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

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WhatJobDoIPick said:
Been watching, might have to go for it, as much as I hate them.
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Business is sociopathic. Money talks. Make your bones while you can.
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valianteffort said:
UNH getting too cheap to avoid but my morals are keeping me away from it, now in the 300s after hours. Anyone here buying our arch nemesis healthcare provider?
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I have, I bought at 420, 410, and today at 403. Now have 100 shares with a CB around 440.

I feel just a little bit icky inside. But I'd feel worse if I bought a tobacco or gun company, for instance.
 
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Sold EAT and TMUS yesterday. Bought NUTX and ATGE oddly enough which came up on my screeners. May buy some UNH today, it's sitting 401 pre-market. If I do, will place stop loss around 385. Now that I'm net positive YTD, I have placed tight stop losses back on all my positions to lock in gains, especially the large NVDA position. This market is so headline driven. Funny how everything is down post market yesterday and then we hear news about possible China negotiations moving slowly forward as well as better than expected labor report and now everything is up pre-market. What a bipolar market.
 
thegenius said:
I have, I bought at 420, 410, and today at 403. Now have 100 shares with a CB around 440.

I feel just a little bit icky inside. But I'd feel worse if I bought a tobacco or gun company, for instance.
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Sitting on 8 January puts sold for $240 strike.

Getting undervalued.
 
Xyz also getting under valued. Had 55 contracts for $35 strike for March.

Doubled up. 135 $25 strike March contracts now.
 
WhatJobDoIPick said:
But the bullet and went in on UNH. This is what sleeping with the enemy feels like!
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Added 2 more contracts at $240 strike.

I’m getting roughly a 13% cash on cash return for these January positions in 8.5 months.

At $240 price, it’s forward price to earnings ratio becomes 240/26=9.231. This is significantly lower than the historical average of 23 ish for the company.

So feels safe-ish.
 
Current positions and game plan.

Currently expecting q1 earnings to be decent and some degree of stability in market for the next 90 days.

Expecting q2 and q3 earnings to drive down the market because of tariffs and hopefully some recovery in q4 as tariff shenanigans and their effects go away.

Expecting spy not to make all time highs this year at this time.

So with that in mind, my portfolio is currently designed for a recession. All positions are currently up to January, which isn’t ideal, but I’m keeping it.

A lot of strikes have been dropped, again and again, anything that has remotely been challenged has been de-risked and strike has been dropped.

Every position currently would have to drop at least 35% to hit my break even. Most are at least 40% below the current price of the under lying, a good chunk are 50% below current price.

If spy shows some stability, and only drops 10-15% in the next 8.5 months, then most likely all my positions will end positive. While spy ends 15-20% negative by year end. This is what I’m prepared for.

Amount of premium left in my current positions is 127k with account set up to end at 70k positive by year end by January from current holdings. So currently set up to gain 17% (127k/730k) in 8.5 months based on the current positions.

Also sitting on 300k in sgov yielding 4.5%, so another 10k in cash dividends expected in 8.5 months. So expecting 137k/730k - 18.7% in 8.5 months if you add dividends. So if nothing changes, by Jan, I end the year up 80k ytd.

Liquidating this 300k in cash will open up 100k in margin maintenance excess and will help me hold all of my naked put positions if market turns against me. If needed, hopefully not needed.

If market holds, spy makes new highs, great, I’ll eventually increase my strikes and increase my total profit, that’s the ideal situation, I’m not planning on it given macro conditions and still a stock market that’s over valued essentially.
 

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WhatJobDoIPick said:
But the bullet and went in on UNH. This is what sleeping with the enemy feels like!
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Doesn't it make you all warm and fuzzy on the inside that the wealth effect provided by your shares comes directly at the expense of a policy holder who had a diagnostic test or a procedure DENIED?. lol
 
cyanide12345678 said:
Added 2 more contracts at $240 strike.

I’m getting roughly a 13% cash on cash return for these January positions in 8.5 months.

At $240 price, it’s forward price to earnings ratio becomes 240/26=9.231. This is significantly lower than the historical average of 23 ish for the company.

So feels safe-ish.
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You sold Jan 2026 puts? Pls don't comment on my May 30 400p -5x position then LOL. They are negative now but I have a whole month for that god forsaken company to stabilize. it's massively oversold now and not getting bid because people are deploying money in tech and other areas. Plus i can roll them as needed.
 
thegenius said:
You sold Jan 2026 puts? Pls don't comment on my May 30 400p -5x position then LOL. They are negative now but I have a whole month for that god forsaken company to stabilize. it's massively oversold now and not getting bid because people are deploying money in tech and other areas. Plus i can roll them as needed.
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I mean 45-60 days to expiration Is the way to do it. My theta decay is negligible essentially at this point because of my leaps.

volatility has been high enough where i was willing to do leaps. Plus leaps have allowed me to Push my strike prices really really low.

Really hard to roll by the way once in the money, which you basically are. But yes, it’s definitely over sold. But I’m surprised even massively positive market days did not see unh be positive. At sub 400, i would have expected more support and buying activity.
 
thegenius said:
Doesn't it make you all warm and fuzzy on the inside that the wealth effect provided by your shares comes directly at the expense of a policy holder who had a diagnostic test or a procedure DENIED?. lol
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I mean… if it makes you feel any better, they missed their earnings because they paid out too much for Medicare advantage patients.

So they didn’t quite deny everything
 
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cyanide12345678 said:
At $240 price, it’s forward price to earnings ratio becomes 240/26=9.231. This is significantly lower than the historical average of 23 ish for the company.
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If unh goes to 240, they won’t have yearly EPS of 26. So the assumption in the calculation above won’t be correct. I consider that position above to be like selling disaster insurance.
 
I want to dump 20k on UHC on Monday, should I wait? Is there any potential for the stock to even go lower?
 
Would keep in mind this stock was in the 200s during COVID. They were pulling 16 billion profit at the time and 2024 was even lower at 15 billion. 2025 should rebound but it is all projections. Could it touch 200s? Sure. It’s cheap now, could get cheaper
 
Splenda88 said:
I want to dump 20k on UHC on Monday, should I wait? Is there any potential for the stock to even go lower?
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if you are trading then you maybe want to wait until buyers are in control. Right now they are not. But if you want to buy some and hold for years or a decade this is probably the best time to do it. I have been DCA’ing into it for about 1.5 years and have bought small amts between 403 and 485. When I bought some at 485, it had pulled back significantly from like 580. So I was like “damn this is good.” Then it went back to almost 600 and I was happy. Now it’s at 400.

The company itself, going back 30 years or more, generates tons of cash and has been a monster like few others. It’s definitely outperformed just about every other company. Certainly the S&P. Just look at a 30 year chart. I think now is actually a pretty good time to buy. UNH has been consolidating for several years and it will continue to go up, unless the entire paradigm of health care changes in this country. The US has been trying to do this for 50 years with little change. So I’m not anticipating major changes there.
 
Super tight stops. I'm kind of paranoid of this recent bullish recovery given the state of everything going into FOMC. I "think" the market has priced in FED not changing rates but don't exactly know how the market will respond after Wed. Luckily my GFI and NUTX swings are working out. My biggest gainers are always the ones that I have the least confidence in and go in with small positions but what can you do. I noticed UNH up with slight gain. I'm a little nervous that all sectors along with SPY appear very overbought on the daily. Watching COIN and AMD earnings this week.
 
Groove said:
Super tight stops. I'm kind of paranoid of this recent bullish recovery given the state of everything going into FOMC. I "think" the market has priced in FED not changing rates but don't exactly know how the market will respond after Wed. Luckily my GFI and NUTX swings are working out. My biggest gainers are always the ones that I have the least confidence in and go in with small positions but what can you do. I noticed UNH up with slight gain. I'm a little nervous that all sectors along with SPY appear very overbought on the daily. Watching COIN and AMD earnings this week.
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Option flow and OI suggest SPY will be taking a short-lived dip soon, perhaps to retest those 5400 levels

We're in a no-mans land where it's tough to gauge even a short-term direction

Vol is pretty bad too, not a lot of theta harvesting available
 
Splenda88 said:
It feels strange buying UNH. Some people believe the stock could even go down to < $300/share. Will definitely buying it if get that low.
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I'll say it again. Business is sociopathic. It doesn't care if you feel strange, or scared, or whatever. Just go for it!! You got this!
 
Splenda88 said:
It feels strange buying UNH. Some people believe the stock could even go down to < $300/share. Will definitely buy it if get that low.
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It would need more bad news for it to get to 300. UNH is saying it expects 26 to 26.50 EPS for forward estimates. It's had a baseline PE ratio of 18-28 for the past 10 years. If we just use those numbers, then UNH would trade between 477 - 742 given their forward EPS. Right now it's 390. Seems reasonable to DCA into a position now. Or sell some puts. IV is quite high. Sell at 45 DTE ATM put. You maximize time value like that. Right now the June regular way expiration 390P sells for 18. And that is at a 36% IV when it usually is a 21-34 vol. Seems like a no brainer now. That's a 4.8% return on investment without margin. That's pretty damn good in this case.

I think I might sell some more puts on it this week. Or do a call spread risky (risk reversal)...although i would rather see buyers in control when that is put on.
 
WhatJobDoIPick said:
Anyone buying SPY calls today after Trump's signal on truth social?
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We’re approaching the now flattening 200-day moving average, and I’d be very surprised if the S&P 500 simply broke through it on the first try. That level is on everyone’s radar, so I expect the SPX to test it and pull back several times before it eventually manages a sustained breakout.
 
At this point, I do expect a sustained breakout after a short retest of that 200 DMA. There is too much money on the sidelines, and there are a lot of people who are going to want to chase this as we head up

Markets drive narrative, and in 2025, I believe the market corrects way before the "recession" sets in, and by the time a recession is called, we'll effectively be on our way out of it.

Also, the market isn't the economy, two separate things/concepts.

TSLA, BTC, MSTR, SOL, NVDA
 
HemorrhagicShock said:
At this point, I do expect a sustained breakout after a short retest of that 200 DMA. There is too much money on the sidelines, and there are a lot of people who are going to want to chase this as we head up

Markets drive narrative, and in 2025, I believe the market corrects way before the "recession" sets in, and by the time a recession is called, we'll effectively be on our way out of it.

Also, the market isn't the economy, two separate things/concepts.

TSLA, BTC, MSTR, SOL, NVDA
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For the most part, the economy is the market.

If we go into a recession, the market will definitely take a dive.
 
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Splenda88 said:
For the most part, the economy is the market.

If we go into a recession, the market will definitely take a dive.
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I disagree with this. Market can be carried with a high M1 / M2 in circulation similar to covid. 2019 market crash was a few month V shaped recovery while the economy and companies small and large suffered. Government bailed out multiple businesses by increasing M1/M2 and covid recession was felt by many while the market thrived to not only all time highs, but way way beyond this. A recession will not necessarily mean the market will dive. Just wouldn't count on it
 
Call out for Pepsi. Price is finally worth the squeeze. Large dividend yield that has a track record of growth every single year without miss, growth in earnings continues even with a stock price dropping projected to be over 10 billion in 2025, revenue at all time highs (minimal growth here but not worried), margin has not compressed even with inflation (10%+). Am i missing something here?
 
valianteffort said:
Call out for Pepsi. Price is finally worth the squeeze. Large dividend yield that has a track record of growth every single year without miss, growth in earnings continues even with a stock price dropping projected to be over 10 billion in 2025, revenue at all time highs (minimal growth here but not worried), margin has not compressed even with inflation (10%+). Am i missing something here?
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TTD having a nice pump today. Love that stock. Roller coaster lol.
 
Splenda88 said:
It feels strange buying UNH. Some people believe the stock could even go down to < $300/share. Will definitely buy it if get that low.
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Use the money and just bought 20k of META today.

I have another 20k and not sure what to do with it.
 
Splenda88 said:
malaysia.news.yahoo.com

Did US health giant hide financial fallout from CEO’s death? Lawsuit says yes

NEW YORK, May 9 — A group of investors has filed a lawsuit against UnitedHealthcare in the United States, accusing the h...
malaysia.news.yahoo.com malaysia.news.yahoo.com
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What a stupid lawsuit.

"According to CNBC, yhe lawsuit claims the company failed to factor in the reputational and operational fallout from Thompson’s death."

That being said UNH is still getting pounded. It's now 380/share.

I'm short -5 May 30 400p and -5 Jun 20 390p contracts. Weekly RSI is near a low, last 8 times going back a decade when it's low like this there is a bounce. So just need to be patient. I still think accumulating this at these prices is right...it's just a matter of will it be right in 3-6 weeks? LOL
 
valianteffort said:
Call out for Pepsi. Price is finally worth the squeeze. Large dividend yield that has a track record of growth every single year without miss, growth in earnings continues even with a stock price dropping projected to be over 10 billion in 2025, revenue at all time highs (minimal growth here but not worried), margin has not compressed even with inflation (10%+). Am i missing something here?
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Apparently yes. If one had bought 6 years ago you would not have made a penny (excluding dividends). This stock has really cratered and it started well before Trump came into office. Does this have something to do with the MAHA movement? I would do more research before buying this one.

Compare it to KO. KO continues to go up. Much better relative strength compared to PEP
 
thegenius said:
What a stupid lawsuit.

"According to CNBC, yhe lawsuit claims the company failed to factor in the reputational and operational fallout from Thompson’s death."

That being said UNH is still getting pounded. It's now 380/share.

I'm short -5 May 30 400p and -5 Jun 20 390p contracts. Weekly RSI is near a low, last 8 times going back a decade when it's low like this there is a bounce. So just need to be patient. I still think accumulating this at these prices is right...it's just a matter of will it be right in 3-6 weeks? LOL
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Probably not. No one wants to catch a falling knife. That stuff happened to me with Boeing and finally sold at a 10% loss.

My target entry in < $300/share; they still have a long way to go to get there.
 
Splenda88 said:
Probably not. No one wants to catch a falling knife. That stuff happened to me with Boeing and finally sold at a 10% loss.

My target entry in < $300/share; they still have a long way to go to get there.
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My strike isn officially down to $230. 16 contracts for january.

Just like pep, ups is kinda in the same boat too. Getting really attractive
 
cyanide12345678 said:
My strike isn officially down to $230. 16 contracts for january.

Just like pep, ups is kinda in the same boat too. Getting really attractive
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What's going on with UPS? I did not know the stock was going down that much. Is their dividend yield really 6.84%?
 
maxxor said:
Amazon contract non renewal
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More like a voluntary reduction in lower margin business and focusing on higher margin business - business to business growth and healthcare related shipping growth instead of very low margin Amazon business.

Amazon margins were low, so they are decreasing it, not eliminating it however. There’s statements from Amazon and ups that the Amazon business is there for them if they want it.
 
maxxor said:
Amazon contract non renewal
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And likely safe too since it’s about 50% of their free cash flow.

investors.ups.com

UPS Releases 4Q 2024 Earnings and Provides 2025 Guidance

Explore all the financial releases for United Parcel Service, a global logistics company.
investors.ups.com investors.ups.com

The last time they provided full year guidance, their revenue for 2025 was expected to drop from 91B in 2024 to 89B in 2025 as it moves away from Amazon.

While operating margin goes from 9.3% to 10.8%. If they are able to do that, their 2025 earnings per share should be higher compared to 2024. At the end of the day, net profit matters.

I have $60 puts sold, i think 15 contracts maybe?
 
Other companies on my radar - lyft, pins, expe.

Lyft was undervalued and proved it during earnings today. I had 125 contracts.

Pins i had some 100 contracts too.

Expe missed revenue by 2% but is trading at low low valuations. It’s basically the second largest ota for travel. The tourism weakness in the US this year Is creating a good buying opportunity - i have 14 contracts for this.
 
Made 10k in SOFI in 6 weeks.

I am trying to make another 10-15k in the next 3 months with so much volatility, but I am not seeing anything to invest yet.
 
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I got stopped out on UNH. I'm having a few more stocks show up on my traditional screeners. I've been trying to stick to sectors showing the most activity. I'm still not convinced this is a legitimate turnaround and am halfway expecting some reversal after May OPEX. If not then, then probably end of July when tariff pause ends. Heavily putting cash into my portfolio to be able to pounce if we have any pull backs over next few months. Overall 20% YTD change to brokerage but most of that is contributions. 4.4% YTD gain minus contributions vs -3.3% SPY

Crazy that my accounts went from Feb 14th to April 8th with around 24% loss. I was 13% YTD Feb 14th and almost a month later was at -10%. How horrifying. Then from April 8th to May 9th, I go from -11% to +4.4%? This market is nuts. I don't see myself coming off protonix for the rest of the year.
 
Splenda88 said:
Made 10k in SOFI in 6 weeks.

I am trying to make another 10-15k in the next 3 months with so much volatility, but I am not seeing anything to invest yet.
Click to expand...

Same - have 210 $7 contracts. Their last 2-3 earnings reports have been impressive with great growth, now profitable, it’s ridiculous how the market has been punishing them.

Keeping my strikes as is for now and not being greedy, but as the year goes by, i plan on moving my strikes up at some point.
 
This bull run is providing so many opportunities for IMHO simple and easy trade setups, and I think I now have enough knowledge and experience to lever up with serious position sizes.

Currently trading IBIT contracts, SPY contracts, and of course, my babies NVDA and TSLA

I've said it before and I'll say it again, this is 1000x more rewarding and engaging than being an EM physician, and requires far more brain power, risk management skills, and nerves of steel.

I love this so much. I should have done this from day one of college.
 
HemorrhagicShock said:
This bull run is providing so many opportunities for IMHO simple and easy trade setups, and I think I now have enough knowledge and experience to lever up with serious position sizes.

Currently trading IBIT contracts, SPY contracts, and of course, my babies NVDA and TSLA

I've said it before and I'll say it again, this is 1000x more rewarding and engaging than being an EM physician, and requires far more brain power, risk management skills, and nerves of steel.

I love this so much. I should have done this from day one of college.
Click to expand...

There's nothing Intellectual about being an ER doc. Scan, admit, discharge, get yelled at. Pretty much a waste of an MD. I remember really liking my corporate finance class in college. I shoulda done that.
 
and UNH dropping another 10%.

I got lucky yesterday and reduced position size by 25%.

Going back in really big when the market opens.

Capitulation going on in my opinion. Time to load the boat 🤣
 
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