Don't trade stock options breh...

[Lakers Offseason]

double

 

[stealthbomber]

I control my investments and move them freely as I wish. I'm not obligated to any one of these companies. I've made money off of 'corrupt' companies when their share price were rising. I ride them on the way up.
And short them on the way down

Companies may be corrupt, but the market sets itself. It's up to the investors to be aware just like it's up to investors who own stores to be aware of their books.

like i said if you know what you're doing, it can be very lucrative. but let's not act like the system isn't corrupt at the top levels. its all insider trading, price manipulation, backroom deals, etc. ill pass on that.

 

[Marciano]

if you know what you're doing, more power to you. the average joe blow trying to make money in the stocks is better off buying precious metal.



i agree but see my post above. the system is rigged for those in the know (wall st, investment bankers, etc) and the majority stock holders. some guy dabbling with a few hundred every year might be ok but if you're investing a majority of your income in stocks you're making a mistake imho.

Yeah, I work in the financial field with the plan to become an RIA within the next couple years

 

[stealthbomber]

Yeah, I work in the financial field with the plan to become an RIA within the next couple years

good shyt. got some info for me? i wont tell

 

[50CentStan]

So is this possible brehs, lets say I have $5000, I buy stock xyz at $100/share. Is there a way I can set it up so whenever stock xyz hits $115 I sell my shares automatically? If this is possible, I don't see how you can lose money. Even if the stock goes down to lets say $90 unless there's a major issue if the hovering rate is about $110-$117 it should hit my desired value again eventually. Somebody coach me. Thanks.

 

[Marciano]

good shyt. got some info for me? i wont tell

Well, I don't feel "buy & hold" is dead and it will never die. You look at Buffet's portfolio, they've held the same stock in some companies for years and reaped crazy. Invest in companies that you have some knowledge about or actually use their products such as P&G, Johnson & Johnson, Walmart, etc.

If that's too rich for your blood, look for companies that were beaten down from the great recession. Look at their balance sheets, quarterly statements, etc. I'm long Ford because they weathered the storm without government help. They also are looking to expand in Asia, especially China. And they just announced that they forecast a dividend increase within this decade. They are currently trading around $16/share. I wish I loaded up when they closed under $2 a share back in 2009.

Above all, research, research, research and research some more! LOL

 

[nomoreneveragain]

I'm still trying to figure out the what the OP means ... title says don't trade options but reading the post and learning about options makes me want to trade options

 

[50CentStan]

I'm still trying to figure out the what the OP means ... title says don't trade options but reading the post and learning about options makes me want to trade options

its a coli thing, like "get married brehs"

 

[LionofJudah]

Im studying for my Series 7 & there is a lot of truth in this thread

Always good to get those licenses. I was going to have to get my Series 7 and 63 when I briefly worked at TDAmeritrade, but I found a job back home out of state so I had to move. Good luck.

 

[LionofJudah]

I do regular stocks. Options are to confusing

Nah, they're easy man. I agree that things like straddles and strangles and stuff like that is more difficult, but I strictly stick with buying and selling put/call options. It's just like buying stock breh. However, it is a bit different when you throw in time decay.

So you can buy in before the contract date runs out?

Yep, all options expire eventually. But there are many different options you can buy-weekly, monthly, quarterly, yearly. I definitely deal more with monthly and weeklies. Alot of times, it's better to go with the monthlies so you have some time to let your trade play out, but weeklies are cheaper and are usually where a greater amount of money to be made is.

ima about to invest 2k brehs

i know some shyt already (my teacher was a successful trader so he tought me a lot)

If i lose it so be it

If I could say anything to you to ensure success, I would say walk, don't run into your trades. A bunch of small gains is much better than a bigger gain because bigger gains lead to more recklessness with your trading, and you can end up in the red if you're not careful. Trade based on your account size where you're not risking that much if a trade doesn't go your way. Concentrate first on making the majority of your trades winners.

I'm about to jump in..but am taking the advice of using the virtual money simulator.

This is absolutely the way to go, probably for a few weeks I'd say. Make sure you understand how options deal with time decay also and it will help you alot. Also, trade the simulator the exact same way you would trade your own account, so if you only have $1000 in real life to work with, make sure you only deal with $1000 on the simulator.

 

[LionofJudah]

Do you use leverage at all?

Also do you stick to particular stocks, or do you jump around?

Options can't be leveraged because they are not marginable. Options are derivatives and their values are based on underlying entities such as the stock, or an index for example. They are essentially considered 'riskier' because they are eventually going to expire and become worthless if not exercised. I'll trade multiple different stock options, but it's always good to have some key ones that you like to trade and monitor. You start to get comfortable with the way a stock trades and it's movements are much more predictable.

I took a $3k loss on what couldve been a $53,000 gain if I wouldve held on. Stock is trading at 4x the price I paid. Invest in stocks brehs

Ive been trading since '09 back when there were surefire stocks like Apple (sub $150), Ford, Citibank (post bailout). Older I get, the less Ive been trading. Its really a rigged system where those in the access to the inside info being passed around and those with the means to get involved w/ high frequency/speed trading win while the fools with get rich quick dreams lose. Never invest in nothing that you cant control the outcome or have the means for a competitive advantage, otherwise youd be better going to the Vegas sportsbooks.

That really sucks, but you can't look at what you had three years ago and be disappointed that the stock has gained so much ground since then. Trading and investing are two different things and you have to take the emotion out of your trade (very hard, I know) and know what you're holding. That stock dropped six dollars in one day, so a bounce in the short term was probably very likely. Plus, options allow you to spend alot less money and you can get a much better return.

Thank you, friend. Lets master the stock market. Just kidding, this is too much like gambling.

Sorry, but the only people who say things like that have no idea what they're talking about. There's much more to it than just red or black.

im no options trader but i dabble in abit of everything so i know the basics. here are some questions for you breh:

1) how do you account for the risk of not being "in the money" after your option has expired, how do you reduce that risk?

2) have you tried straddling (or hedging) option contracts and did it work for you?

3) how do you personally know what to buy and when to buy it? do you use any type of econometric calculations to forecast prices such as delta calculations? do you use chart formations? or do you use technical indicators and if so which ones do you use?

4) which type contract do you trade american or european? and why?

5) do you leverage? in fact can options even be leveraged? if so how do you operate within your margin limit (or reduce margin call risks) and what leverage ratio do you use?.

1-Well, you don't really want to be holding an option after it expires. If that's the case, it meant your trade went in the wrong direction and is probably worthless unless . Options don't have to be 'in the money' to profit off of them. For example, I buy a call option at a $20 strike price when the stock is trading at $16. If the stock increases to $18, you've definitely made money there. But if the option is going to expire soon, the value might not be what it could be because there is doubt if that option is ever going to go 'in the money' before expiration. So to be honest, I don't necessarily buy an option for it to go in the money (although it's nice when it does), I just try to make my money on the fluctuation of the option price itself.

2-Nope, I simply buy and sell calls/puts. The fact that you can straddle and do other things like that is great because it could help you turn a loser trade into a winning one. In the future, i'd like to try those strategies out.

3-For me, I'm traditionally a bounce and oversold player. Rarely will I trade a stock based on rather or not I simply think it's going up or down. I like when it's overbought (High RSI) and has to come down eventually, or beat down so much, that it should bounce (low RSI). I don't deal with delta and I do use charts, but on a very basic level. I'm mostly looking for how a stock performed in the past and what's going on currently to predict whether or not the trade will be profitable. People who get so in depth with technical analysis to me pretty much overdo it IMO, but I'm sure it works out for some. I mostly use RSI, Williams %, Moving Averages, and Chaikin Oscillator as my indicators.

4-American only. Not sure if my broker has European options, but I've never really looked into it.

5-Options can't be leveraged, but I do use leverage when I trade at a prop firm daytrading stocks. The leverage is 10-1, but pretty much all trades are closed the same day. If you want to hold overnight, you can only hold 2-1.

Good questions, ask away if you have anymore.

 

[Diondon]

I'd rather stick with regular stocks

I was making a killing before that bytchass recession

Things are looking up these days though.

 

[LionofJudah]

my advise also is not to play around during earnings season. because it is strict gambling at that point. to anybody whos interested I have a list of about 5-10 rules you must abide by when playing with options. They will help you minimize losses but any breach and it can fukk you up bad. Speaking from experience.

Much better with equities than options

Big money is made during earnings. I wouldn't say it's gambling at all if you've done research on how that sector and product/business that the stock comes from has been doing all quarter. The writing is on the wall for most of them.

I've read a few things that say technical analysis is simply a fundamental strategy that most traders do not even do. Cause it puts you in that losing 90%

Opinion?

Cause I'm trying to form my own angle that kind of working, well on demo forex anyway. This post inspires me to explore options

Technical analysis is great, but everyone has to remember that it's not the only thing that factors in. Some traders trade strictly off this and are successful, while some rarely put much faith in it. It's all just different strokes for different folks and developing YOUR strategy.

 

[LionofJudah]

So is this possible brehs, lets say I have $5000, I buy stock xyz at $100/share. Is there a way I can set it up so whenever stock xyz hits $115 I sell my shares automatically? If this is possible, I don't see how you can lose money. Even if the stock goes down to lets say $90 unless there's a major issue if the hovering rate is about $110-$117 it should hit my desired value again eventually. Somebody coach me. Thanks.

Yeah, you would just set a limit sell order GTC (good till canceled) at $115. And it will probably go up again to that level, but the question is how long, and how long are you willing to wait for it? I would buy a monthly (or maybe a weekly depending on the situation) call option at 110 or 105, and probably make way more than the $500 you would of a price increase from $100-$110.

Let's say you but 20 $110 call options for .50 each for a total of $1000. If this stock goes close to 'in the money', you've probably tripled your money right there. The return on options is MUCH better than returns on stocks, especially for the average Joe.

 

[LionofJudah]

Here are a few setups I'm looking at getting into soon. I like trading BRK/B because the options are cheap so you're able to buy more, and it kind of moves in a predictable pattern. If you look at the chart the past month, you can see a 'W' is forming and the stock tested it's highs twice, but failed to break out over. I think this third time pushes it over 120 to around 125 in the next month. Looking at Sep 125 Call Options for .15 or lower.

This one (FIO) is ripe for a bounce. Look to grab some Sep 12 Call options around .25-.30. You could also grab some 11 calls around .10-.15 on this one, and probably make some dough, but you have to be careful because they expire this week.

EDIT: It won't display for some reason, so check out the charts on StockCharts yourselves.