TLDR

1. Rockydennis Presents using what we learned last quarter.

2. Weekly Stock Picks - SNDL, CODX, ACVF, IRCP, STAG

RIOT went to $20 today. I haven’t looked at it since this afternoon, but my predicament remains unchanged. Writing calls that end up deep in-the-money has led me to make some bad decisions. Thankfully, that’s not the issue. It contributed. Mostly though my problem was simply not knowing what to do when the share price rises dramatically. I was prepared for the other possible scenarios. You don’t typically make a defense plan for having too much money (or at least, we working class don’t).

The TLDR answer is that you’re going to have to buy to close the contract, or lose your shares. I would suggest not writing calls super far out into the future to cover the cost of closing. You can, it works, but when the cost to buy back goes from $30 to $300…. Also, the deeper in the money your contract is, the greater likelihood it’ll get exercised.

If the image above seems to represent the exact opposite concept I’m getting at, that’s because it does. That’s profit potential for a call option that you’ve bought. I didn’t pick it for its relevance.

Even though I’ve got lots of theoretical dollars, and an above-average (for me) amount of regular dollars, what I don’t have is lots of regular dollars replacing my need for employment. And because of the latest 2 week shutdown, I’ve been out of work for 2 months. Been a long couple of weeks, Jesus Christ.

That’s alright though, because now I can start a new game. 2020 was just me renting it for a weekend. 2021 is buying it outright right before summer vacation starts.

As we discussed, we’re looking right now to recover 200 collateralized shares of RIOT. This is going to be the fastest way, ultimately, to turn the money faucet back on. $1200-1300 between the two contracts, but then I can collateralize for about $220/week, so $440/week. And this time if the price shoots up I’ll be ready for it.

We’re also putting points into our SNDL tree, utilizing calls/puts to essentially pay ourselves 10-20% interest. I like to start by selling at the Ask, or even higher if I’m feeling lucky. It takes longer to sell, but honestly by the end of the day I usually see it gone. Now if it’s like, Tuesday, I’ll go 10% by the end just to get it. Wednesday is too late to try to snag extra percents.

We’ll look to increase our holdings of CODX to at least 100 shares (obviously). At which point I’ll look to acquire 300 more shares of anything. Probably CODX, but we’ll see.

Dividends, sweet sweet dividends. We want, in a perfect world, to collect dividends every single day. Most stocks that pay dividends pay quarterly, but some like STAG pay monthly. Depending on how much you enjoy micromanaging, you could opt to hold a group of 7-ish stocks that you buy/lock in dividend/sell for profit. (Or just own 90 stocks with different ex-div dates. It’s recommended that you not have calls written for stocks with an approaching ex-dividend date. Unless you specifically want them to get called)

Speaking of dividends, The American Conservative Values Fund, ACVF just paid out. Nice! Even more reason to buy this fund. The ex-date was…I think the 17th? 23rd maybe. I’m not about to look it up, that’d be ridiculous. (If you’re reading this in the future, ACVF was a new ETF and had no dividend history yet).

So to narrow ourselves down a bit, we’ve started a New Game with the immediate task of restoring all of the RIOT to cash-producing status. We’ll harness SNDL and CODX early on to that end. By the end of the second Chapter we should be onto dividend farming. (Once being at work is back to being 100% optional). Before finishing Disc 1, we’ll want to pad out all current holdings to minimum 100 shares. This does not include our $1 invested into Tesla.