Options and real estate wedlock - a beginner level trade on a real estate backed asset

[wamcp]

YOU ARE DOWN A MILLION IN THIS 1 month from all time high?!?!???!?!

I’m down 26k and i can’t stop staring at the market. Even that’s been depressing.

Are you constantly worrying about the markets? I know i do. Do you feel constantly stressed about your positions? I sometimes do when I’m heavily concentrated in 1 or 2 positions that are single stocks.

It can be stressful but it feels mostly fine even I take a -200K plunge in a single day, because my account has grown to be nearly all "house money". Just pure trading profits and it's not really from saving job income. Now that's not the right mentality to approach trading as it leads to reckless risk taking which I admit to over the past couple greedy months, but it's true.

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[wamcp]

So what exactly are you doing?

how many days to expiration?

how far are you keeping your strikes? What probability of winning are you usually going for?

How much money are you keeping in margin maintenance excess to avoid any margin call?

Are you able to relax on a day where spy is negative 1-2 percent and your account is negative 30-50k?

Are you closing at 40-50 percent profit?

How are you salvaging your losing trades?

Do you avoid selling puts around earnings?

4 years ago, i posted my first ever post regarding selling puts. At that time, you had said a lot of wise words which i didnt even understand at that time. You were also one of the only few people who fundamentally supported the concept of selling puts and understood exactly what my post was about. So yeah… glad to see that you’re killing it.

I usually just close out and eat the loss immediatley if i face a losing trade. I do trade short puts on earnings for the volatility crush. I've played as short as 1 week DTE to as far as (currently) >1 year expiry.

I have never been margin called, currently I have 870K available. I'm actually planning to close out all leverage tomorrow, after META's destruction in earnings today. I have short puts in META, AMZN, GOOGL, MSFT. (You can reference my 'unrealized gain' screenshot above which displays my current positioning.) And own shares in AMZN currently. I'm leveraged about 5 : 1 by notional value.

Tomorrow i'm going to close out all my short puts and I will plan to just hold pure AMZN shares for now as I'm rapidly deleting my excess profits YTD over this past month. So i plan to be completely deleveraged in the morning.

 

[wamcp]

Yea I should have been a little more clear. I was talking about his SCMI position as it seems like his naked puts are all smaller bets on positions outside of pure stock big bets on SMCI and AMZN.

Am I reading that first pic correctly? He had a total cumulative cost basis of 13.8 and proceeds of 14.2 for a realized gain of about $400k?

I assume that "W" next to those numbers means wash sales were baked into those figures?

Does that mean he was swinging in and out of pure stock positions? Or also selling naked puts on the underlying and this happens to be the total tally of all those options trades? @wamcp If it's the former, tell us how you approached that!

Yes I traded in and out of SMCI and other shares of other stocks like CRWD or ZS, META etc.
And also traded in and out of short naked leveraged puts on various tickers.
I traded very heavily each day, but now I do it far less.
I racked up I think paying about -$200K in commission/fees in 2023 across the two brokerages.

 

[HemorrhagicShock]

Yes I traded in and out of SMCI and other shares of other stocks like CRWD or ZS, META etc.
And also traded in and out of short naked leveraged puts on various tickers.
I traded very heavily each day, but now I do it far less.
I racked up I think paying about -$200K in commission/fees in 2023 across the two brokerages.

Did you have a handful of swing and intraday strategies to time those SMCI entries and exits?

Maybe some combination of indicators and other TA?

What made you choose to do pure shares for your SMCI and AMZN positions rather than selling puts?

I'm only familiar with direct shares trading since that's what I spent two years doing during the pandemic (intraday and multi-day swing momentum trading, entries and exits based on supports/resistances along with a volume analysis approach I came up with)

 

[cyanide12345678]

I usually just close out and eat the loss immediatley if i face a losing trade. I do trade short puts on earnings for the volatility crush. I've played as short as 1 week DTE to as far as (currently) >1 year expiry.

I have never been margin called, currently I have 870K available. I'm actually planning to close out all leverage tomorrow, after META's destruction in earnings today. I have short puts in META, AMZN, GOOGL, MSFT. (You can reference my 'unrealized gain' screenshot above which displays my current positioning.) And own shares in AMZN currently. I'm leveraged about 5 : 1 by notional value.

Tomorrow i'm going to close out all my short puts and I will plan to just hold pure AMZN shares for now as I'm rapidly deleting my excess profits YTD over this past month. So i plan to be completely deleveraged in the morning.

Did you basically go 1 year out because vix became decently high?

Why would you do that when theta decay is extremely inefficient when > 1 year out. I used to do these, but now i am very conscious about not going over 90 days.

 

[cyanide12345678]

I usually just close out and eat the loss immediatley if i face a losing trade. I do trade short puts on earnings for the volatility crush. I've played as short as 1 week DTE to as far as (currently) >1 year expiry.

I have never been margin called, currently I have 870K available. I'm actually planning to close out all leverage tomorrow, after META's destruction in earnings today. I have short puts in META, AMZN, GOOGL, MSFT. (You can reference my 'unrealized gain' screenshot above which displays my current positioning.) And own shares in AMZN currently. I'm leveraged about 5 : 1 by notional value.

Tomorrow i'm going to close out all my short puts and I will plan to just hold pure AMZN shares for now as I'm rapidly deleting my excess profits YTD over this past month. So i plan to be completely deleveraged in the morning.

Good for you for deleveraging when you are far ahead.

3.4 million by age 34 is impressive as hell.

Though tomorrow will likely be rough for you with your tech heavy portfolio.

By the way, public.com may be introducing naked puts soon, and they state that they will pay 18 cents per contract - essential give you half their earnings for order flow. So not only do they not charge a commission, they’ll pay you on top.

Their platform is pretty useless right now since it has no naked position contracts, but they will soon have it. If you paid 200k in commissions, you literally could walk away with thousands of dollars through reduced commissions.

Btw…. Are you paying 0.15 per contract or 0.65? If you’re paying 0.65 per contract then you should be calling those guys and telling them to give you a better rate or you’re leaving.

 

[cyanide12345678]

Did you have a handful of swing and intraday strategies to time those SMCI entries and exits?

Maybe some combination of indicators and other TA?

What made you choose to do pure shares for your SMCI and AMZN positions rather than selling puts?

I'm only familiar with direct shares trading since that's what I spent two years doing during the pandemic (intraday and multi-day swing momentum trading, entries and exits based on supports/resistances along with a volume analysis approach I came up with)

One of the few ways to create immense wealth is by heavy concentration.

Selling puts would normally not give you 100-200 percent gains. They are slower, smaller, and usually more consistent gains especially if far out of the money.

For example - when meta was $90, i had 240 contracts on it. Would have made so so so much more if i had just gone all in and bought shares.

Similarly - when mpw was $3, i had some 1600 contracts on it - made 42k on those. But if i had gone all in with 700k, i would have made 350k in 2 months.

Puts limit losses, it’s a risk limiting strategy, protects downside at the expense of an upside. But it can be consistent growth.

 

[wamcp]

Did you basically go 1 year out because vix became decently high?

Why would you do that when theta decay is extremely inefficient when > 1 year out. I used to do these, but now i am very conscious about not going over 90 days.

Taxes. I wanted long term cap gains at the time i entered these positions. Bad idea

 

[wamcp]

Did you have a handful of swing and intraday strategies to time those SMCI entries and exits?

Maybe some combination of indicators and other TA?

What made you choose to do pure shares for your SMCI and AMZN positions rather than selling puts?

I'm only familiar with direct shares trading since that's what I spent two years doing during the pandemic (intraday and multi-day swing momentum trading, entries and exits based on supports/resistances along with a volume analysis approach I came up with)

for smci: shares because the spreads are too wide for options to my liking for the sizing i wanted

For amzn: shares with intention to hold for a year (try to get long term cap gains)

 

[cyanide12345678]

Taxes. I wanted long term cap gains at the time i entered these positions. Bad idea

Selling naked puts even 1 year in advance does not get you long term capital gains, I’ve looked into this. There’s no point in holding a put > 1 year from a tax perspective.

The only way to get long term capital gains on 60 percent of your profit is to sell puts on rut,spx, and whatever the qqq index was. In the case of put selling on indexes like spx and rut, hold time can be 1 second, but you’ll still get 60 percent long term capital gains.

RUT Index Options

www.cboe.com

S&P 500 Index Options

www.cboe.com

How Are Futures and Options Taxed?

Learn about the U.S. tax processes of futures and options.

www.investopedia.com

 

[wamcp]

Selling puts even 1 year in advance does not get you long term capital gains, I’ve looked into this. There’s no point in holding a put > 1 year from a tax perspective.

The only way to get long term capital gains on 60 percent of your profit is to sell puts on rut,spx, and whatever the qqq index was. In the case of put selling on indexes like spx and rut, hold time can be 1 second, but you’ll still get 60 percent long term capital gains.

RUT Index Options

www.cboe.com

S&P 500 Index Options

www.cboe.com

How Are Futures and Options Taxed?

Learn about the U.S. tax processes of futures and options.

www.investopedia.com

Well. Today i learned. Cost of ignorance/assumptions!

 

[cyanide12345678]

Well. Today i learned. Cost of ignorance/assumptions!

tough day.

Meta missed q2 guideline expectations
Ibm missed
Gdp growth dropped in half of last quarter - 3.4 -> 1.7 (vs 2.4 expected)
Core Pce 3.7 vs 3.4 expected - up from 2

#stagflation

 

[HemorrhagicShock]

Yikes, opened up my brokerage accounts and it looks like my avatar picture to the left!

Terrible.

This is where I like to hunt for opportunities.

 

[wamcp]

tough day.

Meta missed q2 guideline expectations
Ibm missed
Gdp growth dropped in half of last quarter - 3.4 -> 1.7 (vs 2.4 expected)
Core Pce 3.7 vs 3.4 expected - up from 2

#stagflation

With the positive after hours reaction to MSFT GOOGL, my account is now only down -57K for the day. I call that a victory, considering META’s disaster!

 

[cyanide12345678]

With the positive after hours reaction to MSFT GOOGL, my account is now only down -57K for the day. I call that a victory, considering META’s disaster!

ONLY 57k 😂🤣🤣🤣🤣

Down 3700 today lol. You’re in a different league of risk tolerance.

 

[Apollyon]

I have an analogy to give. People that are talking thousands, not millions, say "you can't do it; why wouldn't the big guys be doing it?", because naysayers gonna naysay. So, I play this Star Trek game. One currency is latinum. There's mining for it, to refine it. But, there's a "better" one, concentrated latinum. The returns are 7x better, for the same amount of time. It's not cost effective to mine the lat, if you can refine the conc lat.

The people making individual gains might be a rounding error for the big guys. It's not worth their time.

So, you'll notice, I'll never call it "a lottery" or say "you got lucky" or screech "you can't do it!" Because, indeed, it's done!

 

[wamcp]

ONLY 57k 😂🤣🤣🤣🤣

Down 3700 today lol. You’re in a different league of risk tolerance.

In the context of 57k down for 3500k net worth- that’s only a -1.6% drop 😆

 

[cyanide12345678]

In the context of 57k down for 3500k net worth- that’s only a -1.6% drop 😆

My net worth is at 2M.

I somehow find myself more and more anxious about money now that my net worth is growing. It feels like there’s more to lose now, the stakes are higher.

The nicest 1 day unrealized loss i had was around 40-50k. I was at work, could barely concentrate.

Nowadays 5-10k negative days make me anxious. I’m losing my risk tolerance as I’ve made money.

 

[wamcp]

My net worth is at 2M.

I somehow find myself more and more anxious about money now that my net worth is growing. It feels like there’s more to lose now, the stakes are higher.

The nicest 1 day unrealized loss i had was around 40-50k. I was at work, could barely concentrate.

Nowadays 5-10k negative days make me anxious. I’m losing my risk tolerance as I’ve made money.

Hmm. Don’t know your situation, for me I think i’d be very uptight if i had spent 30 years saving and investing and going to retire soon. I wouldn’t have the same risk tolerance as today for sure

I been thinking about my portfolio management plan when i do retire in a couple years. Probably staying in cash and selling safe OTM cash secured puts on SPY or something.

 

[GassYous]

My net worth is at 2M.

I somehow find myself more and more anxious about money now that my net worth is growing. It feels like there’s more to lose now, the stakes are higher.

The nicest 1 day unrealized loss i had was around 40-50k. I was at work, could barely concentrate.

Nowadays 5-10k negative days make me anxious. I’m losing my risk tolerance as I’ve made money.

Buy bonds and mmf I guess

 

[cyanide12345678]

Round 2 of mpw:

Locked and loaded with significant increase in position size when steward finally declared bankruptsy. Earnings also coming in, so kind of expecting a clear game plan to be laid out about the replacement of steward with other operators. The steward bankruptsy filing documents actually have stated there are multiple interested parties and one official letter of interest.

Holding 1225 $3 strike contracts, july expiration. Took a hit on the day steward bankruptsy news came out, but if earnings go well, this will more than make up for it. If earnings don’t go well - oh well, delayed gratification, i feel good about $3 strike because of how well it held when things were much worse.

Had 700+ lyft contracts today that were all cashed out - up 13k on lyft today after a volatility crush after earnings went well. The lyft premium collapsed so much that i closed all holdings and went back in ewz, and increased arkk holding size. Went from my biggest loser (negative 8k) to my 3rd biggest winner today.

Sitting at 11% ytd gain. If things go well, should add another 5-6 percent gain in 2 months and 10 days.

Let’s go mpw 🤣🤣🤣🤣

 

[Groove]

I'm easing my way back in. Still about 75% cash but have about 25% invested. Still watching the market closely. Ultimately, I'm just trying to be patient as none of my entry criteria are green, so I'm just playing it by ear. About 29% gain YTD down 7% past month.

Also, I'm thinking about buying a new house and putting some money down that I intend to take out of my non tax deferred brokerage account so I'm paranoid I'm going to wake up and be down 20% in that account if I just go guns blazing in a market that just had a 5% pull back and has not yet revealed its medium term intentions.

 

[TooMuchResearch]

My net worth is at 2M.

I somehow find myself more and more anxious about money now that my net worth is growing. It feels like there’s more to lose now, the stakes are higher.

The nicest 1 day unrealized loss i had was around 40-50k. I was at work, could barely concentrate.

Nowadays 5-10k negative days make me anxious. I’m losing my risk tolerance as I’ve made money.

Don't increase your bet size as your portfolio grows.

If the swings are making you uncomfortable, you're betting too big.

 

[valianteffort]

asleep at the wheel and missed the ride up. going to roll the dice on the ride down 🫡

but

 

[thegenius]

asleep at the wheel and missed the ride up. going to roll the dice on the ride down 🫡View attachment 386744 but

Yippers
RDDT 25K premium
GME 46K premium
AMC 76K premium

Good luck man! Putting 150K on shorting shiitcos. Just hold to expiration please as IV crush will F you on some of those while you are riding the stock prices down.

The thing with GME...the last time in 2021 it went really high, it took an awful long time for it to come down. I don't like selling call credit spreads that expire months in the future, but it's probably a safer play

You going to sell nearterm puts to help finance those long positions?

 

[valianteffort]

Yippers
RDDT 25K premium
GME 46K premium
AMC 76K premium

Good luck man! Putting 150K on shorting ****cos. Just hold to expiration please as IV crush will F you on some of those while you are riding the stock prices down.

The thing with GME...the last time in 2021 it went really high, it took an awful long time for it to come down. I don't like selling call credit spreads that expire months in the future, but it's probably a safer play

You going to sell nearterm puts to help finance those long positions?

You are right in that GME took a long while to come down. I just didn't have the cajones to buy short term puts even though I have a feeling CPI will bring the market down tomorrow however meme stocks don't follow the rules. We'll see what happens but in 2-4 weeks time I may decide to take some profit (I have my target numbers) vs letting it ride. Although GME may rocket back up, it will come down. It must come down. IV crush is high but I anticipate a quicker downfall than last round.


Wasn't planning on selling near term puts. Whats another year of attending life to finance these positions? YOLO.

 

[skougess]

It’s seriously wild to me that at this income level you guys gamble this recklessly.

 

[valianteffort]

It’s seriously wild to me that at this income level you guys gamble this recklessly.

Although there is some risk, note that leap options carry significantly less risk and at my age it’s a risk I’m willing to take. Selling and rolling puts on MPW when at near all time lows like OP posted to me is extremely minimal risk with high upside. Buying puts on a stock with a PE ratio of 1200 that expire in Jan 2025 is low risk to me. A meme stock can not sustain levels like this for 8 months. Possible, not probable. These aren’t weekly or ODTE gambles.

 

[skougess]

Although there is some risk, note that leap options carry significantly less risk and at my age it’s a risk I’m willing to take. Selling and rolling puts on MPW when at near all time lows like OP posted to me is extremely minimal risk with high upside. Buying puts on a stock with a PE ratio of 1200 that expire in Jan 2025 is low risk to me. A meme stock can not sustain levels like this for 8 months. Possible, not probable. These aren’t weekly or ODTE gambles.

Yeah I dunno. I just have no room in my portfolio for speculative investments. I go to Vegas with $300 in my pocket if I want to indulge that, not my brokerage accounts.

This is like scratch off lottery tickets for the wealthy. Which begs the question, why??

 

[thegenius]

It’s seriously wild to me that at this income level you guys gamble this recklessly.

Although there is some risk, note that leap options carry significantly less risk and at my age it’s a risk I’m willing to take. Selling and rolling puts on MPW when at near all time lows like OP posted to me is extremely minimal risk with high upside. Buying puts on a stock with a PE ratio of 1200 that expire in Jan 2025 is low risk to me. A meme stock can not sustain levels like this for 8 months. Possible, not probable. These aren’t weekly or ODTE gambles.

Dude ... it's a lot of money. 150K premium spent shorting three absolutely terrible companies.

Look at GME for example. You have a 50 put with a break even of 27. That's a 44% drop. You need a minimum of a 44% drop to make money on those puts.
The last time GME spiked huge like this was the week of Jan 25, 2021. Now..it opened at 24, had a high of 120, and closed at 81. Let's say puts were bought sometime when spot was between 60-80, so call it 70. For the REST OF 2021 it oscillated between 35-50. That's only a 29 - 50% drop OVER ONE YEAR! There was a brief moment in February where it dropped considerably and one would have made money. But it immediately shot back up and really had a hard time coming down the entire year. So in 2021 it dropped 29-50%, and you need a 44% drop to make money. And that's at expiration and excluding vega fookery that will affect your long position.

So yea spending 150K on this is a shiit ton of money. spending 15K...yea that I can see. But you are spending 1/3 of your yearly earnings on shorting shiitcos as I call them.

Also why I think it's better to short GME by selling long term calls or call spreads. If the option chain beefs up there will be 100 spot strikes and one could sell a 100c, say...6 months out. (or a call spread). Or even better...just short the actual shares then you don't have to worry about the greeks.

 

[valianteffort]

Dude ... it's a lot of money. 150K premium spent shorting three absolutely terrible companies.

Look at GME for example. You have a 50 put with a break even of 27. That's a 44% drop. You need a minimum of a 44% drop to make money on those puts.
The last time GME spiked huge like this was the week of Jan 25, 2021. Now..it opened at 24, had a high of 120, and closed at 81. Let's say puts were bought sometime when spot was between 60-80, so call it 70. For the REST OF 2021 it oscillated between 35-50. That's only a 29 - 50% drop OVER ONE YEAR! There was a brief moment in February where it dropped considerably and one would have made money. But it immediately shot back up and really had a hard time coming down the entire year. So in 2021 it dropped 29-50%, and you need a 44% drop to make money. And that's at expiration and excluding vega fookery that will affect your long position.

So yea spending 150K on this is a shiit ton of money. spending 15K...yea that I can see. But you are spending 1/3 of your yearly earnings on shorting shiitcos as I call them.

Also why I think it's better to short GME by selling long term calls or call spreads. If the option chain beefs up there will be 100 spot strikes and one could sell a 100c, say...6 months out. (or a call spread). Or even better...just short the actual shares then you don't have to worry about the greeks.

44% to be in the money at the time of expiration. A long ways away. I have the possibility of GME crashing down this week or next week or the month after. Even a 20% drop tomorrow will raise my option value thousands. With the remaining IV and time the overall option could be up this week, next week, or soon. A cash out at that time is reasonable.

 

[cyanide12345678]

Although there is some risk, note that leap options carry significantly less risk and at my age it’s a risk I’m willing to take. Selling and rolling puts on MPW when at near all time lows like OP posted to me is extremely minimal risk with high upside. Buying puts on a stock with a PE ratio of 1200 that expire in Jan 2025 is low risk to me. A meme stock can not sustain levels like this for 8 months. Possible, not probable. These aren’t weekly or ODTE gambles.

Yeah selling mpw puts definitely was minimal risk. Definitely has paid off. Though I’m really going to be milking mpw for a little bit longer. I have 1100 contracts on MPW for $3, I'll be rolling to $3.5 strike sooner or later whenever there's a highly negative day. I also took todays huge increase in price as an opportunity to open a strangle and added 300 calls at $9 strike. Should be able to squeeze out another 10-12k out of MPW in another 2 months.

Ytd mpw has made me 51k so it definitely paid off. The thesis eventually proved correct - Just needed A LOT of patience.

As far as you buying puts is concerned, while in theory I agree that there's 100% going to be a bust where the GME/AMC plummet, and theoretically a leap should mitigate for that risk, but for all you know it might go up 200% before massively plummeting. If in fact it does go up 200%, you could be looking at unrealized losses of tens of thousands of dollars. If you have the balls to hold through that, then yes, you could make a lot of money, assuming this meme mania doesn't last as long as last time - I think it almost took a year to go back to fair value for these meme stocks last time - and that's a big risk for you.

While I'm also making a play on this very high volatility, but in typical cyanide fashion, I'm mitigating risk, playing it EXTREMELY safe, and making sure I get small wins. Today, I sold 100 $2.5 strike AMC puts with 10 Days to expiration. Got $5.5 on average per contract = 5.5/244.5 = 2.2% return in 10 days cash covered. 2.5 is the price below where AMC was hovering prior to the rise - So extremely safe given this new buying interest that will likely buy each dip. I mean...2% in 10 days with 70% downside protection from current price is as low risk as it gets - yet 2% in 10 days is essentially 70% annualized lol - not a bad return eh? I'm going to keep rolling my position 1-2 weeks forward every time I hit 40-50% profitability. Should be able to squeeze out a few thousand dollars.

I'm up 13% so far this year with YTD gain of 93k and on track towards gaining 120k by july. I'll keep taking my small risk mitigated wins rather than trying for a home run. Not looking for glory. Just small risk adjusted wins.

See attached for current portfolio and current YTD gains

 

[cyanide12345678]

Yeah I dunno. I just have no room in my portfolio for speculative investments. I go to Vegas with $300 in my pocket if I want to indulge that, not my brokerage accounts.

This is like scratch off lottery tickets for the wealthy. Which begs the question, why??

It's not really the equivalent of gambling. It's based on sound theory which will absolutely come true. When meme mania will fade, prices will drop. Someone who has bought puts will absolutely benefit from that.

The problem though is figuring out when the drop happens. Now that's the gambling part. Hence I always SELL contracts and receive premium, as I don't want to be paying for theta decay. I want time to be in my favor - not against me. When you do it that way, it's not necessarily a lottery ticket - Just a very educated guess.

For example - lets say you think AMC is a crappy stock - which it is. Fundamentals are terrible. And you think the fair market value is $3. But you know that this meme mania might mean the stock will be above $3 for weeks, if not a few months, then you could sell May 31st $3 puts as an example - 16 days to expiration. $20 per contract = $20/280 = 7% return in 2 weeks. I mean...is this trade really gambling? There's a very high chance of success if you ask me. So is it really gambling?

 

[cyanide12345678]

asleep at the wheel and missed the ride up. going to roll the dice on the ride down 🫡View attachment 386744 but

By the way....

GME and AMC are crap stocks. I know that. But I wouldn't be betting against RDDT. Fundamentally that stock is extremely strong. Just read the last quarterly report. They smashed earnings significantly above expectations. Their growth rate for users, revenue was definitely incredible. This is a growth stock. The P/E doesn't matter here. Their fair value will be based on their price to sales. A 10 X multiple of revenue when growing at 40% isn't as ridiculous as you would think.

Read this:

Reddit Announces First Quarter 2024 Results

Record user traffic, Daily Active Uniques (“DAUq”) increased 37% to 82.7 million Revenue increased 48% to $243.0 million, nearly doubling growth rate from prior quarter Net loss driven by IPO expenses, first profitable Q1 on an Adjusted EBITDA basis Operating cash flow of $32.1 million and...

investor.redditinc.com

 

[valianteffort]

By the way....

GME and AMC are crap stocks. I know that. But I wouldn't be betting against RDDT. Fundamentally that stock is extremely strong. Just read the last quarterly report. They smashed earnings significantly above expectations. Their growth rate for users, revenue was definitely incredible. This is a growth stock. The P/E doesn't matter here. Their fair value will be based on their price to sales. A 10 X multiple of revenue when growing at 40% isn't as ridiculous as you would think.

Read this:

Reddit Announces First Quarter 2024 Results

Record user traffic, Daily Active Uniques (“DAUq”) increased 37% to 82.7 million Revenue increased 48% to $243.0 million, nearly doubling growth rate from prior quarter Net loss driven by IPO expenses, first profitable Q1 on an Adjusted EBITDA basis Operating cash flow of $32.1 million and...

investor.redditinc.com

Appreciate your thoughts on RDDT and love to see others perspective! I love this PUT option the most out of all of them. I think my prediction on its demise (as in hitting the 30s again at some point between now and Jan 2025 now to double my money - not a bankruptcy) is based off its guidance. Here are a few reasons why. I understand its growth was amazing this past quarter compared to last year and the previous quarter. However, they are guiding for the exact same revenue next quarter and EBITDA. The big growth occurred and now and to me is priced in for a stock that is failing to make a profit in a high interest rate environment. Even profitable stocks are getting punished. Predicted yearly profit is in 2026 or so. 48% year over year revenue growth but taking a look at upcoming quarter over quarter will they be able to say this is still a growth stock if guidance is accurate or dare I say a miss? The gap down for a growth stock for losing its growth story AND making no profit can be huge. Lets assume they beat that guidance again with growth, however guide the same values again. I do believe the stock has to be punished some even for this with a price in the 60s. My break even is around 47 or less. Insiders sold huge amounts in the 10s of millions at a stock price of 32. Im sure this was preplanned but I strongly believe reddit is riding an IPO hype train and I will reload puts if it gets back to 70s again as well.

One additional note, RDDT rallied the last 2 days because of GME and AMC. An immediate reversal when GME and AMC fall is imminent.

 

[cyanide12345678]

Appreciate your thoughts on RDDT and love to see others perspective! I love this PUT option the most out of all of them. I think my prediction on its demise (as in hitting the 30s again at some point between now and Jan 2025 now to double my money - not a bankruptcy) is based off its guidance. Here are a few reasons why. I understand its growth was amazing this past quarter compared to last year and the previous quarter. However, they are guiding for the exact same revenue next quarter and EBITDA. The big growth occurred and now and to me is priced in for a stock that is failing to make a profit in a high interest rate environment. Even profitable stocks are getting punished. Predicted yearly profit is in 2026 or so. 48% year over year revenue growth but taking a look at upcoming quarter over quarter will they be able to say this is still a growth stock if guidance is accurate or dare I say a miss? The gap down for a growth stock for losing its growth story AND making no profit can be huge. Lets assume they beat that guidance again with growth, however guide the same values again. I do believe the stock has to be punished some even for this with a price in the 60s. My break even is around 47 or less. Insiders sold huge amounts in the 10s of millions at a stock price of 32. Im sure this was preplanned but I strongly believe reddit is riding an IPO hype train and I will reload puts if it gets back to 70s again as well.

One additional note, RDDT rallied the last 2 days because of GME and AMC. An immediate reversal when GME and AMC fall is imminent.

Premarket negative 9 percent amc. Negative 10 percent gme. Negative 3 percent rddt. Looks like you’re about to make a decent chunk of money. What profit percentage do you plan to sell and close at?

On the other hand, I’ll probably increase my $2.5 strike 9 day position if premium spikes up a lot.