I’m just happy I have ~~~150% puts on everything I own of size.
I made some poor sucker buy 400 of my COP the other day for $60 by exercising puts. (COP trading at $46 at the time) I was assigned 500 MRK today @ 57.50 but I can sell them any time for $60. Same drill.
*Some* IRAs allow long options and covered calls. You have to apply for and receive permission. I worry about big oil dividends, particularly COP. These stocks are going to be yielding 8 and 9% if they sell down as I believe they will and there is no way they will be able to maintain those dividends. The day any of those stocks suspend or cancel or “modify” their divs, the stock, no matter where it is trading at that point, will lose 1.5 years of dividend = ~~10% immediately. This is not a risk I am taking nor would I reco anyone else take. Oil stocks, stalwarts such as XOM, COP, CVX, in particular. If the overall market declines and oil declines and appetite for stocks decline, these will be a multimonth pukefest. None of us have to like it, but the outcome is nearly certain.
This is a liquidity event. I am going to repeat that.
>> *Some* IRAs allow long options and covered calls. You have to apply for and receive permission.
I’ll look into that. My regular trading account allows it but I don’t think my IRA account does.
>> I worry about big oil dividends, particularly COP.
I am concerned about that, although not quite worried. I could, of course, be wrong. The living room elephant is the nearly insatiable (and, I believe, quite elastic) demand for oil. Tell you what — I wouldn’t want to be in renewable energy right now. ;-)
>> This is a liquidity event. I am going to repeat that.
Sure looks that way, doesn’t it. Due to external events — I can’t take credit for the planning — I’m mostly in cash. In fact, up until a couple weeks ago, I thought “too much cash”. Now I’m relieved it’s that way.
A liquidity crisis after all these years of huge expansions in the money supply...
That’s frightening and sick.