BTO some Powell Puts this morning - 02/03 $160's for $0.80 each - hopefully these are worthless on Friday.
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It's no more double taxed than a taxable brokerage account. The only difference is the 10% penalty and (I'm guessing) no long term capitol gains discount. The principle going into your taxable brokerage account has already been taxed too. I don't think Roth's have a SEPP option.Quoting from your prior post:
"If I can pull this off and get some experience and confidence, I was hoping to be able to retire on selling calls without touching the principle. This is all in a Roth so I would have to make enough to live on after paying income taxes and the 10% penalty. I still have about ten years before I can pull money out of my Roth without paying taxes."
I'm understanding that to mean you plan to pull your gains out of the Roth and pay the tax and the penalty on them? If so, since Roth money is already post-tax, you'd be getting taxed twice and paying a penalty on top of it. Gains are not ensured here (and losses are probably more likely if you are selling against shares that you aren't willing to let go, because most likely at some point you will have to buy back at a loss or lose your shares) so you'd have to do exceptionally well to compensate for the double tax plus penalty. We've all hoped to derive a dependable, steady income from doing this but I don't think very many have been successful - and that's without double tax + penalty.
I don't know your situation, but if you have enough in contributions to your Roth you can pull them out anytime and buy shares in a taxable account that you can then sell calls against that will be single taxed and no penalty. You will obviously lose the awesome tax advantage of share price appreciation in the Roth - but again, you'll probably lose those shares on a big run if you start selling calls down here anyway.
If you have a tax-deferred IRA, you could do a SEPP to access the money early.
It's no more double taxed than a taxable brokerage account. The only difference is the 10% penalty and (I'm guessing) no long term capitol gains discount. The principle going into your taxable brokerage account has already been taxed too. I don't think Roth's have a SEPP option.
However, one has to keep in mind the structure and timing of the retracement is as important as the target. Since the spike up was so impulsive, the retracement should not take place in the form of a crash but rather a zig zag, most likely in correspondence to a market wide correction. This is important because in a crash, there's little premium in selling calls as you wake up one day and it's down 7% and it won't even bother bouncing here and there. On the contrary, in a zig zag correction, there will be a lot of dead cat bounces to sell calls into.It's the minimum, not the maximum.
Be sure and research this carefully - from what I've read about ROTH accounts, early withdrawals can generate both the 10% penalty IN ADDITION to turning that withdrawal into a taxable event. I could easily be wrong about that - thus the due diligence.It's no more double taxed than a taxable brokerage account. The only difference is the 10% penalty and (I'm guessing) no long term capitol gains discount. The principle going into your taxable brokerage account has already been taxed too. I don't think Roth's have a SEPP option.
Nice things if 59.5 and trading and investing TSLA in a Roth: tax-free growth and distributions, no need to track profits and losses per transaction (for tax reporting), and no tax consequences to clutter trading decisions. There may be limitations on the types of options that can be traded, but that’s probably a good thing in my case — removes temptation to dabble in things I don’t understand or the need to spend time learning about them.Be sure and research this carefully - from what I've read about ROTH accounts, early withdrawals can generate both the 10% penalty IN ADDITION to turning that withdrawal into a taxable event. I could easily be wrong about that - thus the due diligence.
However, one has to keep in mind the structure and timing of the retracement is as important as the target. Since the spike up was so impulsive, the retracement should not take place in the form of a crash but rather a zig zag, most likely in correspondence to a market wide correction. This is important because in a crash, there's little premium in selling calls as you wake up one day and it's down 7% and it won't even bother bouncing here and there. On the contrary, in a zig zag correction, there will be a lot of dead cat bounces to sell calls into.
I'm rounding these numbers up. Technically can go as low as 102. Remember June? We retraced (210) almost 100% of the initial spike up from the low (207). The normal level is 130. Between 130 and 120 it's considered deep. Below 120 everyone will start prepping for a new low.If 140’s is the minimum, what’s the max drop?
I'm rounding these numbers up. Technically can go as low as 102. Remember June? We retraced (210) almost 100% of the initial spike up from the low (207). The normal level is 130. Between 130 and 120 it's considered deep. Below 120 everyone will start prepping for a new low.
I’ve got 3Feb CC to monitor and roll (3x$125 and 10x$160). After monitoring SP and CC values closely the past week, and seeing not a huge difference in roll credit/debit from ”watch and see”, I may wait until Friday to execute in case the SP settles after FOMC today. Might cost a little bit if SP continues up, but it still seems possible the $160s could expire.So, are we rolling calls forward or selling put? We are hovering the day's high from the morning.
No position anymore for this week.So, are we rolling calls forward or selling put? We are hovering the day's high from the morning.
At least as long as the runup, most likely (much) longer so maybe 2 months.Thanks! What timeframe are we talking about?
Told ya.I have bought QQQ puts and am waiting for Darth to speak.
This is your chance to load up on calls!
Indeed! Suddenly Friday seems like a wild card again...Wow, Powell is sounding pretty dovish to me.
Well, he should until he sees evidence that inflation is NOT decreasing by half a percent YoY on a monthly basis.. Pretty good evidence that economy is on the verge of getting trashed as well...Wow, Powell is sounding pretty dovish to me.
Wow, Powell is sounding pretty dovish to me.