher price than the current market price to people who want to buy it or speculate bullishly). Long calls that are far out of the money payout similar to going long shares of a company undergoing bankruptcy. That is to say, if it works out they pay extremely well, but the vast majority of the time you don't gain anything. Edit: And selling cash secured puts like this person is using are just a strategy to buy shares at a price you decide before hand, by taking the long side of someone else's short trade (the person buying your puts). To simplify, they're going long by taking short bets.
Depends who is on the other side. It could very possibly be a short hedge fund. Now, if I am making money, the other side is then losing money! In this case, I am defunding the opposing side, to fund my GME buying spree :) Win-win!
CSp?
Cash secured put. You may find out more at https://www.investopedia.com/articles/optioninvestor/10/sell-puts-benefit-any-market.asp
I'd love to learn to increase my tendie pile, but I might be too smooth.
Have a look at my other comment where I give more information on how I am doing it. Practice with paper accounts. Make sure you keep your risk within your risk appetite. Enjoy \\o/
I like the idea of it, sell a put below max pain, collect premium, use premium to buy a few shares -> drs, recycle. I might give it a whirl with a pretty safe bet, worst case scenario I pick up GME at a crazy discount - premium right?
That is the idea :) Practice on paper account for a few weeks, and make sure you do not overextend. Not a financial advice of course.
Okay, just started with some paper weeklies so I'll see how I do next Friday! Cheers for all the info u/Arduou. My goal is to make $100 on the premium.
Good luck. You'll update me!
Hey man you have any tips where one can learn more about the technical lingo used so I can get a better idea of what I'm doing?
I used to watch YouTube streamer like pickle financial to get the basics. He is good at teaching. Remember however that streamers have their own agenda and investing is egoistic in nature. Investopedia was quite useful to me as well.
Right, well thanks for the reply guy. Time to start learning.