All things STOCKS

#12,408
#12,408
I sold shares of NFLX for $280 last week. I’m looking to sell some puts in BX, NFLX, ISRG, or something else that pulls back a bit first. Trying to sell the MSTR 221104 C 260.
 
#12,409
#12,409
I got out of NFLX today cause I'm worried that their new service is gonna attract more members and drive up the stock again. I think I may switch my puts over to GOOG or AMZN
 
#12,410
#12,410
I sold NFLX 221104 P 265 today. (NFLX: $282)

- I am obligated to buy NFLX shares for $265 in the next 9 trading sessions.
=====================================
I also sold MMM 221028 C 121. If this one is assigned it will be a wheel strategy round trip. (MMM: $118)

- I am obligated to sell MMM shares for $121 in the next 4 trading sessions.
=====================================
Sold BX 221111 P 79. (BX: $86)

- I am obligated to buy BX shares for $79 in the next 14 trading sessions.
=====================================
A GTC limit order to sell MSTR 221104 C 260 is unfilled. (MSTR: $237)

- this contract, if sold by me, would obligate me to sell MSTR shares through Friday (11/4) for $260.

Edit: order filled 10/25 (MSTR: $240-$249)
=====================================

Hopefully the markets continue to go up and my shorted puts will expire. Also I’ll be selling a lot of covered calls. I could lose shares of MMM, but after a nice profit in less than a month.

That’s about 30 option positions that I’ve written contracts for in the last 2 or 3 months. Zero disastrous trades so far.
 
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#12,411
#12,411
I looked at the general info pages for a couple short-term treasury etfs, and it didn't look like their return is anything close to 4%. Am I missing something?
 
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#12,412
#12,412
Well, funds are just made up of a bunch of bonds that they own. They will list a bond duration, and that's about all you need to know about the future behavior of the bonds, and unfortunately it's also the only thing they publish that's useful. You should expect the fund to perform in the future the way the bonds would. There's nothing reported by a bond fun that you would look at to find that "4%". They simply don't report data about funds that way. They probably should. It should be that every bond in that portfolio does appear to yield 4% to maturity, but the simply don't have a place on that page where they report that.

A second problem with funds is that they may have a goal to keep the duration at some point like for example 5 years. That means they will be selling their bonds with 4 years to go and they'll be shopping for funds with 6 years to go all the time, with NO REGARD to what that does to the performance of the fund or whether it's a good idea. Holding bonds to maturity can be quite different and in fact allows you to say, for sure, that "this bond yields 4% to maturity"; tactical bond investing also can be quite different. I can't name a fund that does it.
 
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#12,413
#12,413
Firebirdparts said:
Well, funds are just made up of a bunch of bonds that they own. They will list a bond duration, and that's about all you need to know about the future behavior of the bonds, and unfortunately it's also the only thing they publish that's useful. You should expect the fund to perform in the future the way the bonds would. There's nothing reported by a bond fun that you would look at to find that "4%". They simply don't report data about funds that way. They probably should. It should be that every bond in that portfolio does appear to yield 4% to maturity, but the simply don't have a place on that page where they report that.

A second problem with funds is that they may have a goal to keep the duration at some point like for example 5 years. That means they will be selling their bonds with 4 years to go and they'll be shopping for funds with 6 years to go all the time, with NO REGARD to what that does to the performance of the fund or whether it's a good idea. Holding bonds to maturity can be quite different and in fact allows you to say, for sure, that "this bond yields 4% to maturity"; tactical bond investing also can be quite different. I can't name a fund that does it.
Click to expand...

Yes. I have a Legg Mason muni bond fund that just continues to slowly erode. The broker has an “estimated” income of about 1% on it. I suppose it will continue to flush dollars with every Fed rate hike.
 
#12,414
#12,414
This is one of the larger ultra short bond etfs: BIL

1-3 month treasuries. Seems the last month's dividend was ~2.6%

The underlying holdings are now yielding 3.5%+. Subtract the expenses and I don't know what accounts for the difference. I guess it takes a few months for the holdings to catch up to the rising rates, if they're rolling them over?

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#12,416
#12,416
Velo Vol said:
This is one of the larger ultra short bond etfs: BIL

1-3 month treasuries. Seems the last month's dividend was ~2.6%

The underlying holdings are now yielding 3.5%+. Subtract the expenses and I don't know what accounts for the difference. I guess it takes a few months for the holdings to catch up to the rising rates, if they're rolling them over?
Click to expand...

So it's hard to be really clear about this. Bonds are just a simple mathematical products. These bonds are tradeable, and they are saying their bonds are "worth" what they're trading for. So the amount of money you earn is the interest it pays PLUS the amount the face value goes up.

The people doing the trading are smart, so if they can buy brand new bonds paying 4% they just trade old bonds that pay 1% with a 3% per year discount (for instance). That is why the fund's interest yield DOES NOT TELL YOU what you want to know. The total amount of money you make is that plus the fact that the bonds are today trading at a discount, but when they mature, the gov't or other lender has to pay you the full face value.

So, the good news is, if you buy individual bonds, they do try to make sense out of it for you. But funds don't, and the reason really is that it's just not their tradition. The brokerage softwares we use display bond funds and equity funds the same. They've never been forced to calculate and display that.
 
#12,417
#12,417
Firebirdparts said:
So it's hard to be really clear about this. Bonds are just a simple mathematical products. These bonds are tradeable, and they are saying their bonds are "worth" what they're trading for. So the amount of money you earn is the interest it pays PLUS the amount the face value goes up.

The people doing the trading are smart, so if they can buy brand new bonds paying 4% they just trade old bonds that pay 1% with a 3% per year discount (for instance). That is why the fund's interest yield DOES NOT TELL YOU what you want to know. The total amount of money you make is that plus the fact that the bonds are today trading at a discount, but when they mature, the gov't or other lender has to pay you the full face value.

So, the good news is, if you buy individual bonds, they do try to make sense out of it for you. But funds don't, and the reason really is that it's just not their tradition. The brokerage softwares we use display bond funds and equity funds the same. They've never been forced to calculate and display that.
Click to expand...
Yeah, I know it's completely different for longer bonds that people are trading. But it seems for a short-duration product like this they would just be buying and holding for the duration of the bond, then rolling to new issues. (I'm not sure how they actually run this fund).

I know you can just build such a ladder yourself, but for a reasonable expense fee it might be worth the convenience of an ETF that you could cash out of anytime.
 
#12,418
#12,418
Bond math is easy. But bond fund math isn’t.

The (non-US govt) funds are necessary for diversification. A single issuer corporate bond has a fair amount of risk.

How can they be measured if the managers don’t hold each underlying bond to maturity? A discount or premium to the sum of face values shouldn’t be hard to calculate. Maybe the present value of the scheduled interest could could also be interpreted and combined with the market value of the fund shares.

My dad had a really good short duration bond fund about 3 or 4 years ago, but it quit working well once rates started rising.
 
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#12,425
#12,425
Welcome back, Allen.

MSFT warning about "slowing growth" but I figure monopolies on a planet without a growing population gotta struggle with that all the time. I've never owned a share. Their products sucked 35 years ago, just like they do now. Just goes to show that you can't go by that. If I had just bought a few shares then I'd be on a private island.

Beat earnings and down 6% FWIW.
 
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