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When facing a stock market crash, what will you do?
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doctorpot1 joined discussion · Sep 16, 2022 17:47

41.25% ROI or getting GRAB shares at $2.35, sounds like a win win

Big brain move, after firing more bullet for more GRAB shares. I have time to re-think the strategy to take for September's quota. What I came up with is to sell LEAPS PUT options.
doctorpot1: Reload and fired again for 400 shares, pondering Sept quotas strategy
By selling 5 of this $4 PUT option expiring 24 Jan 2024, I manage to get $825 in premiums ($1.65 x 100 x 5) which equates to a 41.25% gain. This premium is non refundable so I'm keeping it regardless.
If on 24 Jan 2024, $Grab Holdings (GRAB.US)$'s price is more than $4, that means I gotten a 41.25% gain on $2,000. So much better than the bank har?
But if GRAB price is less than $4, then I have to buy 500 shares at $4. If we account for the premium collected. That means I will be buying them at $2.35 ($4 - $1.65). Of course the risk is if GRAB goes bankrupt or the price goes super duper low.
41.25% ROI or getting GRAB shares at $2.35, sounds like a win win
Since the strategy seems sound, why not do more of it? So I closed some other option position to pump more into GRAB.
I sold 3 more $3.50 PUT expiring 24 Jan 2024 too, I manage to get $405 in premiums ($1.35 x 100 x 3) which equates to a 38.57% gain. This premium is non refundable so I'm keeping it regardless.
But if GRAB price is less than $3.5p, then I have to buy 300 shares at $3.50. If we account for the premium collected. That means I will be buying them at $2.15 ($3.50 - $1.35).
41.25% ROI or getting GRAB shares at $2.35, sounds like a win win
Since I'm bullish on GRAB on the long term view, but bearish on the market in the short to mid term view, this seems to be a good way to allocate my capital. If in 2024, the bull market rally, then I will just clock those double digit ROI, but if the market is still very bad, then yayyyy cheaper shares for me Will probably do this every month as the market keep dropping
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doctorpot1
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crawled out of poverty, working towards FIRE!! (financial independence, retired early)
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