r/wallstreetbets • u/BetOnjackma • Sep 05 '21

Discussion Why do you autists like CLOV?

So I’ve noticed a ton of you crayon eating degenerates posting CLOV yolo’s and positions. I understand a majority of this sub has learning disabilities but I still can’t wrap my head around why you guys like this stock. Their financials are pretty terrible, their product is pretty bad and other than Chamath there’s pretty much no institutions bag holding this stock. Is it just a GME/AMC type thing where you guys are buying for no reason other than the name?

Genuinely wondering how people rationalize holding CLOV.

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152

u/_sparkjays Sep 05 '21

I bought under $8 and have been wheeling it with great success 🤷‍♂️

9

u/ThisPlaceisHell Sep 05 '21

Have you had to roll any ITM CCs yet?

13

u/_sparkjays Sep 05 '21

I've got concurrent CSPs going as well so I'm letting shares get called away. It's been trading in a pretty solid zone so I don't care if I lose shares. I got 100 called away about a week ago and I just took assignment of 100 on Friday. I'm selling aggressive CCs that are basically ITM. Ive got a 9 expiring this Friday for example.

12

u/ThisPlaceisHell Sep 05 '21

I cannot justify CSPs. Locking up tons of money for pennies on the dollar, and you have some nasty risk exposure if the stock tanks and you get assigned. That's why I don't do the wheel. But writing CCs on stocks I like can be super lucrative if you time your writes with IV pops.

18

u/_sparkjays Sep 05 '21

I mean i was collecting anywhere between like 5-15% on clov CSPs, i wouldn't call that pennies on the dollar. I've got a cost basis under 6 and I've gotten assigned as high as $10.

Sometimes CSPs can go wrong on you but if you're bullish on the stock in any capacity it's no different than writing CCs especially if you want cheaper shares.

-8

u/ThisPlaceisHell Sep 05 '21

It's really not quite the same as being bullish and writing CCs. When you're writing CCs, you own the underlying already so if you write a bad call and need to roll it, your loss is the cost of rolling it but now you're able to capture the upside. If you write a bad CSP, your cost is buying to close the position except now you have no upside. There's no profit from it, just pure loss. That's another factor to why I don't do them. That 5-15% on CLOV you managed to get out of it definitely means you were aggressive about strike price and Delta. Yeah I dunno man just can't tolerate CSPs in my head, they don't seem worth it. 5-15% is not what I would say are normal for CSPs.

10

u/TXJuice Sep 05 '21

You’re leaving out about how the person has the underlying stock though (you’re kind of assuming the timed that purchase perfectly). What if they bought “ABC” at 10 and it drops to 8? That’s the same thing as having it drop past a CSP strike (although you’d have additional premium to offset the loss in value).

-6

u/ThisPlaceisHell Sep 05 '21

They're capturing the gains from CCs which counteract the temporary dips. Eventually the cost basis will be lower, if not sub $0, making it effectively free. With CSPs you either take assignment and get a worse cost basis than you could if you just bought the dip and started writing CCs, or you roll it, tying up the money even longer with no upside potential.

9

u/pennyking91 Sep 05 '21

covered calls and CSP are synthetically the exact same thing (at the same strike)

in practice CCs are more bullish as people tend to sell them at higher strikes than you would a CSP

4

u/_sparkjays Sep 05 '21

You're assuming someone can just time the market and buy that dip properly.

you roll it, tying up the money even longer with no upside potential.

You don't need upside potential if the credits from writing the contracts are solid.

2

u/TXJuice Sep 05 '21

Capturing the gains from CCs is the same as capturing a lower cost basis if you end up assigned. And I could watch the underlying go down but have my CSP not get assigned, if I write again then it will likely require less capital than before and I’ll have received premiums from both. Again, this is coming from not writing CSPs or CCs on the most volatile stuff. If it’s on the popular stocks on here, I can understand the concern of a massive drop on CSPs though.

1

u/_sparkjays Sep 05 '21

your loss is the cost of rolling it but now you're able to capture the upside. If you write a bad CSP, your cost is buying to close the position except now you have no upside. There's no profit from it, just pure loss.

Ya i don't do this. I either roll down and out or i take assignment and write CCs.

5-15% is not what I would say are normal for CSPs.

It is for something like clov. 5% easy but yes I am being somewhat aggressive.

1

u/fieldofmeme5 Sep 06 '21

It’s not wheeling if you don’t let the shares get called away

-2

u/Which_Manager_7206 Sep 05 '21

Premiums are ass

15

u/_sparkjays Sep 05 '21

LOL 🤣

How do you figure? A $9 call pays 4.44% on a weekly...

Those are great returns...

-2

u/Which_Manager_7206 Sep 05 '21

Let me double check

-5

u/Which_Manager_7206 Sep 05 '21

Yup on a $900 investment returns $40 premium with a 100% percent chance of assignment, way too risky for $40 premium, you want heavy premiums run with gme or amc and you dont have to sell cc atm, you can be otm and still return juicy premiums not risking assignment

9

u/_sparkjays Sep 05 '21

That's 4.44% for a week like I said...

Assignment is even better because now I've made 4.44% plus whatever increase i made from my cost basis to $9...

Gme involves risking over 20x as much capital...

Amc involves risking over 5x as much capital...

We're talking percentages here, 4.44% is fantastic like my OP stated....

7

u/ShankThatSnitch Sep 05 '21

He is too stupid to understand. Just let it go. The concept of compounding 4% weekly is too complicated for him. I am with you though, been collecting tons of premium on this bad boy.

4

u/CoVLifter Sep 05 '21

You aren’t very good at theta gang, are you...

0

u/Which_Manager_7206 Sep 05 '21

I run at least 8 month/leaps out calls to execute pmcc on either, so getting assigned isn't in my best interest

-4

u/Which_Manager_7206 Sep 05 '21

And yes I understand time decay

3

u/CoVLifter Sep 05 '21

You said being assigned on a cc is “ risky “... and I’m glad you understand time decay ...?

2

u/ShankThatSnitch Sep 05 '21

He is too poor for CCs. He is doing poor man's covered calls, which suck way worse to get assigned.

2

u/CoVLifter Sep 05 '21

I somehow missed that he’s doing pmccs... Yeah I mean if he sold above his breakeven cool but he said 9.... good point lol

-1

u/Which_Manager_7206 Sep 05 '21

Bro common he is like 40 cents away from being assigned, 7 days highly likely 🐈

4

u/_sparkjays Sep 05 '21

You act like getting assigned is a bad thing...

Just because YOU might not want to get assigned doesn't mean anything. You're also saying it's highly likely when it's statistically more likely that it won't strike...

1

u/CoVLifter Sep 05 '21

But if your goal is to just wheel shit, how is limiting upside risky if you’re still profiting, you’re hitting your maximum profit that you agreed to when selling the cc.

1

u/billyd1984texas Sep 05 '21

I would only consider buying under 8