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All the my holdings are starting to balance back out as of now. Still a loss, but a lot less from what it was at early this morning.
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Jul 8, 2014 19:50
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Shear Modulus posted:It's just a down day in general and tech stocks are high beta. That's about it.
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Jul 8, 2014 20:37
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Bought the GLUU dip today. 
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Jul 8, 2014 21:20
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Nephzinho posted:If you're not sure, do nothing. You can't lose your shirt watching the roller coaster/trying to catch the knife. I got some AMZN calls after making a nice profit on NFLX puts (1400%) the last two days. Still super pissed I didn't get an extra week on the 462.5s and 450s I had last week. :\
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Jul 8, 2014 23:01
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For some more clarification on options: You buy contracts in lots of 100, at a specific strike price, with either a call or a put. There is a premium associated with that contract, which costs 100x premium. Now you own this contract to do whatever with, and as the real price of the stock changes, your contract grows more or less valuable. But everyone here mostly sells off the contract before it expires anyway, and makes a profit off the change in the premium, right? So a premium of $.15, costs $15, and if it moves favorably, you could net some cash. Premium prices are derived from time left on the contract, and volatility. But that volatility seems subjective, right? Are there other factors for premium prices, or do all brokerages get the same premiums for a given strike price and expiration date?
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Jul 8, 2014 23:17
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Noah posted:For some more clarification on options: The price of an option in general is subjective, but then again so is the price of any stock or asset to a certain degree. That said, there are some components of an option's price that are intrinsic and some that are extrinsic. The intrinsic value is simply the positive difference (if there is one) between the strike price of the option and the current price of the underlying stock. In the case of a call, this difference will be positive if the strike price is lower than the underlying price. In the case of a put, the difference is positive if the strike price is higher than the underlying price. In either of these cases, the option is termed "in the money" and if were excercised immediately, it would net this amount: hence the term "intrinsic" value. Options that are "out of the money" do not have an intrinsic value... yet. The idea is that they may eventually achieve some amount of intrinsic value based on movements in the underlying price, and thus they command a price that depends on the perceived likelyhood that they will become in the money prior to expiring. For out of the money options, this "extrinsic value" (usually called the time value) is the entire premium. But that does not mean that options already in the money do not also have time value, because they do, depending on the perceived likelyhood that they may go further into the money prior to expiration. As to what effects these components of option pricing, the intrinsic value is ONLY affected by the strike of the option compared to the current price of the underlying. The time value portion is affected by a number of factors, probably most important being the time left until expiration and the volatility (both anticipated AND historical). However, the time value is also affected by interest rates (currently an almost insignificant factor) and dividends. Volatility might seem subjective, but for a given stock there is a certain amount of historical volatility that is known, and also anticipated volatility can in some cases be predicted to a degree (i.e. if there is an earnings report coming up, then it would be expected that volatility should be higher than otherwise). ALL of these factors (except for the strike price and expiration date) can change on the fly, and thus the prices of options fluctuates depending on those variables. Confused yet? flowinprose fucked around with this message at 23:52 on Jul 8, 2014 |
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Jul 8, 2014 23:47
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I think I get it, haha. I find a symbol, pick a strike price, pick a call or a put, pick an expiration date based on volatility factors, then buy the contract paying the premium, then pay any addition fees / commissions. Then as the underlying price fluctuates, the value of the option changes, and you want to sell this option to recoup premium, commissions, and tax, but also hope that someone will buy your contract from you. And you could put a limit stop, or a trailing stop, and then you could just ignore it(theoretically, i'm not suggesting you do so). Sometimes you win, sometimes you lose. And it's only not 100% gambling because there are historic and speculative factors that can influence your decision, but those at the same time also are effecting the volatility. I know what I said should be super simple and obvious, just making sure I understand it.
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Jul 9, 2014 00:32
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Noah posted:For some more clarification on options: The extrinsic values have Greek names, but the two that matter most are implied volatility and time decay. For more on Greeks, visit: http://en.wikipedia.org/wiki/Greeks_(finance) to learn all about option pricing. Anyways, implied volatility is just how much Mr Market expects the option/stock to move around. The higher the implied volatility, the more it will cost. Options are much more expensive during downturns. Your calls might not lose so much value in a downturn necessarily, and your puts will gain a lot more value; but if you have a call right after all that and implied volatility goes down while you bought your call when it was high, you could lose money even if you're right. Happened to me with TWTR calls, moved big my way, like 5%, and my options lost a little value, WTF right? High implied volatility is a great time to be selling options due to more worthwhile premiums. Time decay is just that options are more and more expensive the farther you buy out. If you think a big move is imminent, it makes no sense to buy a few months out when you could just buy one or two week options and make a lot more, and it allows you to go after bigger $ options like I do with stuff like AMZN and NFLX and PCLN. edit: You have to copy and paste that wiki link or just google "option greeks" 
ayekappy fucked around with this message at 01:23 on Jul 9, 2014 |
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Jul 9, 2014 01:18
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I'm still trying to wrap my head around how options actually function in the market as well. Do you write your options, or do you buy them and act as some sort of middleman? Are you ever on the hook for the shares if an option you bought-then-resold is exercised, or does it work that it's someone else's option that you're just flipping?
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Jul 9, 2014 01:40
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quote:Do you write your options, or do you buy them and act as some sort of middleman? Are you ever on the hook for the shares if an option you bought-then-resold is exercised, or does it work that it's someone else's option that you're just flipping? There's people offering options contracts, and people looking to buy them. If they agree on a price for the premium, then a contract is opened. The amount of this premium is whatever the market will bear, but it naturally reflects people's expectations for how the stock price will behave. From that opening point until expiry, the holder of the option can exercise at any time. When this happens, someone who has written one of these contracts gets "assigned", meaning they have to buy (for puts) or sell (for calls) the underlying shares at the given price. (There's some options that can't be exercised early, but most of the ones people talk about here - on individual stocks and what not - can be exercised at any time). If an option reaches its expiry date without being exercised, it vanishes. The way options often end, though, is that writers can "buy to close", meaning that they try to find someone who holds an option contract who's willing to close it in exchange for money (thus discharging the writer's obligation). It doesn't matter whether this is the original person who they opened a contract with; there's just a pool of people who are "short" the contract, and other people who are "long" - and these people make deals to open and close contracts. For both parties, it often makes sense to close the contract this way - actually trading the stocks can be a hassle. So no, you don't accidentally end up writing an option by buying one and then selling it or something. If you hold an option, selling it normally means it's being bought by someone who wrote an option and is closing it out. jmzero fucked around with this message at 02:23 on Jul 9, 2014 |
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Jul 9, 2014 02:17
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Are there any other people other then the underwriters buying options that are in the money? What exactly are they doing with it and what would their motivation be to buy it? Since the premium seems to be relative to the underlying stock value, I guess it wouldn't be beneficial to buy the option in the money, then exercise it?
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Jul 9, 2014 02:33
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It would be a good way to inefficiently lose money I suppose. (Unless it rises even more. Generally price is too high tho)
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Jul 9, 2014 02:39
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lol internet. posted:Are there any other people other then the underwriters buying options that are in the money? What exactly are they doing with it and what would their motivation be to buy it? Since the premium seems to be relative to the underlying stock value, I guess it wouldn't be beneficial to buy the option in the money, then exercise it? There's a few ways to justify buying an option in the money. Maybe you like the price of some asset today, and you're confident will appreciate in the long term. You anticipate having the capital to purchase it later, and you are willing to lock in a price right now so that when you have the capital you can buy it at the favorable price between now and expiry. Maybe you'd like exposure to some asset's growth without actually committing the capital to purchase it. The premiums on options are usually still cheaper than actually dedicating the capital to owning shares. I could buy a CALL on 100 shares of TSLA at 220 for $785, or I could buy 100 shares of TSLA for $22,260. The expected delta for both would be ~1 so long as TSLA stays above 220, but I get way more leverage out of the call. I also get wiped out much easier.
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Jul 9, 2014 15:54
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It also takes away most of the extrinsic value in comparison to the rest of the strikes; making it a little easier to manage too, in case you find yourself being incorrect. Speaking about TSLA, got some calls on that this morning! 230s for .92. Surprisingly not doing too well since I bought them with TSLA at $220.50, and it's at $222.61 now and I've lost .10 per contract! Must be that darn implied volatility dropping.
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Jul 9, 2014 17:17
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So even though the underlying price is higher, closer to your strike, its worth less because the volatility has decreased, ultimately making it more UNLIKELY that you'll actually achieve your strike price?
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Jul 9, 2014 17:46
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Noah posted:So even though the underlying price is higher, closer to your strike, its worth less because the volatility has decreased, ultimately making it more UNLIKELY that you'll actually achieve your strike price?
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Jul 9, 2014 17:59
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Noah posted:So even though the underlying price is higher, closer to your strike, its worth less because the volatility has decreased, ultimately making it more UNLIKELY that you'll actually achieve your strike price? Well, I wouldn't say that necessarily. Implied volatility is more about how volatile things will get, how risky an asset is. The volatility going down for my call kind of sucked, but doesn't mean it will be harder to get to my strike, in fact it may get easier.
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Jul 9, 2014 21:08
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ayekappy posted:Well, I wouldn't say that necessarily. Implied volatility is more about how volatile things will get, how risky an asset is. The volatility going down for my call kind of sucked, but doesn't mean it will be harder to get to my strike, in fact it may get easier. So why do you lose money?
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Jul 9, 2014 22:33
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Noah posted:So why do you lose money? Because it will make me money tomorrow more than likely, but everything else I bought did not have that effect. NUGT didn't lose etc. I lost a little bit of money to make some.
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Jul 9, 2014 23:59
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I mean, WHY. What is the underlying theory of how it could lose you money? If its not volatility, and it might have gotten easier for the strike to be reached, wouldn't that not negate timeliness?
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Jul 10, 2014 00:18
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I just got my first brokerage account with $1,000 for trading. Anyone have any tips/advice? I am not sure what to do with it yet, thinking of investing it all in SPY (S&P index) and waiting for a few months.
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Jul 10, 2014 00:35
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CountChocula97 posted:I just got my first brokerage account with $1,000 for trading. Trade until you loose it all. Rinse and repeat.
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Jul 10, 2014 00:41
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The Risk posted:Trade until you loose it all. Rinse and repeat. I'm acutally gonna triple or double that $1K, since I'm brilliant
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Jul 10, 2014 00:49
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CountChocula97 posted:I just got my first brokerage account with $1,000 for trading. save another $4k
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Jul 10, 2014 01:28
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CountChocula97 posted:I just got my first brokerage account with $1,000 for trading. My advice is to have more money.
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Jul 10, 2014 01:32
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Ehh. I think if your goal is to learn how to trade (as in, learn the mechanics of using an online trading site, get a feel for what it's like to buy, own, and sell a stock, test your own emotional response to rises and falls, figure out how to set a limit, that kind of stuff), you can do it with $1000. I did. Although it might be better, if you haven't already, to use one of the paper-trading sites to trade with pretend money for a while. If you actively trade $1000 uou are going to get eaten alive by trade fees, though, so you really cannot expect to do well with only $1000. I mean, if there's some stock you really want to just buy and hold for the next few years, fine, there's nothing wrong with that (assuming you are aware of and comfortable with the risk that accompanies a total lack of diversification). But that doesn't seem to be what this thread is about, very much. I'm assuming of course that $1000 is not a significant proportion of your net worth, Chocula. If it is, then you should put it into a savings account and go visit the long-term savings and retirement thread.
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Jul 10, 2014 01:33
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CountChocula97 posted:I just got my first brokerage account with $1,000 for trading. You can only buy 5 shares with that, in a couple months, I don't think you'll have much of a return. Buy cheaper but not poo poo stock that has a chance of growing as 1000 isn't much to be serious or worried about. At least I hope. I'd say go BlackBerry with $1000. I bought into a index fund though with my initial investment because it forced me to learn more about trading\stock market since I didn't want to lose my money.
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Jul 10, 2014 01:35
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It's lose lose because if you want to learn anything you have to make transactions, and you will be savaged by transaction fees with $1k. I also believe that you can't really learn too much paper trading because so much of it is emotional. You can learn the basic basics, but you don't know what how you'll react to losing a shitload of money until it happens. And it will at some point.
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Jul 10, 2014 01:38
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For clarification, I'm planning on investing the 1,000 until I save up more money in the mean time and reach my goal of a few thousand more. I know you can't make much with 1,000 but that doesn't mean I shouldn't try to milk it to get whatever I want out of it, even if its about $100, right? Also, I'm mostly doing it to learn the ropes before I get more money. (As in, I don't want to have 5,000 but then have it be my very first real trade not on a simulator, I wanna get a 'feel' for everything at least) if anyone wants to talk to me through e-mail or something let me know (no plat). I'd love to throw some stock ideas around District Selectman posted:It's lose lose because if you want to learn anything you have to make transactions, and you will be savaged by transaction fees with $1k. my fee is $5, im planning on investing it all into one stock. I don't think the fee will kill or even hurt really. that's less than 1% if i invest the whole 1k
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Jul 10, 2014 01:39
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lol internet. posted:You can only buy 5 shares with that, in a couple months, I don't think you'll have much of a return. Buy cheaper but not poo poo stock that has a chance of growing as 1000 isn't much to be serious or worried about. At least I hope. I really hope you don't mean cheap as in "price per stock is less". What are you saying here?
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Jul 10, 2014 01:41
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CountChocula97 posted:For clarification, I'm planning on investing the 1,000 until I save up more money in the mean time and reach my goal of a few thousand more. I know you can't make much with 1,000 but that doesn't mean I shouldn't try to milk it to get whatever I want out of it, even if its about $100, right? Also, I'm mostly doing it to learn the ropes before I get more money. (As in, I don't want to have 5,000 but then have it be my very first real trade not on a simulator, I wanna get a 'feel' for everything at least) Oh, so you only want a 10% return? In a few months. No big deal.
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Jul 10, 2014 01:45
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CountChocula97 posted:I just got my first brokerage account with $1,000 for trading. Options. At that low, you need the leverage to outweigh the commissions. I loaded my existing options account with $400 about three months ago and promised not to put in any more. It helps that I have been doing this off and on for 10 years now though and finally had an "Ah Ha" leap in trading ability around March after I went full autism on the subject matter. I have much more than $400 in there now. It's also still a cash option account from my idiotic pattern day trading days before I royally screwed it in options betting against Bernanke when I had $15k in calls @ S&P 680 the days / weeks before ( :'( ), I can upgrade it whenever; but I admit it's made me think more about what I have to do etc since I have to account for the day to settle etc. It's like training with weights on your feet for a race. As to the guy that said lose it all, I say kinda be like that. Don't intentionally lose it all of course, but don't give a poo poo. Take risks and LEARN from the eventual mistakes. Dwight even went in on me with some trades a few weeks ago. I did TSLA, DRYS and FB. Dwight only filled TSLA, but I got all 3 because I am a lunatic and chase. DRYS and FB BANKED. Dwight and I got screwed on TSLA, but if we had gotten one extra week on the calls (just got same week) we'd have made WAY over 1000% the next Monday and Tuesday. These kind of sick moves happen all the time. All you have to do is step into the minefield, except instead of getting blown up, you make lots of money.) This $1k should hopefully mean nothing to you other than a vessel to learn. All the people that make money in trading have LOST substantial money at one point or another. $50 will get you a pretty decent option for <$150 stocks(But, for instance, I bought a NFLX 432.5 put on Monday for $13 because it's all I had settled, and sold it for $160 on Tuesday, could have sold it for $300 at one point. I think NFLX went down a total of 3% from when I bought the put.) [Also, I don't recommend having 100% of your capital invested at all times, this is a challenge for me, and I happen to be right like 80% of the time, so that's why I am balls to the wall, maybe try just 10-20% since you have such a small stack, aim for 1-2% eventually or less.] If you get good at knowing when a stock is about to move, short dated ones are the BEST. Don't let the chop take all your time money; because poo poo's probably about to get kind of choppy. That's when you have to learn how to shift between day trading and swing trading and what you might want to have long term. That's what you have to really learn; is how to adapt. Choppy markets = day trading Smooth steady = swing trading. Learn chart patterns and indicators and how to read candlesticks and how to gauge where resistance will be and how channels and trend lines work. It's invaluable for shorter term trading. Also, don't say you're opening a trading account, and then say you're going to buy SPY and hold it for a few months. :-P ayekappy fucked around with this message at 02:10 on Jul 10, 2014 |
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Jul 10, 2014 01:48
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CountChocula97 posted:$100, right?
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Jul 10, 2014 01:55
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CountChocula, definitely start trading short term options with your $1k. If you do, will you promise to share your trades, open kimono style? Show it all baby.
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Jul 10, 2014 01:55
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CountChocula97 posted:For clarification, I'm planning on investing the 1,000 until I save up more money in the mean time and reach my goal of a few thousand more. I know you can't make much with 1,000 but that doesn't mean I shouldn't try to milk it to get whatever I want out of it, even if its about $100, right? Also, I'm mostly doing it to learn the ropes before I get more money. (As in, I don't want to have 5,000 but then have it be my very first real trade not on a simulator, I wanna get a 'feel' for everything at least) $5 to buy and $5 to sell. And this means you're not planning on being able to ease yourself into or out of a position, and you're planning to make exactly two trades, one to buy with all your money and one to sell all your stock. And then you're hoping that with this one single trade, you'll make a 10% profit? Have you read anything about stock trading? Maybe a book or something? How long do you expect to hold your stock before you get that $100?
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Jul 10, 2014 02:00
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District Selectman posted:CountChocula, definitely start trading short term options with your $1k. If you do, will you promise to share your trades, open kimono style? Show it all baby. It may seem insane, but he'd learn so much. Like if he had started with $1k more, he could get free trades for 60+ days from multiple brokerages. And frankly, if you shot 5 $50 call options in an uptrend, you'd be pretty well off if you knew when to sell and stuff. (I don't look for low points, I look for it's going higher points[I guess that's a low] and when it will probably stop / falter points.)
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Jul 10, 2014 02:13
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District Selectman posted:I really hope you don't mean cheap as in "price per stock is less". What are you saying here? Kind of what I'm saying. Basically with $1000, take a bigger risk. How did SPY do in the last 3 months? If he bought 5 shares, he would of got a $60 return roughly. I'm saying look for a good company that is doing poo poo in the market and more then likely will bounce back. if he just gets a bluechip stock, or a mature high priced stock, there won't be any gains worthwhile with only $1000. Since, it's not that much money, he might as well risk it. Also consider it a motivation to speed up his learning process since he has money on the line. It's only $1000 bucks, why even bother with a $200/share stock. If he had more money for his initial investment, I'd say go half ETF, and half on something more risky as well.
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Jul 10, 2014 02:13
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CountChocula97 posted:For clarification, I'm planning on investing the 1,000 until I save up more money in the mean time and reach my goal of a few thousand more. I know you can't make much with 1,000 but that doesn't mean I shouldn't try to milk it to get whatever I want out of it, even if its about $100, right? Also, I'm mostly doing it to learn the ropes before I get more money. (As in, I don't want to have 5,000 but then have it be my very first real trade not on a simulator, I wanna get a 'feel' for everything at least) You aren't ready at this point with your knowledge and funds on hand to start trading at all. I may sound a bit presumptious here, but if you are really coming into a thread like this to get advice on what to do with $1000 then it is clear you really don't know what you are getting yourself into. The best investment that you could make right now is to take some of that $1000 and purchase some books and do a lot of reading. Once you have done that, if you still think this is something you want to do (depending on what books you read, it might entirely dissuade you that trading is a worthy pursuit at all), then make sure you have saved a significant amount of capital (probably a minimum of $3k) and have spent a significant amount of time paper trading so that you figure out a system of what would realistically work with the balance you will have on hand. Any good gambler will tell you that bankroll management is one of the most important aspects of their craft. Do not come in and drop you entire bankroll and expect things to work out well. flowinprose fucked around with this message at 02:18 on Jul 10, 2014 |
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Jul 10, 2014 02:15
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Trader, if you want to buy and hold and make good profits, may I suggest you buy NIOBF. It's a penny stock miner at about .62 a share. Four months ago it was .10 or so. The CEO used to be CEO of Molycorp. Molycorp found a deposit of Niobium in the 60's, and then revisited it in the 90's, but ended up going to other projects because Niobium wasn't as in much demand. Niobium is a rare earth element that makes steel stronger and also makes superconductive materials. Its demand is increasing. The current CEO of Niocorp took the reigns, after buying 8% of the company. Remember, he was the CEO of the company that passed up the mine. They are doing all the core sampling this summer. Results are 2nd best in the world. The feasibility report is due Q1 2015. The CEO owns 8-10% of the company. He knows how feasible the mine is. Molycorp knew it, they went there twice, just there wasn't much Niobium demand. There is now, and the former CEO of Molycorp invested substantially and then took the reigns of the company mining this resource. Did I mention there are just two other major mines in the world? Brazil and Canada. There are tariffs on both. This mine is in Elk Creek, NE. I think it will work out better than some SPY.
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Jul 10, 2014 02:20
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I think with $1000 you could absolutely search and find a good company that you think is undervalued, and plan to buy the stock and hold for at least a year. If you don't have a 1+ year outlook, then yeah you should wait. It's probably impractical to "trade" with less than 25k because of that weird 3 day clearing rule anyway.
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Jul 10, 2014 02:24
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