RKT - YOLO - 60k Shares + SELLING Options against them. $1.3M (4000% some lots) Gains + some CC LOSSES (and lessons learnt)... & Discussion
As I've posted before here, I'm neck deep into RKT shares, from my one and ONLY YOLO from 5+ yrs ago, starting with WAMPQ ->WMIH -> COOP -> RKT last year.
I also started getting into Options (both buying AND selling them) last year, after learning from you all (and other Reddit forums), to generate income against those shares (because I don't want to/can't practically sell them all at once).
I was (and in some way, still am) a novice when it comes to Options, and needed to learn about DTEs, Delta/Theta etc, by trial and ERROR. I also needed to understand TAX implications of suddenly coming into so much $$$ all at once.
On Taxes: Did you know that there's something called a "Millionaire Tax" surcharge in MA? And that there's a 4% NIIT (Net Investment Income) Tax at the Federal Level at $200k (single)/$300k or more in "investment" income?
I also had to LEARN (the HARD way) \*when\* to sell Covered Calls & PUTS, when NOT to, when to take Profits early on CCs and PUTS, when you need to just BTC (Buy To Close) a losing Options Trade.
For example, today's losses came from getting "caught" in an overnight 10% run-up in RKT last week, after Trump tweeted TWICE about Housing, where I should have closed the CCs after the 1st Tweet (and then dropped the $200B MBS bombshell afterhours). I knew RKT would get to this range, but I assumed it would get to today's level after Feb/Earnings. Then the tweets happened.....
Half of today's "Loss" is from Rolling a couple of CC's up/out, so the loss wasn't that bad comparatively to what it was looking like it might be over the weekend (like 2-3x WORSE, before the Powell news tanked things a bit this morning).
Most of RKT's potential is already priced in given the run-up, for now, but I do expect it to be into the high $20's next year, which is still a very nice gain if you bought it in the $10's range, last year.
Any questions, happy to discuss.