Boiler Room: The Official Stock Market Discussion

Maddmike

Maddmike

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Brehs I have a question:

I brought some stock and while monitoring it on stocktwit, someone asked the question if they should stay in for the long run, when someone replyed they wouldn't because of decay.

What do they mean by decay?
 
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Maddmike said:
Brehs I have a question:

I brought some stock and while monitoring it on stocktwit, someone asked the question if they should stay in for the long run, when someone replyed they wouldn't because of decay.

What do they mean by decay?
Click to expand...

Time Decay Definition | Investopedia

He was most likely referring to an options trade.
 
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Maddmike said:
Brehs I have a question:

I brought some stock and while monitoring it on stocktwit, someone asked the question if they should stay in for the long run, when someone replyed they wouldn't because of decay.

What do they mean by decay?
Click to expand...

Is it a Volatility ETF?
 
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Maddmike said:
Brehs I have a question:

I brought some stock and while monitoring it on stocktwit, someone asked the question if they should stay in for the long run, when someone replyed they wouldn't because of decay.

What do they mean by decay?
Click to expand...

Most likely they were referring to the time decay of options. In options there are risk measures called "The Greeks". They include: Delta, Gamma, Theta, and Rho.

Theta is the options greek that represents the time decay of an option. Every professional options trader knows and implements the greeks to better manage their risk.
 
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Maddmike said:
Probably not because I don't even know what that is breh. I'm still reading up on the basics. It's UWTI stoc
Click to expand...
Careful with UWTI. It is a 3x leveraged ETN that tracks the OIL stock. So gains and losses will be amplified because of its leveraged nature. That's why UWTI is up ~3x more today than OIL. Use precaution. I wouldnt suggest Investing in these for beginners and especially not for the long haul.
 
Maddmike

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GoogleMe said:
Careful with UWTI. It is a 3x leveraged ETN that tracks the OIL stock. So gains and losses will be amplified because of its leveraged nature. That's why UWTI is up ~3x more today than OIL. Use precaution. I wouldnt suggest Investing in these for beginners and especially not for the long haul.
Click to expand...


:ohhh:

Appreciate that breh....I just saw where it was and thought of the potential. Good thing is I didn't buy that much (50 shares), but with the broker fees it looks like I'm gona lose $ unless it goes to about 2.00....

Question: UWTI was 60 dollars/share in 2014. It was at .70 last week. Do you ever see it going back that high?

S/n: I just signed up for robinhood...how long did it take your applications to go through
 
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Maddmike said:
:ohhh:

Appreciate that breh....I just saw where it was and thought of the potential. Good thing is I didn't buy that much (50 shares), but with the broker fees it looks like I'm gona lose $ unless it goes to about 2.00....

Question: UWTI was 60 dollars/share in 2014. It was at .70 last week. Do you ever see it going back that high?

S/n: I just signed up for robinhood...how long did it take your applications to go through
Click to expand...

UWTI has depreciated that much because it is 3x leveraged relative to the OIL stock. There are too many fundamental and macroeconomic factors to consider. And in this environment, I don't think anyone knows where oil prices are heading.
 
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