[xwdv]

The market is on an uptrend, so I go for OTM calls maybe about no more than 10% above the current price. If I get assigned then I just buy back my position anyway, a little loss of profit, but most of the time these calls are expiring worthless and I keep the premiums. Could probably make more money getting calls closer to the money, but I don't want the hassle really.

It's amazing that people will consistently pay me money for the chance to buy my stocks at the end of the week.

[ApolloRising]

Is there a book or learning source you recommend?

[xwdv]

I don't have any books specifically for options, I learned options through random online courses, and read other general books about investment and stock trading.

What's important is to not take other people's experiences in the market as "knowledge". People say a ton of stupid shit and give you the sense you cannot even make 1% more than whatever the market does so you might as well just buy an index and hold forever. Literally in 2020 my stock portfolio is 83% higher than what it was at the start, which is probably an unbelievable amount for people who think anything more than 10% gain in a year probably means you're taking massive Las Vegas style risks or whatever. To be fair though, I'm sure anyone who has remained invested in this market has seen similar gains, so it's not like I should be working at a hedge fund or something.

I took a lot of the conservative advice for too long: investing in value, looking at fundamentals, avoiding cultish stocks. It was a waste of time. I bought Cloudflare and Fastly last year at IPO putting almost $20k in each and have made over $75k profit off of both, and that's just two of my stocks.

I find the amount of money you're willing to risk is a very personal thing, and often is influenced on how much money you're getting from other sources of income in your life. Since I'm a typical dev making six figures a year I'm willing to risk quite a bit.

For me, I treat my stock portfolio more like a business than some kind of savings account for the future. That helps me make optimal decisions and not get swept up in emotions. Businesses do go out of business and you can lose all the money you invest in them, so why not a stock portfolio?

Truth is though, my risk was never all that great anyway. A couple tens of thousands in losses doesn't really move me anymore since I know recovery is always possible, and almost always seems to propel you to greater highs if it happens. There was a point this year I lost $60k in gains, but I held strong and it all came back and then went on to make even more massive gains.

Enough of this rambling though, my advice is just get out there and see the truth for yourself. You'll see what I mean.

[ApolloRising]

Thanks for the answer, it is a believable number, I'm up 30% and have only a moderately aggressive portfolio. I went in at near the bottom and just figured it would recover and could shop cheap.

[jerry80]

You could get even more passive by just investing in a buy-write index ETF. e.g. PBP or QYLD.

[xwdv]

No thanks, I will keep stocks myself and write my own calls while flipping a bird at those indexes. Why would I want to miss out on the gains for the underlying?

[jerry80]

Those indexes implement the strategy that you're talking about. I don't understand what you mean by "miss out on the gains for the underlying."

[xwdv]

Am I missing something? If I invest in those indexes I’m not investing in the stocks I actually want to own.

[dahx4Eev]

Do you look for high IV or low IV contracts?

[xwdv]

I look for high IV in stocks whose patterns I've become familiar with overtime to get a real sense if it will actually hit a certain strike. I have stocks that I know are prone to selling off at certain resistance points just by watching them do it repeatedly, but some options buyers may not know that since. So I profit off knowledge asymmetry and am comfortable with the high IV.

If I don't know the stock well (maybe less than a month or so of watching it daily) I'll just get a low IV contract.