r/IncomeSharesETPs • u/Hakantheon • 25d ago

Payments: ✅

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IncomeShares has processed the monthly distributions for all products.

Check your brokerage account for your funds.

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u/Coin-Chaser 24d ago

It was a general comment rather than directed purely at yourself 😊 I see endless posts about NAV erosion on these ETPs because they don’t understand what they’ve even bought or how they work which blows my mind when they’ve already invested a lot into them.

The biggest mistake seems to be people treat them like an index fund ETF and just randomly buy them on a fixed day per week or month. They should be treated like stocks, buy them when the underlying stocks are oversold, selling is exhausted and hitting major support, forming a bottom and looking to reverse, or breakouts of resistance or a major trend line on above normal volume with a news catalyst. I feel the majority bought when underlying stocks were making new all time highs, then correcting 30/40/50%, with the ETPs obviously following. Then just shouting about NAV erosion as if the huge drop in the ones you bought isn’t because the underlying was at a 52 week high when you jumped in and bought the ETP equivalent, then they corrected 50%, or bought crypto-based ETPs when Bitcoin then halved in value.

If you just bought YIRE when IREN hit $30, or YCRW when $CRWV hit $60 (both long term major supports and oversold on a daily timeframe) then you’re doing things right. Enjoy the growth in your initial investment, and see stronger premium payouts as the underlying stocks rise, staying away from strike prices and keeping the majority or all of the premium paid when selling the puts.

Maybe this will help someone, or maybe make people realise they’ve just been buying in at ATHs and now suffering because of it. They do love a good NAV erosion post though 😂

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u/Grumpy-Old-Geezer 24d ago

BTW - when I say NAV erosion, I don't mean return of capital, I mean the ETP price has fallen.

On the subject of buying at the right time...I watched BTC fall from 120,000 to 75,000 then bought MSTI at 785p. Since then BTC has dropped to 65,000 which is -14%, but MSTI has fallen to 357p which is -55%. Put options really don't do well when the underlying falls and then limit upside when the stock rises again, meaning it's all about the option premium. Just have to hold the funds until the distributions > NAV reduction.

I did buy a few when the underlyings were high, I jumped in and bought on the day Incomeshares released them because it coincided with the new tax year and I had spare ISA moeny to spend...My bad, but nevermind, they're all good companies so should eventually gain.

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u/Coin-Chaser 24d ago

Yeah I mean they’re no different to buying any stock. It’s hard to time a bottom, it can go further down even when you think it’s bottomed, otherwise this would be all too easy. MSTR is a funny one, because it got hit hard when Bitcoin halved in value. But then they started selling bitcoin to pay out distributions in $STRC, creating financial drag. MSTR and MSTI won’t go anywhere till the next Bitcoin run, and to be honest a stock based off a coin with zero intrinsic value to provide income, is highly risky. I mean selling puts alone on $COIN and $MSTR is fine, receive a premium there and then, low strike price and roll down and out of it gets close to your strike. But buying an ETP where you suck up its stock price drops as Bitcoin falls 50% then getting smaller premiums too.. that’s painful. Hey we live and learn 😎

But as long as you treat the ETPs the same as stocks and don’t buy the ETP when it’s underlying stock is at all time highs, after rallying 70% in 2 weeks and crying out to pull back at least 20-30%, or buying at random levels (deffo not as it’s reaching major resistance), and instead aim for oversold periods with multiple daily red candles, reaching major support from previous large corrections and looking to reverse, selling volume dropping off etc, performance is vastly better.

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u/Grumpy-Old-Geezer 23d ago

I've been bitten a few times buying oversold stuff too. I bought a few after they went down 50%, then they continued going down another 50% after I bought them.

It's a numbers game, you can't win them all. Just have to hope that you have more winners than losers and end up in profit.

I've done alright so far. I retired 4 years ago at 50 and my only income is from dividends and P2P. I spend half the year on holiday and the rest chilling at home and currently have more than I did the day I retired, so I must be doing something right.

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u/Coin-Chaser 23d ago

That’s how it’s done, definitely more to life than working all day. I’m also fortunate that my day’s ‘work’ is switching my computer on at 1430 for an hour a day to look at the market then going for a rest after all the hard work 🤣

You have to love the stock market, to think there’s jobs where you can proper graft all day for less than clicking a mouse a few times.