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I never day traded and I was probably purchasing 100 shares of something @ $4. The guys in the stock trading thread are actually trading real money, some of them.
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Apr 14, 2020 03:52
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Leperflesh posted:Yeah, 38k per day is thin enough. With the market trading from 8am to 4pm (8 hours), and that's an average of just 79 shares per minute, or one 100-lot trading at less than 1 per minute. If you put in a limit buy order for a few hundred shares a penny or two below the current ask, you may or may not get filled at all, and if you do, it could happen instantly or take a minute or two. Quotin' for the next page, because this is an excellent post. I knew most of the level 2 stuff you're referring to, and that's what prompted me to wonder how much of an effect I can have, and how low the volume has to be to make a difference. I think the numbers add up to mean I'm having a very small influence, but probably no one is paying attention at this level so I don't think it would actually change the market momentum in my case. Good to sound it out through your example. SO.. next question, how do you use a stop limit when you are short? My platform tells me I can't on buying, only on selling. In other words, on movement up, but not down. If I'm short an item, and I want to buy it as soon as it dips below, say the $43.00 mark in your example, I can set a limit order. But maybe I think it's going to move down further, and I want to buy as soon as it hits $40.00, but I don't want a bid of $40 sitting in level 2 info forever. For a sell, I can set a stop to trigger at $44, and limit at $44.50, but not the inverse. What is the correct way to manage this kind of action? And mods let me know if I should edit and move this to the stock thread as it's becoming less pertinent to long term investing. I read both threads and they merge in my head someteimes.
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Apr 14, 2020 16:12
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Dik Hz posted:Even in those positions, you're still wagering against other people and betting that you have more and better information. Not necessarily that you have more/better information but that you are interpreting that information better.
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Apr 14, 2020 18:34
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mr.belowaverage posted:Quotin' for the next page, because this is an excellent post. A good rule of thumb is to just assume there's always others paying attention. At the very least, computer programs/scripts paying attention. The high-frequency algos and big hedge funds don't bother with 100 shares of some microcap, but there's always lots of smaller traders - and I would guess also people interested in that specific company, like employees and insiders - who are watching all day every day looking for opportunities to make a couple bucks. And it's not hard for small-time traders to set up orders or scripts that "see" your trade activity and incorporate it into a decision tree that results in an automated trade. I also think it's safe to assume that live human beings are watching every single listed stock (and maybe every pink sheet stock too) at all times during and after hours. The market is big. But I agree with the conclusion anyway: don't worry too much about it. A limit or stop order sitting on L2 is giving some info to the other traders, but this isn't exactly like a game of poker where you're trying to read others' hands and bluff and stuff. That info can work in your favor, too. Your bid or ask could prompt another trader to intentionally meet you and complete the other side of the sale. Remember when I talked about looking at the L2 when figuring out how much my market order of 1000 shares was likely to cost? Your ask at a couple cents above last trade could prompt a trader to say "OK, I can buy 1000 shares right now and not pay too much" and bang, now you just got your order filled at the price you wanted. quote:SO.. next question, how do you use a stop limit when you are short? My platform tells me I can't on buying, only on selling. In other words, on movement up, but not down. OK, for those reading along: a "stop limit order" is a tool traders use to limit risk on momentum plays on a stock (on the buy side) or to limit risk on a long position (the sell side) by defining a set range in which it should be bought or sold. The stop and limit components set lower and upper bounds of a range, and then you also set a time frame for the order to take place, after which it expires and your instructions are no longer in play. But I've never made short trades, and while it makes sense to me that you should be able to use stop-limits on shorts, it might depend on exactly how your brokerage does them. If they're a thing. Leperflesh fucked around with this message at 19:17 on Apr 14, 2020 |
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Apr 14, 2020 18:59
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Leperflesh posted:OK, for those reading along: a "stop limit order" is a tool traders use to limit risk on momentum plays on a stock (on the buy side) or to limit risk on a long position (the sell side) by defining a set range in which it should be bought or sold. The stop and limit components set lower and upper bounds of a range, and then you also set a time frame for the order to take place, after which it expires and your instructions are no longer in play. The detail of a stop limit versus a limit order is that you have two triggers. This ties in to the strategy of showing or not showing your order to the market at large. The first trigger is the stop, which once reached, activates the limit order. In the example above, I'm expecting this stock to shoot up to $50 and I want to sell then, but I don't want anyone to know I'm expecting that. So I could set a stop at $49.50 and a limit at $50.00. Once the stock makes it to $49.59, the stop triggers my limit sell preset at $50.00, that's the second trigger. Seeing this order wouldn't give away much now that the stock has moved so far, and might even goad a buyer into taking it at that price sooner with my ask sitting there at $50.00. Otherwise, depending on how your platform negotiates transactions, once the bid is around $50.00, your limit order will trigger and fill. The problem seems to be stops only recognize number go up. So if I'm expecting the stock to drop to $30, but want to keep quiet about it, I decide to put a stop limit buy at $30.00. I set my stop at $29.50, but it immediately triggers because the stock is already above that at $43.39 and now my limit buy at $30.00 is visible in level 2 info. This may or may not have any affect on the price of the security itself, depending on volume and capitalization. I need a way to automate this short limit strategy, but haven't found a working method. I have accounts at IB and Questrade. It was IB TWS that was executing the stop immediately on submitting.
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Apr 14, 2020 20:27
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Yup you're well beyond my knowledge or expertise here. Someone in the stock trading thread will probably know.
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Apr 14, 2020 20:36
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mr.belowaverage posted:I need a way to automate this short limit strategy, but haven't found a working method. your people are over here https://forums.somethingawful.com/showthread.php?threadid=3259986
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Apr 14, 2020 20:56
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I have a Roth IRA through USAA that has been sold to Victory Capital. I was trying to find out what, if any, changes there will be, but everything I can find is some article saying how Victory will squeeze out more profits for the shareholder and other puff pieces. I'm also in an L fund and I'm not seeing something like that on Victory's side. Should I be moving my money somewhere else? I'm worried about new fees or something. I don't really have a good handle on how any investment is really managed.
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Apr 15, 2020 17:46
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-Zydeco- posted:I have a Roth IRA through USAA that has been sold to Victory Capital. I was trying to find out what, if any, changes there will be, but everything I can find is some article saying how Victory will squeeze out more profits for the shareholder and other puff pieces. I'm also in an L fund and I'm not seeing something like that on Victory's side. Should I be moving my money somewhere else? I'm worried about new fees or something.
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Apr 15, 2020 17:55
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Question about tax loss harvesting. I just hit a $3,000 balance in my brokerage account on Vanguard. Since that opened up VTSAX for me, I pulled out the $3,000, and I locked in what looks to be a loss of $335. Now the money is moving from a target date retirement fund to VTSAX. The account was opened less than a year ago, so there's no long term capital gains factor coming into play here. I plan on letting this money sit for 7+ years as a future down payment on a house. What does this look like tax-wise? I'm fairly certain I can claim a $335 loss on my 2020 tax return, but I have no gains to offset it this year. Any money I put into my brokerage account moving forward is going into VTSAX as well, so there's not going to be any gains to report for quite some time. Can I carry the loss forward and get a little bitty tax break in 7+ years when I pull it out? If so, how? Is it just filling out a certain part of your tax return the year you withdraw the money? Mostly just trying to understand the mechanics for later on when I might end up in a similar situation with more money on the table.
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Apr 16, 2020 07:40
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acidx posted:Question about tax loss harvesting. I just hit a $3,000 balance in my brokerage account on Vanguard. Since that opened up VTSAX for me, I pulled out the $3,000, and I locked in what looks to be a loss of $335. Now the money is moving from a target date retirement fund to VTSAX. The account was opened less than a year ago, so there's no long term capital gains factor coming into play here. I plan on letting this money sit for 7+ years as a future down payment on a house. What does this look like tax-wise? I'm fairly certain I can claim a $335 loss on my 2020 tax return, but I have no gains to offset it this year. Any money I put into my brokerage account moving forward is going into VTSAX as well, so there's not going to be any gains to report for quite some time. Can I carry the loss forward and get a little bitty tax break in 7+ years when I pull it out? If so, how? Is it just filling out a certain part of your tax return the year you withdraw the money? Mostly just trying to understand the mechanics for later on when I might end up in a similar situation with more money on the table. After offsetting your realized gains (which is none in your case), you can offset ordinary income up to $3k per year. So you get to deduct $335 from your income, which is generally the best use of these losses.
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Apr 16, 2020 08:24
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Am I wrong in thinking this would be a good time to start a Roth Ira if I would be funding it with cash initially, not moving funds from somewhere else?
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Apr 16, 2020 11:02
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The only better time than now would be yesterday.
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Apr 16, 2020 11:17
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Really glad i bought bonds this year for the first time. I already made $60! Getting a nice steak dinner tonight.
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Apr 17, 2020 00:18
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Mu Zeta posted:Really glad i bought bonds this year for the first time. I already made $60! Getting a nice steak dinner tonight. What's the goon recommended fun way to buy a bond?
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Apr 17, 2020 02:55
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Open Vanguard account, push butan on VBTLX.
withak fucked around with this message at 03:48 on Apr 17, 2020 |
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Apr 17, 2020 03:46
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Inner Light posted:What's the goon recommended fun way to buy a bond? I get mine once a month from a broker behind the Wendy's compost bin.
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Apr 17, 2020 05:49
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Inner Light posted:What's the goon recommended fun way to buy a bond? I'd start with Casino Royale
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Apr 17, 2020 06:00
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Foma posted:I'd start with Casino Royale (2006)
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Apr 17, 2020 06:04
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withak posted:Open Vanguard account, push butan on VBTLX. highly disagree. its short-term bond allocation is large enough that total returns from this are significantly depressed. buy BIV and BLV ETFs instead if you want diversified exposure but can take on enough risk to avoid short-term bonds that are essentially cash surrogates.
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Apr 17, 2020 12:46
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withak posted:Open Vanguard account, push butan on VBTLX. 
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Apr 17, 2020 16:43
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Crossquoting from the stocks thread:enraged_camel posted:More on S&P 500 weighing, with charts: Something we should all be aware of. If you are 100% in an S&P500 index fund, then you are almost 20% in five tech companies: google, facebook, apple, amazon, and microsoft. That may be less diversification than you were thinking you had.
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Apr 17, 2020 18:37
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If I do a backdoor Roth conversion for 2019 but I've already filed my taxes, do I have to file an amended return?
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Apr 17, 2020 19:15
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Leperflesh posted:Crossquoting from the stocks thread: I did not realize how much IBM dominated for two decades.
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Apr 17, 2020 19:22
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Leperflesh posted:Something we should all be aware of. If you are 100% in an S&P500 index fund, then you are almost 20% in five tech companies: google, facebook, apple, amazon, and microsoft. That may be less diversification than you were thinking you had. My retirement is 100% in VIIIX right now, and this does give me something to think about. Aside from Facebook though I'm comfortable with the other 4 companies long term. I'm limited in my fund choices in my employer sponsored 401K, so I'm not sure if there's a better place to be really. If anyone cares I've got access to Vanguard target date funds and the following. I turn 40 next year and plan to start directing 10% of my contributions to VBTIX. VMFXX PTTRX VBTIX VWENX ASVDX RGAGX APHMX DODGX FLMVX VEXRX VMCIX VSCIX RERGX skipdogg fucked around with this message at 20:01 on Apr 17, 2020 |
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Apr 17, 2020 19:52
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Well conversely, if one of those companies - Facebook, say - plunges in value for any reason, the mutual fund will also drop shares of the company and replace them with shares from the other 499 companies, because that's how cap-weighted indexes work. So while you're less diversified, it does not mean that overnight 4% of your money could go "poof" just because (say) Facebook did. Of course, overnight 4% of your money could go "poof" because the entire index drops by 4%. But that's understood already by everyone here, presumably.
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Apr 17, 2020 20:23
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Leperflesh posted:Well conversely, if one of those companies - Facebook, say - plunges in value for any reason, the mutual fund will also drop shares of the company and replace them with shares from the other 499 companies, because that's how cap-weighted indexes work. So while you're less diversified, it does not mean that overnight 4% of your money could go "poof" just because (say) Facebook did. If Facebook goes poof and takes 4% of the index's value with it, then yes, 4% of your money going poof is exactly what will happen. The performance of the index is inseparable from the performance of all its components, that's what makes it an index. I'm not changing my strategy because I see no reasonable alternative (although I do hold a total domestic market fund rather than an S&P500 fund so the relative weight of Facebook is a shade lower), but on a gut instinct level I really dislike having Facebook comprise so much of the total value of my investments.
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Apr 17, 2020 21:16
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Kylaer posted:If Facebook goes poof and takes 4% of the index's value with it, then yes, 4% of your money going poof is exactly what will happen. The performance of the index is inseparable from the performance of all its components, that's what makes it an index. Yeah more likely facebook would see a gradual decline in value, and in turn other stocks would see concomitant rises in value, because the investors selling facebook shares would reinvest in something else; and, when companies drop off the S&P, they get replaced by rising companies. But there's various assumptions here, too. I'm more pointing out that, over the very long term, the components of the index are simply those companies that are doing well, and indexes themselves take advantage of survivorship bias.
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Apr 17, 2020 21:25
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KillHour posted:If I do a backdoor Roth conversion for 2019 but I've already filed my taxes, do I have to file an amended return? When did you do the conversion? I think you have to file Form 8606 if you did it in 2019, but if you did the conversion in 2020 for contributions for 2019, you can wait to do so when you file taxes for 2020.
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Apr 17, 2020 23:18
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KillHour posted:If I do a backdoor Roth conversion for 2019 but I've already filed my taxes, do I have to file an amended return? I don't remember which year you have to file the 8606 in, but I do know that if you should have done it you don't need to amend your return. You can just mail the 8606 in separately.
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Apr 18, 2020 02:09
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Ancillary Character posted:When did you do the conversion? I think you have to file Form 8606 if you did it in 2019, but if you did the conversion in 2020 for contributions for 2019, you can wait to do so when you file taxes for 2020. The conversion will be counted in 2020 even if you do that. So you'll have to file 8606 both years (2019 for the contribution, 2020 for the conversion).
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Apr 18, 2020 02:14
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pokeyman posted:(2006) But think about how much more the returns on your Casino Royale Bond would be if you got it in 1967!
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Apr 18, 2020 02:21
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Leperflesh posted:Crossquoting from the stocks thread: I’ve been thinking about this a lot before even getting to the understanding of how concentrated the S&P 500 had become. This video from a Canadian financial adviser that generally argues for index investing makes an interesting argument against the S&P 500 here: https://youtu.be/RR7e1Y-HJxQ In short he argues that: - The 500 is a managed index. - Past performance does not predict future results. - The recent performance of the 500 has been improbably strong, so it’s a particularly bad idea to presume that will continue. (This was recorded before the crash.) - It leaves you out of exposure to small cap stocks (which historically have out performed the 500, though not recently). - Some other ideas.
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Apr 18, 2020 02:31
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Small White Dragon posted:The conversion will be counted in 2020 even if you do that. So you'll have to file 8606 both years (2019 for the contribution, 2020 for the conversion). The contribution and conversion both happened in 2020, but I applied it towards my 2019 contribution limit.
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Apr 18, 2020 02:51
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KillHour posted:The contribution and conversion both happened in 2020, but I applied it towards my 2019 contribution limit. But even if you do a prior-year non-deductible IRA, the conversion takes place in the current tax year. So you'll have two 8606s: 1) For 2019, indicating the non-deductible contribution and 2) For 2020, indicating the conversion to Roth
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Apr 18, 2020 03:16
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Small White Dragon posted:But even if you do a prior-year non-deductible IRA, the conversion takes place in the current tax year. So you'll have two 8606s: So when is the 8606 for the contribution due?
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Apr 18, 2020 03:19
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Leperflesh posted:Well conversely, if one of those companies - Facebook, say - plunges in value for any reason, the mutual fund will also drop shares of the company and replace them with shares from the other 499 companies, because that's how cap-weighted indexes work. So while you're less diversified, it does not mean that overnight 4% of your money could go "poof" just because (say) Facebook did. Unless shares are being issued or bought back, how would the fund’s holdings change on a wighted basis by the stock dropping? If 4% of the index is Facebook and 4% of the funds assets are Facebook, changes in value should track without requiring rebalancing?
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Apr 18, 2020 03:32
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crazypeltast52 posted:Unless shares are being issued or bought back, how would the fund’s holdings change on a wighted basis by the stock dropping? You have to make those adjustments after the change in value has already happened.
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Apr 18, 2020 09:26
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Alchenar posted:You have to make those adjustments after the change in value has already happened. I don't think I'm following here. Let's take a very simple fund of five equal-size companies. We start it with $500, $100 in each company. Each company experiences more or less random performance over ten periods (I've modeled this as a flat distribution between +/- 25%/period). In this sample run, Company 1 winds up wildly successful (more than doubling in value), Companies 2 and 3 experience some bad luck (losing 30% and 40% respectively), while Companies 4 and 5 manage some very minor gains. Company 1 winds up making up nearly 40% of the fund's value... just because it keeps growing, and its future performance will have a very large impact on the fund as a result. The fund manager never has to make any adjustments just to follow the capital weighting unless the bottom performer drops out and gets replaced, or there's something in the charter about no individual stock ever making up more than X% of the whole. 
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Apr 18, 2020 14:29
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Are we getting confused because some funds are cap weighted and some are equal weighted? The S&P 500 is cap weighted so any fund tracking that index shouldn’t have to do any buying or selling unless a stock leaves the index (such as when Macy’s got kicked out of the S&P 500) or a lot of people buy or sell the fund (I’m actually realizing I don’t know who the counterparty is when I buy a mutual fund, ETFs I understand but not mutual funds). If the index being tracked was equal weighted then the fund would need to rebalance but few index funds are.
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Apr 18, 2020 14:56
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