Don't trade stock options breh...

LionofJudah

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Just wanted to do a quick thread to put y'all up on making money in the stock market, with very little capital. I'm no stock guru or anything like that, but I try to make my living doing this. Here are a few trades that I made earlier this year to show you the power of trading stock options. You can seriously make a great deal in a short amount of time, if you know what you're doing.


LNKD.jpg


Basic Option Info

Call Option-An option to buy assets at an agreed price on or before a particular date.These are normally bought when you think a stock price is going to increase.

Put Option-An option to sell assets at an agreed price on or before a particular date. These are normally bought when you think a stock price is going to decline.

Strike Price-The price at which a put or call option can be exercised.

1 option contract is equivalent to 100 shares of the underlying security (stock). So if I buy 5 call options of Yahoo at a strike price of $25.00 for .20 each, I am spending $100 (excluding commissions). [5 contracts X 100 shares=500 X .20 each=$100 ]

All of these transactions took place over two weekdays. Initially, I bought 43 put contracts of stock BRK.B (Berkshire Hathaway) for .20 each on a Thursday for a total of $920.75 (including commissions). The price of BRK.B (the stock) decreased so the Put option price that I bought increased. I sold all 4300 contracts at .35, so I nearly doubled my money that same day [43 contracts X 100 shares=4300 X .15=$645]. This is a great return, but I really want you to look at later on that day. I took most of my funds and bought 13 Call contracts of LNKD (LinkedIn) @ $1.05 each. LinkedIn was going to announce quarterly earnings that night and there was a rumor that they would be great, so I took a chance and held overnight. The earnings were great and the stock exploded in Afterhours trading. Options don't trade in afterhours, so I had to wait till the next day to sell them. I sold all 13 contracts not long after opening bell for $7.50 each. Here is the math on that one (13 contracts X 100 shares=1300 X 6.45=$8385.00 profit)! This is holding for less than 24 hours...After I sold, the stock continued to climb. I thought it was going to pullback some, so I bought a few put contracts but I lost some of my profit on that as you can see. But this is the POWER OF TRADING OPTIONS. If I had held my original call options on LNKD until later in the day, I would have made over $20,000 IN ONE DAY FROM AN INITIAL INVESTMENT OF NEARLY $1,400.00. Of course, this isn't necessarily an everday occurrence, but it all depends on what you're trading and how much you're risking. At the link below, there is a guy who has been making hundred of thousands trading options and he documents it for everybody.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=90738925

This is something to look into if you've ever wanted a career in the stock market, but never quite had to money or time to look into it. It's time to stop living paycheck to paycheck. If you have any questions, I'll try to answer them.
 

Fmju

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Hmmm I might look into this when I start makin some real money
 

LionofJudah

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Hmmm I might look into this when I start makin some real money

Get like a grand together and open an account at OptionsHouse. They have an option simulator that lets you practice using virtual money. Then, when you're ready to trade for real, you can do that. Again, depending on the stock option price, you can spend $50 and make 5-10 times your investment. Or, you can make alot more...
 

Fmju

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Get like a grand together and open an account at OptionsHouse. They have an option simulator that lets you practice using virtual money. Then, when you're ready to trade for real, you can do that. Again, depending on the stock option price, you can spend $50 and make 5-10 times your investment. Or, you can make alot more...


Props on the info breh. I might start practicing in my free time. Hopefully it isn't too hard to pick up and by time I have some real money I can get into it and make some profit
 

LionofJudah

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Props on the info breh. I might start practicing in my free time. Hopefully it isn't too hard to pick up and by time I have some real money I can get into it and make some profit

No doubt...and this is trading options at a very basic level. There are many different ways to trade depending on your strategy, but I like to keep it simple. Look into it when you get a chance.
 

Auger

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how much time of a day is required to constantly watch your stocks adequately?

I like how you don't use a broker, is it cheaper that way?
 

LionofJudah

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how much time of a day is required to constantly watch your stocks adequately?

I like how you don't use a broker, is it cheaper that way?

The amount of time really depends on what dedication you want to give to it. It's something I've known I wanted to do for awhile, so I have to do it from market open to close (plus afterhours researching plays and setups). I had a government job awhile back, and all I wanted to do was check my phone to see what was going on. It all depends on how you want to trade though. If you're not into daytrading due to another job and whatnot, you can always set your limit orders for buying and selling and trade like that so you don't have to watch it constantly, but it's hard to take advantage of opportunities that way. Also, i do use a broker. That screenshot is from Scottrade, but I would recommend Optionshouse. They have two fee schedules-$5 flat rate trade for up to five options and each thereafter is $1, or $8.50 a trade flat and each contract is .15. Much better than going through anyone else I've seen. Commission WILL eat into your profits (and make losses that much worse).
 

ThumpDaddy

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I really, really want to get into this. There's a guy at work that says he's into it but when you try to ask him about it he acts like you're asking him for his SS#:comeon:Then he starts talking in riddles :what:But I'm gonna sub this thread and see what I can do to get started in this.
 
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