Jump to content

~* The official thread of stonks, tendies, safe, sound and very real professional financial advice *~


Recommended Posts

6 minutes ago, Jason said:

 

So to be extra clear. In your example $95 is the price the other person is paying me for the contract, $600 is for the shares since that's the target price being set in the contract, but if it never hits I still get the $695 (less whatever fees my brokerage charges me for setting up the contract) while keeping my shares? 

 

no the $695 is just for the contract, you would still be paid an additional $60x100 for the shares if they sold. You get the $695 no matter what as long as someone buys the contract.

Link to comment
Share on other sites

16 minutes ago, Jason said:

And...what exactly is the risk? That I pay the fees to my brokerage to set up the contract and then nobody buys the contract? Or do you not get charged the fees until someone actually buys the contract? 

 

risk is that stock goes parabolic and you are forced to sell at $60 even though it might rocket emoji all the way to the moon so you miss out on potential gains. The person buying the contract is hoping for that rocket, they are paying $695 to lock in a buy price of $60 for 100 shares, so if it shoots way up they are paying under market cost potentially by a lot.

 

AMC is a bit of an extreme example right now because the premium for the contract is so high compared to its share price. If you look at MSFT which has a much higher share price the price you would get on a similar percentage up contract as the AMC example would only be $5

Link to comment
Share on other sites

1 minute ago, elbobo said:

risk is that stock goes parabolic and you are forced to sell at $60 even though it might rocket emoji all the way to the moon so you miss out on potential gains. The person buying the contract is hoping for that rocket, they are paying $695 to lock in a buy price of $60 for 100 shares, so if it shoots way up they are paying under market cost potentially by a lot.

 

I see. So no brokerage fees for setting up the contract until someone actually buys the contract?

Link to comment
Share on other sites

On 6/16/2021 at 1:15 PM, elbobo said:

 

covered calls are when you own a stock, lets say AMC, you can write a contract on that to sell the shares at a strike price that you set. It is trading at 52.xx right now, lets say you bought it at $20 and completely satisficed selling your shares at $60 and exiting your position. Contracts are sold in 100 share blocks so you need at least 100 shares in the underlining stock to do this.

 

So you write a contract to sell 100 shares at $60 by a certain expiration date, lets say 6-25-21. Someone can buy this contract for right now $695(the price of varies depending on share price, volatility and how far away the strike is from the current price), you get paid that $695 minus fees as soon as they buy the contract.

 

If the share price goes up to $60 they can execute the contract and your shares will be automatically sold at $60 per share and assigned to the contract purchaser. If the share price does not go up and the contract holder does not execute you still keep the $695 and your shares. 

 

Because of AMC's extreme volatility you can get excellent premiums on selling the contracts right now, a $100/share contract which is WAY out of the money is even paying $250/contract

 

all that being said you NEED to do serious education before you start messing with options 

 

After learning what the hell a short was, I could only think the game is rigged.

 

Now you tell me about options and the game is just fucking absurd.

 

Wealth is a con.

Link to comment
Share on other sites

On 6/16/2021 at 10:39 AM, elbobo said:

 

risk is that stock goes parabolic and you are forced to sell at $60 even though it might rocket emoji all the way to the moon so you miss out on potential gains. The person buying the contract is hoping for that rocket, they are paying $695 to lock in a buy price of $60 for 100 shares, so if it shoots way up they are paying under market cost potentially by a lot.

 

AMC is a bit of an extreme example right now because the premium for the contract is so high compared to its share price. If you look at MSFT which has a much higher share price the price you would get on a similar percentage up contract as the AMC example would only be $5

Unless you are selling covered calls/shorts you are picking up nickels in front of a bulldozer. The amount you can lose is unlimited otherwise.

Link to comment
Share on other sites

1 hour ago, cusideabelincoln said:

 

After learning what the hell a short was, I could only think the game is rigged.

 

Now you tell me about options and the game is just fucking absurd.

 

Wealth is a con.

 

A wise man from Reddit once told me "options will make your dick fly off."

  • Haha 1
Link to comment
Share on other sites

13 hours ago, Air_Delivery said:

Unless you are selling covered calls/shorts you are picking up nickels in front of a bulldozer. The amount you can lose is unlimited otherwise.

 

I was referring to covered calls only, only selling calls where you own enough of the underlying stock. 

 

there are absolutely other options were you can lose more than everything 

Link to comment
Share on other sites

9 hours ago, elbobo said:

 

I was referring to covered calls only, only selling calls where you own enough of the underlying stock. 

 

there are absolutely other options were you can lose more than everything 

 

I'm trying to set up a covered call using HPIL or HCMC and Schwab since I figured I'd get my feet wet with something not worth much and the Schwab site is saying "Error Message There are no options for the given underlying symbol." Is this a Schwab restriction on what they'll set up options for, or are there just stocks where you simply can't do options trading with them?

Link to comment
Share on other sites

15 hours ago, Jason said:

 

I'm trying to set up a covered call using HPIL or HCMC and Schwab since I figured I'd get my feet wet with something not worth much and the Schwab site is saying "Error Message There are no options for the given underlying symbol." Is this a Schwab restriction on what they'll set up options for, or are there just stocks where you simply can't do options trading with them?

 

 

looks like there are no options on those, I don't think there are options on OTC stocks

 

yahoo_default_logo.png
FINANCE.YAHOO.COM

View the basic HCMC option chain and compare options of HEALTHIER CHOICES MANAGEMENT CO on Yahoo Finance.

 

yahoo_default_logo.png
FINANCE.YAHOO.COM

View the basic HPIL option chain and compare options of HPIL HLDG on Yahoo Finance.

 

 

 

  • Thanks 1
Link to comment
Share on other sites

On 6/19/2021 at 5:49 AM, elbobo said:

 

 

looks like there are no options on those, I don't think there are options on OTC stocks

 

yahoo_default_logo.png
FINANCE.YAHOO.COM

View the basic HCMC option chain and compare options of HEALTHIER CHOICES MANAGEMENT CO on Yahoo Finance.

 

yahoo_default_logo.png
FINANCE.YAHOO.COM

View the basic HPIL option chain and compare options of HPIL HLDG on Yahoo Finance.

 

 

 

 

Okay, so I don't have enough AMC to do a covered call with it but just looking at it as an example in the order setup screen.

 

image.png

image.png

 

I've figured out that I want do a sell to open for a covered call. I'm guessing the dates on the left of the of the second screenshot are my choices for when the contract should expire. I thought I understood what the strike price is from reading up covered calls, but now I'm confused about why there's the ability to set a separate limit price. Is it like a stop-limit with the strike price being the stop price...so for example you could set strike price of $75 per share, with a limit of $100 per share (the stock hitting $75 a share triggers giving you the right to buy the shares from me at $100 a share)? By why wouldn't you just do it as a market order with a strike price of $100? I'm also not clear on where it's showing me how much I'd make on the contract itself.

Link to comment
Share on other sites

3 hours ago, Jason said:

 

Okay, so I don't have enough AMC to do a covered call with it but just looking at it as an example in the order setup screen.

 

image.png

image.png

 

I've figured out that I want do a sell to open for a covered call. I'm guessing the dates on the left of the of the second screenshot are my choices for when the contract should expire. I thought I understood what the strike price is from reading up covered calls, but now I'm confused about why there's the ability to set a separate limit price. Is it like a stop-limit with the strike price being the stop price...so for example you could set strike price of $75 per share, with a limit of $100 per share (the stock hitting $75 a share triggers giving you the right to buy the shares from me at $100 a share)? By why wouldn't you just do it as a market order with a strike price of $100? I'm also not clear on where it's showing me how much I'd make on the contract itself.

 

you are correct on the dates. I am not sure about the limit. I do not think there is way to separate out shares into groups of less than 100 per transaction, so whatever you select as the strike is what price the shares can be assigned at for all 100.

Link to comment
Share on other sites

After 4 months of day/week trading, my account is up +$3,300 or +42.23%, if I were to sell out right now.

 

After a little over a month of ETF investing, that account is flat.  Mostly negative until today, where I'm up a whopping $10 or 0.28%

 

I think I might be better off "gambling" by day trading than letting my money sit in ETFs.

Link to comment
Share on other sites

7 minutes ago, cusideabelincoln said:

After 4 months of day/week trading, my account is up +$3,300 or +42.23%, if I were to sell out right now.

 

After a little over a month of ETF investing, that account is flat.  Mostly negative until today, where I'm up a whopping $10 or 0.28%

 

I think I might be better off "gambling" by day trading than letting my money sit in ETFs.

 

Just know that it is exactly that, gambling. Could easily be down 40% if trades go against you. ETFs just track the market, which historically will still provide better returns than a savings account or CD.

Link to comment
Share on other sites

9 minutes ago, cusideabelincoln said:

After 4 months of day/week trading, my account is up +$3,300 or +42.23%, if I were to sell out right now.

 

After a little over a month of ETF investing, that account is flat.  Mostly negative until today, where I'm up a whopping $10 or 0.28%

 

I think I might be better off "gambling" by day trading than letting my money sit in ETFs.

 

This is the train of thought all day traders have before they get washed.

Link to comment
Share on other sites

19 hours ago, cusideabelincoln said:

After 4 months of day/week trading, my account is up +$3,300 or +42.23%, if I were to sell out right now.

 

After a little over a month of ETF investing, that account is flat.  Mostly negative until today, where I'm up a whopping $10 or 0.28%

 

I think I might be better off "gambling" by day trading than letting my money sit in ETFs.

ETF investing, done correctly, is generally about long-term wealth expansion and preservation, and utilizing the phenomenon of compound interest to significantly augment your savings over a very long time horizon.  It is a slow, gradual process and thus does not provide the dopamine rush of making a killing overnight by buying/selling [insert hottest individual stocks].  Its big advantage is that it is low-risk and relies very little on luck, but also nets higher returns than dropping everything into fixed income. (although it makes sense to have part of your portfolio in fixed income)

 

I'm talking in particular about ETFs that hold a portfolio of securities designed to essentially 'sample' the entire market.  Because while individual companies can and often do go under or decline in value over the long-term, the stock market as a whole has never failed to grow over time--even after getting curb-stomped by a Great Depression or two.

 

A month is not a good time horizon in which to evaluate the performance of a market-sampling ETF.  And while it's certainly possible you may get rich off of individual stocks, it's always worthwhile to remember that for every Warren Buffet there are 10,000 traders who have lost it all betting on individual companies.

 

(If your comment was meant to be sarcastic, please disregard the last three paragraphs and well done sir)

Link to comment
Share on other sites

6 minutes ago, Signifyin(g)Monkey said:

ETF investing, done correctly, is generally about long-term wealth expansion and preservation, and utilizing the phenomenon of compound interest to significantly augment your savings over a very long time horizon.  It is a slow, gradual process and thus does not provide the dopamine rush of making a killing overnight by buying/selling [insert hottest individual stocks].  Its big advantage is that it is low-risk and relies very little on luck, but also nets higher returns than dropping everything into fixed income. (although it makes sense to have part of your portfolio in fixed income)

 

I'm talking in particular about ETFs that hold a portfolio of securities designed to essentially 'sample' the entire market.  Because while individual companies can and often do go under or decline in value over the long-term, the stock market as a whole has never failed to grow over time--even after getting curb-stomped by a Great Depression or two.

 

A month is not a good time horizon in which to evaluate the performance of a market-sampling ETF.  And while it's certainly possible you may get rich off of individual stocks, it's always worthwhile to remember that for every Warren Buffet there are 10,000 traders who have lost it all betting on individual companies.

 

(If your comment was meant to be sarcastic, please disregard the last three paragraphs and well done sir)

 

Yeah, long-term ETF/index investing is about tracking over 5-10+ years.

Link to comment
Share on other sites

5 hours ago, Signifyin(g)Monkey said:

ETF investing, done correctly, is generally about long-term wealth expansion and preservation, and utilizing the phenomenon of compound interest to significantly augment your savings over a very long time horizon.  It is a slow, gradual process and thus does not provide the dopamine rush of making a killing overnight by buying/selling [insert hottest individual stocks].  Its big advantage is that it is low-risk and relies very little on luck, but also nets higher returns than dropping everything into fixed income. (although it makes sense to have part of your portfolio in fixed income)

 

I'm talking in particular about ETFs that hold a portfolio of securities designed to essentially 'sample' the entire market.  Because while individual companies can and often do go under or decline in value over the long-term, the stock market as a whole has never failed to grow over time--even after getting curb-stomped by a Great Depression or two.

 

A month is not a good time horizon in which to evaluate the performance of a market-sampling ETF.  And while it's certainly possible you may get rich off of individual stocks, it's always worthwhile to remember that for every Warren Buffet there are 10,000 traders who have lost it all betting on individual companies.

 

(If your comment was meant to be sarcastic, please disregard the last three paragraphs and well done sir)

 

It was a bit of a joke.  Mainly I bought into ETFs at a high point, then they recently went on a small decline, and will no doubt start climbing from here on out. Judging from their past performances, they all take a small dip before growing a little, and I just had bad timing.

Link to comment
Share on other sites

  • 2 weeks later...
7 minutes ago, elbobo said:

what in the absolute fuck at newegg(NEGG)

 

Mother of god. $10 5 days ago. 

 

This one at least has a discernible reason. 

 

vYnMRxu5GiPVUSA9oDkpNL-1200-80.jpg
WWW.TOMSHARDWARE.COM

The service will be the only way to buy “hot items.”

 

Link to comment
Share on other sites

Sold my remaining AMC for $150 profit this morning. Could have had around $100 more if I'd sold earlier but I was yoloing since it was staying kind of high for so long even after it slid off the peak. But it closed $4 below where I sold and ended after hours $5 lower than where I sold. 

Link to comment
Share on other sites

I wish Schwab would let you hide specific stocks from your day change sum. I don't really care what my TSLA is doing day to day since it's so volatile, and it just makes it harder to get an at-a-glance view about how the rest of my stocks did that day.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...