G20 Summit: Argentina signed an agreement to export Vaca Muerta gas to Brazil

[Larry]

Congrats. YPF should be a great investment over the next few years. My strategy (not investment advice) is I am holding for the long haul. I do sell some out of the money covered call options each month to get cash. For example, I bought some more stock at $40 a few weeks ago. I bought 2,300 shares and then I turned around on December 20 and sold the covered call options on those shares. I got $3,319.65 USD in cash for selling them. I gave someone the right to buy my shares for $45 by January 17, 2025. No matter what I keep the $3,319.65 that I made. If the stock goes up past that, the most I will make is $45 a share. I am more than Ok if that stock gets purchased away at $45. But if not, I will just sell out of the money covered call options again for February.

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Interesting. So in this situation do you hope that the stock goes down? I see YPF at $45.32 today. Almost at the price. Do you want the stock to go up or down??

 

[earlyretirement]

Interesting. So in this situation do you hope that the stock goes down? I see YPF at $45.32 today. Almost at the price. Do you want the stock to go up or down??

Good question. The trick is when I sell covered call options to try to sell far enough out. Ideal situation is the stock goes up to the strike price but falls below it. So I sold the January 17 call options so I gave someone the right (but not the obligation) to purchase my 2,300 shares of YPF at $45 a share. Obviously if the stock is trading lower than that by next Friday they wouldn't buy the stock. For example, if it was $44.95 they wouldn't because they could just buy stock for less than $45.

Preferably the stock is as close to $45 without going over it. Then I get to keep my shares and I can turn around and do it all over again for February. Sometimes I can roll it over many months in a row. But I won't be sad if it goes above $45 and my shares get called away. I still hold a lot more YPF shares. Regardless I get to keep the cash I made selling the options. If it goes above $45 all I will get paid is $45. So for the 2,300 shares I will get $103,500. Plus the money I made selling the options. Not a bad profit for one month.

 

[Blockchain]

Good question. The trick is when I sell covered call options to try to sell far enough out. Ideal situation is the stock goes up to the strike price but falls below it. So I sold the January 17 call options so I gave someone the right (but not the obligation) to purchase my 2,300 shares of YPF at $45 a share. Obviously if the stock is trading lower than that by next Friday they wouldn't buy the stock. For example, if it was $44.95 they wouldn't because they could just buy stock for less than $45.

Preferably the stock is as close to $45 without going over it. Then I get to keep my shares and I can turn around and do it all over again for February. Sometimes I can roll it over many months in a row. But I won't be sad if it goes above $45 and my shares get called away. I still hold a lot more YPF shares. Regardless I get to keep the cash I made selling the options. If it goes above $45 all I will get paid is $45. So for the 2,300 shares I will get $103,500. Plus the money I made selling the options. Not a bad profit for one month.

I would have to assume when it is close big money will push it one way or the other. I never messed around with options but this seems very conservative.

 

[Uncle Wong]

I would have to assume when it is close big money will push it one way or the other. I never messed around with options but this seems very conservative.

I guess selling those call options were smart. I see those options will expire worthless so you get to keep the shares and you made that $3,300 bucks? Will you turn around and sell the options again next week for February?

 

[earlyretirement]

I guess selling those call options were smart. I see those options will expire worthless so you get to keep the shares and you made that $3,300 bucks? Will you turn around and sell the options again next week for February?

Well I don't look at it as smart or not. I hold a lot of YPF shares that I am holding for the long term anyway. I'm just taking a portion of it and being conservative. So you can see the example of my January 17 $45 call options expiring worthless because the stock was under $45. So I get to keep the money I made selling those options.

Now today I turned around and sold the next month's options. So February 21 $45 options. I sold them for $1.70 and after commissions got $3,894.63 US dollars for selling the right for someone to buy my YPF stock at $45 on or before February 21. The money is mine no matter what. If YPF stock goes above $45 all I will get is $45 per share.

Selling covered call options is a conservative approach but the yields can be extremely high. This is not investment advice.

 

[Uncle Wong]

Well I don't look at it as smart or not. I hold a lot of YPF shares that I am holding for the long term anyway. I'm just taking a portion of it and being conservative. So you can see the example of my January 17 $45 call options expiring worthless because the stock was under $45. So I get to keep the money I made selling those options.

Now today I turned around and sold the next month's options. So February 21 $45 options. I sold them for $1.70 and after commissions got $3,894.63 US dollars for selling the right for someone to buy my YPF stock at $45 on or before February 21. The money is mine no matter what. If YPF stock goes above $45 all I will get is $45 per share.

Selling covered call options is a conservative approach but the yields can be extremely high. This is not investment advice.

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Thanks for the education. I think I will do the same tomorrow. I don't have as many shares but will try this. Thanks!