Don't trade stock options breh...

[Kasino416]

@Sachs, Fifth Avenue are you the same person as @Nudie. ? Both Cdn's in Uni, interested in finance/i banking - we spoke briefly a few times.
Anyway, I do agree with the "irresponsible" advice part someone was talking about, options trading, hell stock trading itself is extremely strenuous and the losses def outweigh the wins. I would suggest gearing your education more toward going "long", 401k, rrsp's, etf's etc. Theres a reason why unaccredited investors arent allowed to invest in hedge funds, a lot of these strategies are extremely risky.

I would suggest researching a few companies thoroughly, then going long in them. Dude above me with the 86% YTD return should know that definitely isnt realistic - for you to say that is highly irresponsible as well. The best professional money managers in the world pull nowhere near those returns.

FYI, im a finance major and I do like learning the markets, prob do CFA or MBA after undergrad and a bit of prof experience in that field. The stock market can be very unforgiving, tread cautious breh's.


My fav stock @ the moment it Prana Biotech, I've watched it climb from the mid 3's to a high of 6.18 last week.

 

[havoc]

If you put a little more effort in your portfolio, your return could have been greater the past 2 years.

My returns YTD alone has been 86%

 

[LionofJudah]

Most people who have degrees in Finance can't trade for shyt. Always SOMEONE to talk shyt. Amazing..

 

[TheBigBopper]

You are giving irresponsible advice. "Stop living paycheck to paycheck" but no kinds of indications of what position someone should be in before they start investing, no mentions on how much to hedge, the whole idea that someone has to trade stocks to not live paycheck to paycheck....

You trying to teach nikkas how to sprint before they can even crawl.... telling people to live within their means and make a budget would be the better thing to do

This

 

[LionofJudah]

This

Explain how to 'hedge' a daytrade, and don't just copy and paste from a finance website either.

 

[Crownheights718]

The OP is a very brief and not detailed intro. I read through a few comments. nikkas are ignorant. Lmao.

Shout out to @LionofJudah tho. Nice thread.

It's not about just buying options and hoping the market swings one way, it's more about having strategy to options, or stocks for that matter, that allow you to make a profit based on your strategy. That's the key to success. You have to understand what you're doing, determine the amount of risk you want to take and build a strategy around that. Most importantly, you have to hedge your risk!!!!

I see on the last post that @LionofJudah asked for someone to explain how to hedge. That's tough to do in a post. Lol. I can write pages on how to hedge. It depends on you're outtake on the market, whether you you think the market is going to go up or down, you would then determine whether you are going to take a bullish approach or bearish approach and you can maneuver in numerous ways.

In general, options give you the ability to trade a derivative that's based on an underlying without having the capital needed to actually purchase the underlying. Example, say you can't afford to purchase a particular stock (AAPL), because it's so damn expensive. You can get an option contract (either call or put) and trade on that option contract. The option contract's worth will be directly tied to the underlying, in this case the AAPL stock. So, what does this mean? Let's say you buy a call option (gives you the right, but not the obligation) to purchase 100 shares of AAPL stock at $400 and it cost $50 (I'm just using this as an example, don't scrutinize me for the price, that is sure to be incorrect). Since an option contract trades per 100 shares, this will cost you a total of $500. So, you just bought one call option on apple with a stike price of $400 for $500. If you wanted to buy the shares outright you would have to pay the share price per shares of stock. As you can see one share would already cost you $400!!! Let's move on..... If the actual stock price of apple is valued higher than $400, since your call option is directly tied to the underlying (stock), your call option contract has just become profitable. So, if the stock is trading at $500, your option contract has just went up in value by $10,000. Someone would want to buy this contract off of you, because this call option contract allows you to exercise the call of 100 shares of apple stock at $400 ($40,000) and turn around and sell the stock on the open market for $500 a share ($50,000). To avoid going through all the steps of exercising the call and selling the stock, you would just trade your call option contract for the profit you are expecting. That's the jist. For a put option, it would be vice versa.

Hedging strategies come in to pay with combinations of calls n puts and having a naked call and so forth. Too much for this forum.

But, a tidbit for all who own stock. Options can be of interest to you all well. You can make money in the option market for the stock you own. You can sell calls and sell puts to get the premium (get paid) based on the stock you own. You don't necessarily have to own the stock, but it's a little less risky if you do. You can really get creative with hedging strategies in this position with Buy-write strategies, spreads, and straddles.


I think I've wrote a lot, cot damn!!

Feel free to correct any areas I was wrong in, I don't feel like reading my work.

Shout out to da gawd @Brooklynzson

 

[Crownheights718]

Ooh another thing. You have to learn your craft. True, finance majors can be people who can't trade for ish, but at the same time as a finance major you are exposed to all the right education to do what you need to do. With that being said, people who try they best to practice playing ball can possibly be trash as well.

 

[LionofJudah]

The OP is a very brief and not detailed intro. I read through a few comments. nikkas are ignorant. Lmao.

Shout out to @LionofJudah tho. Nice thread.

It's not about just buying options and hoping the market swings one way, it's more about having strategy to options, or stocks for that matter, that allow you to make a profit based on your strategy. That's the key to success. You have to understand what you're doing, determine the amount of risk you want to take and build a strategy around that. Most importantly, you have to hedge your risk!!!!

I see on the last post that @LionofJudah asked for someone to explain how to hedge. That's tough to do in a post. Lol. I can write pages on how to hedge. It depends on you're outtake on the market, whether you you think the market is going to go up or down, you would then determine whether you are going to take a bullish approach or bearish approach and you can maneuver in numerous ways.

In general, options give you the ability to trade a derivative that's based on an underlying without having the capital needed to actually purchase the underlying. Example, say you can't afford to purchase a particular stock (AAPL), because it's so damn expensive. You can get an option contract (either call or put) and trade on that option contract. The option contract's worth will be directly tied to the underlying, in this case the AAPL stock. So, what does this mean? Let's say you buy a call option (gives you the right, but not the obligation) to purchase 100 shares of AAPL stock at $400 and it cost $50 (I'm just using this as an example, don't scrutinize me for the price, that is sure to be incorrect). Since an option contract trades per 100 shares, this will cost you a total of $500. So, you just bought one call option on apple with a stike price of $400 for $500. If you wanted to buy the shares outright you would have to pay the share price per shares of stock. As you can see one share would already cost you $400!!! Let's move on..... If the actual stock price of apple is valued higher than $400, since your call option is directly tied to the underlying (stock), your call option contract has just become profitable. So, if the stock is trading at $500, your option contract has just went up in value by $10,000. Someone would want to buy this contract off of you, because this call option contract allows you to exercise the call of 100 shares of apple stock at $400 ($40,000) and turn around and sell the stock on the open market for $500 a share ($50,000). To avoid going through all the steps of exercising the call and selling the stock, you would just trade your call option contract for the profit you are expecting. That's the jist. For a put option, it would be vice versa.

Hedging strategies come in to pay with combinations of calls n puts and having a naked call and so forth. Too much for this forum.

But, a tidbit for all who own stock. Options can be of interest to you all well. You can make money in the option market for the stock you own. You can sell calls and sell puts to get the premium (get paid) based on the stock you own. You don't necessarily have to own the stock, but it's a little less risky if you do. You can really get creative with hedging strategies in this position with Buy-write strategies, spreads, and straddles.


I think I've wrote a lot, cot damn!!

Feel free to correct any areas I was wrong in, I don't feel like reading my work.

Shout out to da gawd @Brooklynzson

This is a man that knows what he speaks. But I would say that naked call writing and all that while also being too advanced (I don't mess with it myself), it costs a good amount of money to do. You have to literally buy the amount of stock that you're 'writing' with options if it gets exercised, and I know people here don't have that type of money. That's why I'm trying to keep it as basic as possible with simple buys of puts/calls, and mostly for daytrading, or swingtrading. Great info in this post though.

 

[L68]

--

 

[☑︎#VoteDemocrat]

Give me books to read.

Now.

 

[Ohene]

@Sachs, Fifth Avenue are you the same person as @Nudie. ? Both Cdn's in Uni, interested in finance/i banking - we spoke briefly a few times.
Anyway, I do agree with the "irresponsible" advice part someone was talking about, options trading, hell stock trading itself is extremely strenuous and the losses def outweigh the wins. I would suggest gearing your education more toward going "long", 401k, rrsp's, etf's etc. Theres a reason why unaccredited investors arent allowed to invest in hedge funds, a lot of these strategies are extremely risky.

I would suggest researching a few companies thoroughly, then going long in them. Dude above me with the 86% YTD return should know that definitely isnt realistic - for you to say that is highly irresponsible as well. The best professional money managers in the world pull nowhere near those returns.

FYI, im a finance major and I do like learning the markets, prob do CFA or MBA after undergrad and a bit of prof experience in that field. The stock market can be very unforgiving, tread cautious breh's.


My fav stock @ the moment it Prana Biotech, I've watched it climb from the mid 3's to a high of 6.18 last week.

Yea I'm the same as Nudie breh. How's sandstorm gold treating you? I hope you got out soon enough.

Senior year now so I banking recruiting starts next week...I've been making pitch books, equity research reports and even a DCF for one of the pitch books in preparation haha.

My favorite stock right now is probably Live Nation and AMC Networks. Amaya Gaming and MTY FOOD GROUP in Canada.

 

[Crownheights718]

Give me books to read.

Now.

http://www.optionseducation.org/en.html/

Youtube, and the broker sites usually have learning material.

 

[↓R↑LYB]

Can I use coli cash as collateral

 

[Calmye]

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...

this is a stupid question but is this the same as trading stock in NASDAQ?

 

[lightbearerchef]

@Brooklynzson why did yall ban this man brang this man bike