InvestingWithBrandon

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Covered Calls can be a MAJOR trap...
Many ppl use them to close out if a position.
If you wanna exit, just sell the shares.
Can’t tell you how many ppl I have seen that wanna sell their over valued shares so they get greedy to sell CCs to pick up peanuts in premium.
Meanwhile the shares fall 40% and they hold the bag down...
Just sell your shares.
Don’t complicate it.
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5 HUGE problems with the wheel strategy.
1. You sell cash secured puts (CSP suck)
2. You have a pile of cash sitting there doing nothing.
3. Selling puts is bullish, yet you have cash sitting there not working.
4. If you get assigned the shares (should be a great company at a good price if you truly were bullish selling the put) the strategy says to sell CCs.
5. Why would you wanna cap upside by selling CCs on something you are bullish on...
I have yet to see someone send me a legit ROI in the last 5 years (through bear market and bull market) that has beat the SP500 with the wheel.
Attached i
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The same emotional humans that are excited to see green today…
Are the same ones depressed and questioning everything on red days.
As I always say.
Keep emotions in check & don’t worry about day to day volatility.
This applies to green & red days.
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When the market "CRASHES"
Everyone says "Buy the dip"
But do you know what it feels like to actually buy during a "meltdown" as an average retail investor?
- Your portfolio is red.
- The news says the world is ending.
- You second guess everything.
- You end up panic selling... at the exact wrong time.
Happens every cycle.
Smart investors will:
- Buy shares while they are on sale.
- Buy calls when nobody wants them. (cheaper)
- Sell puts when the herd is paying top dollar for them. (selling for max premium)
I always say the emotional aspect of investing is what crushes most retail investors
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If you are MAX leverage and YOLO calls now, spend a little time to understand this chart.
Please don't say this time is different.
MAX1.67%
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If you sell cash secured puts, just know that you are making a MASSIVE mistake.
Selling puts means you are BULLISH on a company, yet you wanna let a bunch of cash sit there and do nothing...
Why not use the cash to buy shares of the company you are bullish on...
Secure the trade with that.
& guess what, you will not be on margin.
No margin interest.
Simply securing the puts with your portfolio, not cash.
Cause guess what, shares can be sold for cash if you gotta take assignment.
Many will say this is risky.
But you are simply wrong.
Keep your ratios in check.
Quality companies.
Quality valuati
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Your HORRIBLE strike price is why you get smoked with options...
(how to fix it right now)
Most retail investors sell puts with a strike price 5% ish below the current market price to "build a margin of safety"
They usually do this with monthly contracts.
Here's the BIG problem.
5% is not a good enough margin of safety, especially with a 1 month contract where you have no tailwinds of growth behind you.
(as EPS climbs, the stock will follow that up)
The solution is to sell 1+ year portfolio secured puts.
You can pick a strike price 20% below the money, get great premium, build a MUCH better ma
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Cancelling Netflix for $15/month isn't going to help you.
Making your own coffee to save $5 isn't going to help you.
Income must be INCREASED.
Cash flow must be INCREASED.
Don't cut back on basic life necessities so you can pretend you're doing something good.
Make more money, spend within reason.
Funnel the difference to your brokerage account.
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EPS is the number one thing that moves the price of a stock in the long term
Short term volatility is simply opportunity to capitalize.
Zoom out and capture the big move.
Do NOT let short term volatility stress you out.
EPS up and to the right = stock will follow that if you be patient & get in at a good valuation level
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Warren Buffett became one of the richest people on earth by compounding at an annual growth rate of 19.9%.
What does this tell you?
Why aren't day/swing traders all billionaires?
Why do we see all of their wins?
Why do we not see their losses?
One word.
CONSISTENCY
Warren compounded at 19.9% since 1965.
Anyone can get great returns in bull markets (like right now since 2022)
But most will simply not survive the bad times...
That is what makes investors great.
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I have over $2 MILLION bucks in the stock market in $VOO and $Q.
That will average 11% annually int he long run.
I’ll make $220k a year for doing nothing
This doesn't even account for the $25k+/mo I make with 1+ year portfolio secured put options
Fibonacci that!
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Another reason why longer duration options contracts win.
Put the odds on your side.
Quit gambling with weeklies.
Longer is 10x easier.
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Sometimes, the best move to make in the stock market is to DO NOTHING.
Every headline doesn't need to be reacted to.
Every dip doesn't justify being bought.
Every pump doesn't justify to sell.
Sometimes you just need to sit and wait.
This is one of the hardest things for most retail investors to do.
Don't fall victim.
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This is why most people get DESTROYED with call options.
It's very simple...
Stock options are simply a way to magnify an expected return.
The problem?
Most people have zero clue what way a stock is likely to go.
So they not only buy shares with the hopes of it going up... they buy calls too.
(major problem)
So... if you have no clue what direction a stock is going to go, you should never buy shares to start & for sure not take a leveraged/magnified bet on that by buying calls...
Options are ONLY for ultra high conviction plays.
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Market volatility is not your enemy.
It’s what creates opportunity.
A 20% correction may feel crappy in the moment...
But it’s simply a discount to buy the dip on quality companies and use options to magnify returns!
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Hating 5 days out of 7 of your life and then spending 2 days dreading going back to restart those 5 days every week
Is no way to live your life.
Investing is your way out.
Key word, "investing"
Not trading.
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