21d (edited) • Community Calls
River of Wealth Stocks + Options Community Call - November 14
Big thank you to Tony and Julie for an awesome, super interactive call. If you missed it (or want to rewatch), here’s the recording:
👉 Replay (70 mins, no highlights): VIEW RECORDING - 70 mins
🔍 What we covered
1. Tony’s story & goals
- From penny stocks + pain → decades of “set it and forget it” index funds
- Now using a portion of his capital for cash-secured puts (CSPs) and the wheel strategy
- Goal: build consistent, conservative income without turning this into a full-time job
2. Cash-Secured Puts on NVIDIA (the core framework)
- Using 30–45 DTE, ~20 delta puts
- Only on stocks you’d be happy to own long term
- Why 50% profit targets make sense (first 50% of premium comes fast, last 50% is slow + risky)
3. When to enter a trade (NVDA example)
- Using moving averages + Bollinger Bands in Thinkorswim to spot support zones
- Combining technical support (50-day / 100-day MAs) with
- Fundamentals (forward PE based on next 12 months of earnings in Schwab)
4. Theta decay & “when does the magic happen?”
- Most of the theta decay happens in the last ~30 days
- Shorter-dated options = faster time decay
- Why that supports the 30–45 day window and 50% profit-taking rule
5. Mindset: opposite of gambling
- We’re not here to “YOLO” — we’re building a system
- Think like Buffett: “Be fearful when others are greedy and greedy when others are fearful.”
- Use volatility and market drops as opportunity, not panic
- Keep cash and a long-term thesis so you can act when others are scared
Here are clickable links to each part of the video:
- CSP Strategy: Sell Cash-Secured Puts (CSPs) on stocks you want to own at a discount. The 30–45 DTE window captures accelerated Theta decay, while the 50% profit target allows for multiple trades ("bites at the apple") on the same stock. The first 50% of profit typically occurs much faster than the remaining 50%.
- Trade Entry: Combine technical analysis (moving averages, Bollinger Bands) to identify support levels with fundamental analysis (forward P/E) to confirm the target entry price is a good value. This dual approach helps determine when to enter a trade.
- Risk Management: Manually track cash reserves in paper accounts to simulate real-world capital constraints. Avoid using margin until the core strategy is mastered, as it is considered an advanced technique.
- Trading Psychology: Adopt a long-term mindset to avoid panic during downturns. Maintain a cash reserve to buy when others are fearful, following Warren Buffett's principle of being "greedy when others are fearful and fearful when others are greedy."
Topics
Member Backgrounds & Goals
CSP Strategy & Trade Entry
- Core Strategy: Sell CSPs on high-quality stocks you want to own for the long term.
- Trade Entry Process (NVIDIA Example):
- Trade Management:
Risk Management & Account Setup
- Paper Accounts: Manually track cash reserves to simulate real-world capital constraints. Jeff suggests doing this manually for the sandbox account and not using margin.
- Margin: Avoid using margin for options trading until the core strategy is mastered, as it is considered a much more advanced technique that introduces additional risk.
Trading Psychology & Theta Decay
- Mindset: Trading should feel like the opposite of gambling. Avoid chasing "10x opportunities" or falling into the trap of betting on "stock tips" or "penny stocks." The goal is consistent income, not speculative gambling, and "not letting yourself gamble."
- Downturns: View market crashes as opportunities. Warren Buffett maintains hundreds of billions in cash (via Geico) to invest during market downturns. Investors can apply a similar principle by maintaining a cash reserve to deploy when others are fearful, as this often presents the best buying opportunities (e.g., Jeff's experience investing in Apple when its P/E was low).
- Theta Decay: Time value decay accelerates exponentially in the final 30 days before expiration.
Next Steps
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River of Wealth Stocks + Options Community Call - November 14
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