2020.10.17

Cash secured putt pun dad joke golf trading investments

So last time I let people offer to buy my shares at a higher price than I paid, taking guaranteed money and keeping the collateral if the share price doesn't go high enough.

The other basic theta gang play is offer to purchase shares if they drop below a certain price. This can be done in a naked/yolo way, it can be done in a leveraged way, or it can be done by letting your broker hold on to your money for a bit.

With volatility as it is and the prospect of having chunks of cash hamstrung but idle (this is a really dumb view on being in cash), I didn't really pay attention to CSPs until I was looking for stocks to sell covered calls for. Like the CC is a better way to do a limit sell, a CSP is a better way to do a limit buy.

Letís assume stock XYZ is currently trading for $96 per share. You would like to buy 200 shares of stock XYZ if it drops to $90. You could place a GTC limit order to buy 200 shares at $90 and wait to see if you buy the shares. Or, you could sell two XYZ 90 puts at $2.25 and collect $450 (2 X $2.25 X 100 = $450) on your willingness to buy 200 shares at $90. With the cash-secured put, you can generate additional returns in your portfolio by collecting a premium minus commission for your willingness to be obligated to buy a stock at a price that is below current market.

The etrade explanation covers the acquisition approach. Degenerate options traders seem to avoid assignment like the plague.
My first CSP


AMD is pretty strong and announced a Xilinx acquisition (more or less the extent of my DD), so it seemed like a put I wouldn't mind getting exercised. At $83-ish bucks I sold a $78.50 put, also not minding if it stayed out of the money and ended up being just $200 in the clear.


I could have timed the volatility better (more volatility -> higher premiums, typically). The underlying share price also dipped during this week's market downturn.


Thirteen days from expiration, it's still well OTM. Earnings is between now and then, so it wouldn't be great if they did a FSLY.

Scenarios:
Like covered calls, I must have faith that the underlying won't drill (or pay to hedge). And that's why I chose an expiration before November.



2020.10.10

Star Wars Squadrons tactics wingman

A little starfighter chat and then my next iteration in trading. I passed pilot level 15 after maybe a dozen dogfights and fleet battles, that doesn't intrinsically mean much except in the context of unlockables. I have most of the mods I want, leaving a few to acquire for tuning and experimentation. And I've acquired some fun cosmetics like the Twi'lek skin and some neat fighter paint jobs. I'm pretty happy with the rate of unlocks, though it'd be neat to have more variety in cosmetics.

Having played some higher-level ranked matches, I'm still impressed with the combat mechanics and balance, really the only thing that's OP is teamwork.

Damn, that sounds like a motivational poster.


Chris
The only thing that is OP is TEAMWORK.

Star Wars Squadrons attack on Star Destroyer luiscarlos

I previously described fleet battles mode as "an adaptation of the Battlefield model". That's somewhat true, however the presence of "squishy" and buff AI units, support builds, and castle keep analogues made me realize the obvious - it also follows a team brawler formula. So, really, props to the developers for adapting both models to an X-Wing game. It works well but, as I previously said, takes the chaos of (WWII-inspired) dogfighting and the rules of a combat simulator and funnels them into a script.

Star Wars Squadrons Star Destroyer assault ship destroyed

Even if it was poorly-balanced (or only available vs AI), a sandbox fleet combat mode would be great. And battles with several factions.

If any game deserves a 1.5 while still feeling like a complete experience, it's this one.

Covered calls for stable growth

Exit take profit investment meme

Check it:
  1. Basic info for anyone who invests in mattress (not PRPL)
  2. How a covered call works
  3. How a covered call compares to other conservative investment strategies
So, holding equities forever will take advantage of the "stocks only go up" principle. You might also get dividends. It's zero-maintenance but if the price only goes right you've just been beaten by inflation. You've also been hit with the opportunity cost of squirreling that money away.

My wealth has come from a combination of living in America, some lucky genes, and compound interest.
- Warren Buffet

Buying, holding, and never selling is basically the opposite of what made Warren Buffet a gazillionaire (over a period of 99 years). It's rolling a rock down a hill vs rolling a snowball down a hill.

Lazy profit-taking

The slightly-more-active approach to bull market investing is the set a limit sell price: "I'm buying 10 shares of NVDA at $500 and telling my broker to sell when it hits $550". You'll get an email when your $5,000 investment has turned into $5,500 and it's hopefully sooner than retirement. You might miss out on NVDA going to $600, or be protected against it going to $557 before spending an eternity below your purchase price. You take profit at some undefined point in the future and can then re-invest and earn Warren's approval.

The covered call


A while back, Dad told me to get approved for options trading so I could start buying covered calls. That sounded frightening, but he knows his stuff. It took me a long time to get around to it; I think we had the discussion in 2011 or so. In retrospect that would have been a really, really good time to start. After seeing how basic options trading works and wanting to check out theta gang, I tried a few CCs out.

Covered calls are basically you getting paid $15-$500 per hundred shares to set a limit sale price. Not-brother-Jon sent me a good explainer, but I'll break it down here:

One little detail

To quote Papa Buffet again:

Rule #1: Never lose money.
Rule #2: Never forget rule #1.

Covered calls are a stable growth strategy that aligns with the principles of stackers and FIREfolk. It can be derailed by a bear market, but you could absolutely apply this approach to inverse ETFs. It does, however, require that you can put underperforming investments on ice or sell them before they nosedive. This isn't a killer disclaimer that makes this information worthless, at worst it's identical to investing in mattress or whatever your ESPP is. As we'll see, it can also help offset losses when fortunes turn against you.

But it's key to remember this doesn't work with the Portnoy Scrabble bag strategy (I'm not even going to link this stupidity). Like with owning any stocks or ETFs, you need to have some faith that the company will grow in the short or long term. If you keep making that compound interest and avoid risky buys, you'll be on the Buffet track (as long as you're American and have good genes).

What does this look like irl?


Here's what calls look like in etrade for that In-Q-Tel company Palantir. Weird choice? I decided to use PLTR for a couple reasons:
Anyway, so I could invest $1,000 to buy 100 shares of PLTR at $10. If I wanted to make it part of a covered call, I could give some random person or investment firm the option to buy my new shares if they exceed a certain price by a certain date. So on the left I have a two week time window where if we agreed upon a $12.50 sales point, they would pay me between $0.10 and $0.15 of premium per share (so $10-$15 for the 100). The exact price is like any bargaining, the bid/ask values are what etrade knows from identical transactions.

Thirteen-ish bucks is not a lot of premium money and arguably not worth my time, but it sort of makes sense; what are the odds PLTR will jump by more than 25% in two weeks? Now, I could scale this investment up to make it more worthwhile, or take comfort in the Buffet principle that in two weeks I could flip these modest gains into another investment. But I can also choose a different price/date combination to increase the premium.

What if we looked seven months out? That's a pretty big time window to hit $12.50, so a buyer is willing to pay $220-$225 for the agreement. That's not bad for me, it's a couple hundred bucks just to effectively set a limit sale price on my shares!

Wait. Why would anyone pay me this money? Simple, they think PLTR will be at $15 or $20 or $25 within that time frame. If it is, they have an agreement with me to take my shares for a mere $12.50 and potentially flip them for a considerable profit. But that's buying calls and that's for speculators. We're here to make compound interest.

Let's compare some apples to apples

What does this mean? Covered calls are a low-risk, low-reward alternative to stacking shares and putting in limit sell orders. Basically, when buying stocks you should (at least consider) putting in a limit sell, but you should really consider writing a covered call. Like any trading, covered calls aren't guaranteed money (except the premium!), but they're generally better than their peers. Let's consider the scenarios in a six month window, you have $1,000 to invest in something low-risk, you're thinking:

So what happens if the share price (green, secondary axis) fluctuates a bit but stays around $10? Your bond pays its $30 barring anything dire. The limit order doesn't hit because the share price never reached $14, so you're enduring the same fate as people who buy stocks for retirement. Likewise, since neither call was exercised, you're still holding the stocks and ride the fluctuations where the cheaper, biweekly contracts slowly pull away from the limit order and you end up pocketing about $150 in premiums. The six month covered call starts $180 in the green and ends that way - the call expired and you still have the shares, but had $180 to reinvest immediately.


Stocks sometimes go down, here we'll say PLTR loses a painful 20%. In this case, the bond looks good because it actually made money, but that six month call almost covered your losses with the premium paid by a sad call holder. The biweekly strategy comes in a little worse off, though I should say that I was using the same premiums for each two week period. The limit/mattress strat? Down 20%.


What if PLTR pumps 50% to $15/share? Well, the bond holder looks like a sucker. The limit order hits at $14 and you make a hefty $400 on a $1,000 investment and have $1,400 in cash even before the six months is up (reinvestment opportunity). Not bad, and it's good you put the limit order in before the share price has a chance to correct. The biweekly contract exercises at $12.50 and you walk away with $1,350 and potentially more time to reinvest - depending on the choice of the option holder. It should be noted that biweekly premiums would likely get much better as the share price climbed toward that $12.50 value, you could also adjust your strike price each time. Like the limit sell, the six month call is exercised some time between the $14 point and the expiration date, but you walk away with that $1,400 and the premium for a limit-beating $1,580.


There's one more scenario: the share price increases, but doesn't hit the strike price. The call holder doesn't get to exercise at $12.50/$14 so you keep stock that has gained value and you pocketed the premium. Everything is great in this scenario, but again the covered calls come out ahead.

Whoa, okay, what are the downsides?

Well, you don't want a $15 premium to tempt you into buying 100 shares of a stock that's going to drill. Don't accidentally uncover your position by selling your shares while the call is outstanding. And of course this requires some level of active trading. That's all I can think of, but I'm not a financial advisor and this is not financial advice. Did I do that right?

I followed all that, what else?

To reiterate, as long as the stock goes up, this pays out three ways: the difference between your strike price and purchase price, the premium, and any dividends the equity might have.

I used some actual but sample options prices and share price movement. Naturally, share prices can do just about anything, but will either be up/exercised, up/expired, even, or down. PLTR at $10 is a pretty cheap stock. In contrast, TSLA is currently trading around $430 and will pay $900 for a +$10 contract expiring a week out. This requires a buy-in of $43k though.

I've talked stocks, but ETFs are great for CCs in the same way that they're great for buying normal shares that you might hold or limit sell.

Finally, it's worth mentioning that derivative pricing behaves a bit differently from equities. A covered call investor can use factors such as volatility to time their transactions for the highest premiums.
Fidelity and 401k


In other news, it looks like Fidelity charges a montly "recordkeeping fee" for each 401k election. Because they can't make enough off of hundreds of thousands in client money. We'll find out if it applies to their 401k active trading service which I'm happy to find out they have.
Fantasy

Henry Ruggs III catch Chiefs

3-1 across the board.

Week d'san andreas da bears
Medieval Gridiron
Covid-20
Password is Taco
Dominicas
Siren
1 Danville Isotopes
110.8 - 72.5 W (1-0)
Black Cat Cowboys
155.66 - 78.36 W (1-0)
TeamNeverSkipLegDay
136.24 - 107.50 W (1-0)
2 Screaming Goat Battering Rams
119.9 - 105.9 W (2-0)
[Random UTF characters resembling an EQ]
115.50 - 115.74 L (1-1)
Dem' Arby's Boyz
94.28 - 102.02 L (1-1)
3 Nogales Chicle
106.5 - 117.8 L (2-1)
Circle the Wagons
100.42 - 90.02 W (2-1)
JoeExotic'sPrisonOil
127.90 - 69.70 W (2-1)
4 Britons Longbowmen
122.9 - 105.1 W (3-1)
Staying at Mahomes
123.28 - 72.90 W (3-1)
Daaaaaaaang (2-2)
138.10 - 108.00 W (3-1)



2020.10.03

Star Wars Squadrons Star Destroyer

I'm a few hours/levels into Squadrons and I'm pretty happy with it so far.

Star Wars Squadrons DXGIGetDebugInterface1 dxgi dll

The first ninety minutes were kind of slow. I had the game queued up for launch time, but I guess Win 10 is a hard requirement and we're not yet in the age of a game platform checking beforehand. Or presenting anything more descriptive than a linking exception.

I guess, among other things, dxgigetdebuginterface1 is required for crossplay. Eventually I got going, and it looks like this:


So here's a little more info about the game with some review/commentary material. It's not too far off my hype post.
Mechanics

Star Wars Squadrons TIE Interceptor aiming PJ Monkeybutt

The classic X-Wing mechanics have survived the twenty year hiatus. Everything plays more or less like it did in the 90s. Lasers, missiles, shielded rebels and evasive imperials.

Star Wars Squadrons Wedge strafing Star Destroyer

Let's talk buttons. X-Wing used half the keyboard and had a quick-reference guide. That felt impressive back in '94. I've since upgraded to the rare (thanks, MSFT Flight Sim) Thurstmaster T16000 stick/throttle. Learning to work both in concert reminds me of trying to learn to shift a motorcycle - I knew it was just muscle memory and I'd have to power through the learning process. Indeed, sometimes I perfectly cut throttle to 50% and twist the stick to bank so that I can execute a tight turn. Sometimes I get turned into a fireball and realize my throttle was at 10%.

And don't get me started on the iterations of button mappings I've done. But this is good. There are skills to master and - barring any gamebreaking dominant strategies - it's fun to get better and develop a style. I don't know, fly casual.

When you compound game mechanics, four very different fighter classes, loadouts, and team comp, you end up with a very deep combat system.

Star Wars Squadrons Imperial Light Cruiser

Writing an AI for a space combat game probably isn't a legendary challenge, but it's pretty good in this game. It's not hard to tell a real player from a (veteran, at least) AI, but the bots are well-behaved and you get the feeling of being a small part of a space battle. That is, until a wing of enemies decides to target you, then good luck. It's really easy to get blasted into oblivion despite dodging, running, or boosting shields. And that's actually a good thing; an OP protagonist or being always/rarely targeted by enemies is for other types of Star Wars games.

Star Wars Squadrons kill cam A Wing Star Destroyer

What have two decades of hardware and graphics APIs done for the genre? Quite a lot! Maybe not as much as you'd expect, but the game is pretty, doesn't drop frames, and supports VR that I really want to try.

Star Wars Squadrons ships

Squadrons lifts beautiful, over-the-top visuals from Rogue Squadron but more importantly borrows the N64 game's use of crowded chunks of space. Rather than flying around in a 3d sandbox with a few fighters and larger vessels, dogfights and fleet battles take place in asteroid fields and starship graveyards. Twisting around space rocks and hollow spaceports provides a feeling of speed and pilot skill, but more importantly allows players to break line-of-sight with attackers.


Capital ships still have a wealth of targetables, including specific turrets.

Star Wars Squadrons killcam

The killcam might be one of the most useful early-game features. E.g. "oh I guess I should have been maneuvering" or "everyone seems to be running the auto-aim cannon".
Meta

Star Wars Squadrons briefing room

Squadrons follows the X-Wing model of stitching the core gameplay segments together with environment and animations that give you the Star Wars feel. No lightsabers required.

Star Wars Squadrons challenges

The game designers were pretty vocal about minimizing microtransactions/p2w/etc. In that vein, game currency (top right) is:
Cool, incremental unlockables that don't require full-time farming. No frustrating p2w mechanics. The game offers daily challenges and a long-term challenge of challenges. Nothing innovative here, but incentivizing different play styles is great.

Star Wars Squadrons fighter upgrades

TIE Fighter introduced loadouts, Squadrons keeps that mechanic alive. Each ship has a half-dozen different systems to customize (via unlockables), and each of those has a handful of options. Upgrades aren't level 1-7, they're each unique and provide benefits and drawbacks. A couple examples:
The upgrades are only compatible with one or two craft, but unlocking them grants it for any acceptable loadout. So it's not unncessarily grindy, but means that you'll start by maining one or two ships from each faction.

Star Wars Squadrons fighter cosmetics

Look, I don't care what you say, I want a red T/I. Decals, hood ornaments, and player models are decent late-game unlockables. Once you have a sick paint job.
Campaign

Star Wars Squadrons cinematics

The campaign is full of cutscenes and story. I'm just a few missions in, but the overall story feels X-Wingy. E.g. we just stole a Star Destroyer (spoiler alert). The dialogue, however, is both tropey and full of rah-rah/"you're an ace (rookie) pilot!" pandering. You can press space bar to skip, but I miss the old days of climbing the ranks or being a mercenary family that stumbles into the battle of Endor.
Dogfights

Star Wars Squadrons leaderboard

There is matchmaking. There is a ranking system that I haven't really found out much about. In a handful of dogfights, Mark, Jon, and I have had some good matching and some blowouts. In any event, good competition is the key to pvp longevity.
Fleet battles

Star Wars Squadrons tactical overlay map

So fleet battles are basically an adaptation of the Battlefield model for Star Wars. It pits opposing capital ships against each other in a cylindrical chunk of space; you can no longer fly off into the ether and instead sometimes hit the boundary and get turned back around into an asteroid.

Star Wars Squadrons fleet battle defend frigates A Wing

The battle takes place over 45ish minutes and while that feels somewhat epic, it also feels like you're following a script. The mechanics are set up to have alternating periods of attack and defense where each force trades frigate and fighter assaults.

It's hard to criticize a new game mode, but it really opens the door to a lot of untapped potential - less scripting, asymmetrical (but balanced) forces, different script/objective branches to progress the the battle in different ways, three-sided engagements. Actually, writing this makes me feel disappointed that such a great genre with such a faithful revival may never realize any of those.

@LucasArts Listen up.

Did I do that right?

Star Wars Squadrons TIE Bomber corvette attack

Fleet battles mode does provide a refreshing alternative to fighter/player-only dogfights and a campaign with tbd replay value (can I run it again with another craft?). Being able to focus on AI enemies to turn the tides of the battle or hop in a star destroyer destroyer Y-Wing simply offers more gameplay than raw dogfight battles.

Star Wars Squadrons fleet battle respawn point asteroids

It probably goes without saying, when you get blasted or hit an asteroid in fleet battles, you respawn after a short cooldown. You can also return to your capital ship to repair and rearm (instantly).

Star Wars Squadrons downscaled retro

Retro filter. Great game, well worth the money, I really wish it had: