Hey Kris thx. For context, what is your ballpark transaction value for this strategy, such as the baba trade you reference? I don’t have enough confidence in my trading skills to wager more than a few thousand per trade. You mentioned you spread around a lot of “bets”.
So, I wouldn't call them bets. I want to own these stocks at the strike prices. I tend to leg into puts, or shares directly, at around 0.33-0.50% of my investable capital. It will vary by stock and my conviction.
I'd characterize them as bets when investors begin opening positions in naked options and also using the leverage inherent in them. Everything I do is cash-secured.
Great point on individual stocks and confidence/conviction. It takes a more active commitment to research and follow a smaller portfolio of stocks. In these cases, I would recommend going with ETFs. The article I wrote on dividend growth ETFs is a good place to start. Even then, with a lump sum of capital to deploy, I recommend legging in and DCA'ing capital over several months at least, unless there is some large correction. Deploying a lot of capital at once exposes you to lots of timing risk. Just someone who invested in early 2000 and waited 15 years to get their capital back.
Really enjoyed this read!
Thank you, that's great to hear!
Hey Kris thx. For context, what is your ballpark transaction value for this strategy, such as the baba trade you reference? I don’t have enough confidence in my trading skills to wager more than a few thousand per trade. You mentioned you spread around a lot of “bets”.
Appreciate the comment and questions!
So, I wouldn't call them bets. I want to own these stocks at the strike prices. I tend to leg into puts, or shares directly, at around 0.33-0.50% of my investable capital. It will vary by stock and my conviction.
I'd characterize them as bets when investors begin opening positions in naked options and also using the leverage inherent in them. Everything I do is cash-secured.
Great point on individual stocks and confidence/conviction. It takes a more active commitment to research and follow a smaller portfolio of stocks. In these cases, I would recommend going with ETFs. The article I wrote on dividend growth ETFs is a good place to start. Even then, with a lump sum of capital to deploy, I recommend legging in and DCA'ing capital over several months at least, unless there is some large correction. Deploying a lot of capital at once exposes you to lots of timing risk. Just someone who invested in early 2000 and waited 15 years to get their capital back.
Happy to exchange ideas on this further.