PLS (ASX) PLS chart

Originally posted by dunnomuch: ↑

the market is down now about 0.8% and PLS is around 3.4% down, that is a high Beta stock doing its high beta thing which is that it moves more than the market either up or down. Because it is a high beta stock the volatility is high at 55% or so. With high volatility you get more bang per buck on an options trade.

Yesterday at a share price of around $5.08 I sold September $5.50 calls for 15.5c against my stock (covered calls) today I'm currently trying to buy them back for 8.5c so a profit if 7c or about 1.4% of the stock price for holding 1 day. If PLS rallies then I'll re sell covered calls at $5.50 for another 15c hopefully taking the position to 22c profit on top of the other times that I've rolled the position this month so total profit will be closer to 50c for the month without actually trading any of my shares. If the shares get exercised at $5.50 then my actual breakeven is closer to $6 as the premium has been extracted a few times over. Those shares that I'm using were bought at $4.92 at the start of the month, sold for $5 when the price hit $4.60 using a put option bought when the price hit $5.30 or so in the first few days of the month so didn't cost much, I think 8c so that left about 30c per share profit as I bought them back at $4.6125. I then bought a $4.60 put which I rolled up to $4.80 yesterday for a net cost of 7c, thats now worth 16c if I sell it today or hold on in case PLS breaks $4.60 again... if it hits $4.60 again then the option will exercise at $4.80, the calls will be bought back for almost nothing and I can then sell puts at $4.71 (European series so I can control when they get exercised) and roll up that position as PLS gradually increases again throughout the year. American series end in a zero usually, $4.60 as an example, it can be exercised at any time during its tenor (duration until exercise date). $4.61 would be European and exercisable at a specific date, august 17th is the next monthly exercise date but there are also weekly options, 3rd, 10th, 24th of August.. So if my PLS shares exercise at $5.50 then I have bought them for $4.6125 plus all the other premiums along the way. If that happened I'd just buy them back and reset costs etc and just rinse and repeat. Obviously there's a bit of tax involved in the final outcome...

The high volatility means that something is always likely to happen, you can protect against this to an extent using theta or time value of money. As PLS is always moving, the volatility creates all sorts of pricing things so you can hop in or out of a long or short position and sometimes you lose a bit and sometimes it magnifies the other way, because the general trend of PLS has been up it allows theta to come to your rescue and throw an options contract far into the future to generate a credit to reset your losing position etc. at any point in time I have ZERO idea where the price will finish up and luck seems to be just as important as a good chart. I think that's the first time I've ever detailed how I trade anything, it's more just as an example of how you can use underlying stock rather than just watch it move up or down.

Expand

"because the general trend of PLS has been up it allows theta to come to your rescue and throw an options contract far into the future to generate a credit to reset your losing position "

Brilliant !

No.	Vol.	Price($)
1	750	$3.05

No.

Vol.

Price($)

750

$3.05

Price($)	Vol.	No.
$3.07	10000	1

Price($)

Vol.

No.

$3.07

10000

No.	Vol.	Price($)
1	750	3.050
2	60000	3.030
4	52314	3.020
5	26550	3.010
12	64246	3.000

No.

Vol.

Price($)

750

3.050

60000

3.030

52314

3.020

26550

3.010

64246

3.000

Price($)	Vol.	No.
3.080	83862	8
3.090	40064	10
3.100	655591	67
3.110	59971	10
3.120	110805	20

Price($)

Vol.

No.

3.080

83862

3.090

40064

3.100

655591

3.110

59971

3.120

110805

(20min delay)
Last $3.07		Change 0.090(3.02%)		Mkt cap ! $9.197B

Open	High	Low	Value	Volume
$3.05	$3.09	$3.02	$74.82M	24.46M

"because the general trend of PLS has been up it allows theta...

True North increases silver metal at QLD's Vero deposit by 20%

From the Floor with Federal Opposition Leader Peter Dutton at Diggers & Dealers 2024

Bitcoin: Current State of Play & Where to Next | Swyftx

Trek Metals jumps 5% as gold & REE drill run kicks off at Christmas Creek in the Kimberley

Revolutionary inverter technology leads the clean energy charge

Hazer Group reports ten days of continuous operation at graphite-manufacturing test facility

Neuren Pharmaceuticals dips after pediatric Angelman Syndrome Phase 2 trial results fail to impress

Dale Gillham's weekly wrap: picking resilient stocks in a volatile global market

Week 32 Wrap: AI is clearly overhyped – but did we see ‘bubble’ burst already? Plus RBA decision; Japan’s wild week & Google ruling

Emerald & Azure score Digger & Dealer awards

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

"because the general trend of PLS has been up it allows theta...

Top Stories

True North increases silver metal at QLD's Vero deposit by 20%

From the Floor with Federal Opposition Leader Peter Dutton at Diggers & Dealers 2024

Bitcoin: Current State of Play & Where to Next | Swyftx

Trek Metals jumps 5% as gold & REE drill run kicks off at Christmas Creek in the Kimberley

Revolutionary inverter technology leads the clean energy charge

Hazer Group reports ten days of continuous operation at graphite-manufacturing test facility

Neuren Pharmaceuticals dips after pediatric Angelman Syndrome Phase 2 trial results fail to impress

Dale Gillham's weekly wrap: picking resilient stocks in a volatile global market

Week 32 Wrap: AI is clearly overhyped – but did we see ‘bubble’ burst already? Plus RBA decision; Japan’s wild week & Google ruling

Emerald & Azure score Digger & Dealer awards

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News