Got a 70k Unsecured Line of Credit

sherman51 wrote: ↑ Bet it all on Black!

StudentoftheGame wrote: ↑ I got govt loans for that at 0%. Also grants.

@SusanM6112

StudentoftheGame wrote: ↑ I am pre-approved for a 100k unsecured line of credit.

Anything I can do with the 100k line of credit?

Janus2faced wrote: ↑ thread title: Got a 70k Unsecured Line of Credit



OP with $100,000 Cdn/$80k US

^^^ AAPL last trade at ~$145/share would be ONE of a good choice pick + add on a 11 mth June 2022 covered call option at $145 strike price, will pay ~$16.60/share up front straight to your account, that's 11.38% up front.

https://seekingalpha.com/symbol/AAPL/options

sit back, relax wait till expiry & don't worry if AAPL goes to the moon you

if you are risk averse, then a HISA or GIC

others can add their ideas/suggestions

UrbanPoet wrote: ↑ Put the entire amount yolo’d on GME & AMC.

MashGhasem wrote: ↑ Lol funny I come across this thread.

I graduated law school in May. I'm doing my articles now.

I still have access to the 135k prime rate loc. Recently I've been so tempted to take 100k out and buy one of the big 5 banks. Let's say royal bank. Then immediately sell a long duration covered call.

Janus2faced wrote: ↑ congrats on graduating law school & good luck with your future career.

pre COVID RY was ~$109.21 then dropped to ~$78.50 on 20 March 2020, its recovered & gained to ~$126 where it's at last trade.

I posted on another thread an option strategy involving a Bank with cc options.

for RY.TO

https://money.tmx.com/en/quote/RY

the strategy is - before ex dividend buy RY, sell 6 mth ATM cc (better to do 6 mth over 12 mth) .

https://m-x.ca/nego_cotes_en.php?symbol=RY

stock at $126 today the $126 cc option expiring 21 Jan 2022 ATM (at the money strike price) will pay ~$4.50

https://www.rbc.com/investor-relations/ ... ation.html

capture 2 dividends ($1.08 x 2) totaling $2.16 ex dividend July 26, Oct 26 2021.

$6.66/$126 = 5.28% 6 mths or 10.56% annualized.

lets say you did this trade 1000 shares, take the $4500 option premium to pay towards the loan principle, use the dividends to pay the interest on the loan.

you could also take the $4500 to buy more shares

now some folks would say 'why sell ATM' because 'what-if the stock is higher on expiry'?

well, lets suppose its $130 on expiry & the stock gets called away?

since you paid $126, received $6.66 in dividends + option premium, you're at $132.66 or ACB at ($126 - $6.66) $119.34

you are ahead of the curve, simply go back in rinse & repeat.

even if RY is at $140 in Jan 2022 it doesn't matter because you have $132.66 ($126 stock + $.50 option money + $2.16 in dividends) if you want to go back into RY you just need to add $7.34 from your pocket to do the next buy the stock at $140, sell the next 6 mth ATM cc.

lets suppose though Jan 2022 RY drops to $100 & you still have the stock.

your ACB is $119.34, you sell the 6 mth to expiry CC at $120 which would pay you approx $1 option premium + 2 dividends totaling $2.16.

$3.16/$119.34 ACB = 2.64% 6 mths or 5.28% annualized.

with dividend stocks such as a Bank (I like BNS for this strategy) is capture some option premium + dividends

compare RY to BNS

https://m-x.ca/nego_cotes_en.php?symbol=BNS*