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Stock-Age: Stocks, Options and Dividends oh my!

Nikana said:
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You are buying a contract for 100 shares at a agreed price.

Once you bought the contract, If the price of the shares goes up alot you can use the contract and buy the shares at the price you agreed to.

If the price goes way down you would just let the contract expire.
 
HoodWinked said:
You are buying a contract for 100 shares at a agreed price.

Once you bought the contract, If the price of the shares goes up alot you can use the contract and buy the shares at the price you agreed to.

If the price goes way down you would just let the contract expire.
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Based on that you would want to buy options on stock that has wild swings then?
 
HoodWinked said:
Not necessarily if you bought a call option you are still betting the stock goes up. And a put option that it goes down.
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But for the option to have real value I want to buy it when the stock is low and sell it when the stock is high.
 
Nikana said:
But for the option to have real value I want to buy it when the stock is low and sell it when the stock is high.
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ya for a call option. the benefit of the option is that you wont lose more than what you paid for the contract. if you owned the stock it can theoretically go to zero.
 
HoodWinked said:
ya for a call option. the benefit of the option is that you wont lose more than what you paid for the contract. if you owned the stock it can theoretically go to zero.
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So a call option for lest say MSFT, I dont need to approach it as if I was buying 100 shares since the contract is for 100 shares?
 
Nikana said:
So a call option for lest say MSFT, I dont need to approach it as if I was buying 100 shares since the contract is for 100 shares?
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So an option is 100 shares or 1 contract. When you buy a call option, you are long the market. When you buy a call or put option you pay what is known as a premium.

The two major things that normally affect an option are Volatility (implied and historic volatility) and Time (time value).

Now the VIX is calculated variance from prices of different options with the same time to expiration. So volatility would affect premiums as implied volatility increases, option premiums become more expensive , especially if the underlying asset is highly volatile. As implied volatility decreases, options become less expensive. The VIX increases in a down market and the VIX increases in an up market.

This is why when buying options you should be careful since in volatile markets the underlying assets like a stock example would need to move a larger than the cost of the options for you to profit.

In the case of time value. As the option approaches its expiration date is looses value quickly. So typically most option traders sell their options when they are in the money ( current stock price is above their strike price) before the expiration date.

Or you can execute the option to buy the underlying asset at the strike price you set.

Or you can let the option expire and lose your premium ONLY but that would be dumb if you are in the money
 
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ManofOne said:
So an option is 100 shares or 1 contract. When you buy a call option, you are long the market. When you buy a call or put option you pay what is known as a premium.

The two major things that normally affect an option are Volatility (implied and historic volatility) and Time (time value).

Now the VIX is calculated variance from prices of different options with the same time to expiration. So volatility would affect premiums as implied volatility increases, option premiums become more expensive , especially if the underlying asset is highly volatile. As implied volatility decreases, options become less expensive. The VIX increases in a down market and the VIX increases in an up market.

This is why when buying options you should be careful since in volatile markets the underlying assets like a stock example would need to move a larger than the cost of the options for you to profit.

In the case of time value. As the option approaches its expiration date is looses value quickly. So typically most option traders sell their options when they are in the money ( current stock price is above their strike price) before the expiration date.

Or you can execute the option to buy the underlying asset at the strike price you set.

Or you can let the option expire and lose your premium ONLY but that would be dumb if you are in the money
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This might sound a bit hyperbolic but it seems like this would be something you would want to always approach from a long game perspective even though the asking price of the premium would be significantly higher than a short term one simply because it gives you more time. Thus giving you the option to cash out if things are not going your way and mitigate your losses?
 
Nikana said:
This might sound a bit hyperbolic but it seems like this would be something you would want to always approach from a long game perspective even though the asking price of the premium would be significantly higher than a short term one simply because it gives you more time. Thus giving you the option to cash out if things are not going your way and mitigate your losses?
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Yep. When volatility was lower. I would buy options. I would play the earnings game. Bc historically an earnings beat plus higher guidance would lead to a massive jump in stock price. Now with volatility so high i can't do that.

you would have to play the long game with but you're also paying more for time value
 
ManofOne said:
Yep. When volatility was lower. I would buy options. I would play the earnings game. Bc historically an earnings beat plus higher guidance would lead to a massive jump in stock price. Now with volatility so high i can't do that.

you would have to play the long game with but you're also paying more for time value
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Ok I think I am getting a grasp. The high price of the contract just "feels" crazy off putting like its such a gamble but its more a the more you put it in the less risky it is?
 
Nikana said:
Ok I think I am getting a grasp. The high price of the contract just "feels" crazy off putting like its such a gamble but its more a the more you put it in the less risky it is?
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So think of it this way. If the VIX was around 20, options contract premiums would be less, so the required amount for the stock to move a certain percentage wouldn't be as great as when the VIX is 35., so if you're paying for a stock when volatility is high as well as a year out (time value) then the stock would have to move a tremendous amount for you to gain.

Here's the graph for a call option. Now if volatility increases and/or you pay for for time, that green horizontial line would shift further down and the broken black vertical line would be wider.

cVVRFJS.jpg
 
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ManofOne said:
So think of it this way. If the VIX was around 20, options contract premiums would be less, so the required amount for the stock to move a certain percentage wouldn't be as great as when the VIX is 35., so if you're paying for a stock when volatility is high as well as a year out (time value) then the stock would have to move a tremendous amount for you to gain.

Here's the graph for a call option. Now if volatility increases and/or you pay for for time, that green horizontial line would shift further down and the broken black vertical line would be wider.

cVVRFJS.jpg
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Ah ok. I think that helps. Thanks!
 
Just got off the phone with Fidelity customer service and, oh boy, it sounds like they have been slammed since late last week. The guy told me their account verifications team has been pulling all nighters to process all of the new bank account link requests coming in.
 
Zefah said:
Just got off the phone with Fidelity customer service and, oh boy, it sounds like they have been slammed since late last week. The guy told me their account verifications team has been pulling all nighters to process all of the new bank account link requests coming in.
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I opened an account 10 (calendar) days ago, funded it, and my funds still aren't settled as of today.
 
So about a trailing stock order sell of a stock. What's the down side of doing it? Example.......

Lets say I bought 100 shares of company called Moon at $5 a share ($500 total). Now lets say my research led me to set an exit price for the stock at $8 a share.......but I never placed "limit order". 1 week later it's sitting at $8.50 a share and rising........I know I could place a Stop Order if the stock hit $8 to auto sell my shares and I get 60% profit ($300). But how do Trailing Stop Orders work? Lets say I place the trailing stop order for that particular day at 5%, (which would be $8.08 a share), how does my order know what the high would be for that day?

Do all Trailing Stop orders execute at market close?
 
Zefah said:
Just got off the phone with Fidelity customer service and, oh boy, it sounds like they have been slammed since late last week. The guy told me their account verifications team has been pulling all nighters to process all of the new bank account link requests coming in.
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It's 2021, why exactly would something like that take so long? Or are there really just that many new accounts?
 
mango drank said:
I opened an account 10 (calendar) days ago, funded it, and my funds still aren't settled as of today.
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With covid, I think just about every financial institution is getting slammed.

On Jan 5, I called my bank so I could pay off my car loan in full. I told them the money is there, you can take the $20,000.

He said they are bogged down and will take a week. The funds weren't taken out of my account until Jan 22!
 
ManofOne said:
So an option is 100 shares or 1 contract. When you buy a call option, you are long the market. When you buy a call or put option you pay what is known as a premium.

The two major things that normally affect an option are Volatility (implied and historic volatility) and Time (time value).

Now the VIX is calculated variance from prices of different options with the same time to expiration. So volatility would affect premiums as implied volatility increases, option premiums become more expensive , especially if the underlying asset is highly volatile. As implied volatility decreases, options become less expensive. The VIX increases in a down market and the VIX increases in an up market.

This is why when buying options you should be careful since in volatile markets the underlying assets like a stock example would need to move a larger than the cost of the options for you to profit.

In the case of time value. As the option approaches its expiration date is looses value quickly. So typically most option traders sell their options when they are in the money ( current stock price is above their strike price) before the expiration date.

Or you can execute the option to buy the underlying asset at the strike price you set.

Or you can let the option expire and lose your premium ONLY but that would be dumb if you are in the money
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Great description
 
mckmas8808 said:
So about a trailing stock order sell of a stock. What's the down side of doing it? Example.......

Lets say I bought 100 shares of company called Moon at $5 a share ($500 total). Now lets say my research led me to set an exit price for the stock at $8 a share.......but I never placed "limit order". 1 week later it's sitting at $8.50 a share and rising........I know I could place a Stop Order if the stock hit $8 to auto sell my shares and I get 60% profit ($300). But how do Trailing Stop Orders work? Lets say I place the trailing stop order for that particular day at 5%, (which would be $8.08 a share), how does my order know what the high would be for that day?

Do all Trailing Stop orders execute at market close?
Click to expand...

You would have to set a stop price and limit price. I not sure which platform you are using.

Stop orders order should be set at an area well below the current market price so that it doesn't trigger in cases of high volatility. If you want to ride the momentum, set the limit order high enough so it wouldn't trigger as well in cases of high volatility.

Also as for whether it triggers after market, I'm not sure. Platforms typically don't allow that.
 
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I think I have gone into overload with this whole thing and need to take a day off lol. I am like crazy stressed out today after reading and trying to understand everything going on while also trying to actually invest in some long term things.

Idk how people would do this every day.
 
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ManofOne said:
You would have to set a stop price and limit price. I not sure which platform you are using.

Stop orders order should be set at an area well below the current market price so that it doesn't trigger in cases of high volatility. If you want to ride the momentum, set the limit order high enough so it wouldn't trigger as well in cases of high volatility.

Also as for whether it triggers after market, I'm not sure. Platforms typically don't allow that.
Click to expand...

I'm on RobinHood. I'm not sure if I can set up both of those (stop price and trailing limit price at the same time).
 
Nikana said:
I think I have gone into overload with this whole thing and need to take a day off lol. I am like crazy stressed out today after reading and trying to understand everything going on while also trying to actually invest in some long term things.

Idk how people would do this every day.
Click to expand...

LOL!!! I felt like this a couple days ago. It's ALOT! I set up my plays for the week (with certain triggers to either buy or sell) and now I'm just watching the scoreboard. After I learn how to use trailing stop orders, I'll be set.
 
mckmas8808 said:
I'm on RobinHood. I'm not sure if I can set up both of those (stop price and trailing limit price at the same time).
Click to expand...

When you press sell a stock what do you see. I've never used RH so I not sure. But typically when you press sell you should see a drop down menu with the list of order types like LIMIT, STOP LOSS, STOP ORDER, MARKET ETC.
 

Morgan Stanley's math on Tesla teases out $3,000 per share

I valued it at $1,200 but damn $3000

  • Morgan Stanley boosts its base price target on Tesla (NASDAQ:TSLA) to $880 from $810
  • Analyst Adam Jonas says about $14 of the price target boost is from core auto and $32 per share is from Tesla Energy on a higher CAR for the stationary storage system.
  • Tesla is a core EV holding at Morgan Stanley and rated at Overweight.
  • It would not be like Morgan Stanley to not also offer up a pie in the sky scenario.
  • "Our auto unit volume forecasts imply a 27% CAGR through 2030. Holding all else equal, if we were to run a scenario of a 50% CAGR through 2030, our hybrid-DCF valuation model would rise in excess of $3,000/share for Tesla. To be clear, we are not prepared to treat such a scenario even within the scope of our bull case at this time and believe there is much for investors to explore in many of the non-unit-based-auto business lines such as: insurance, energy, 3rd battery supply, autonomy and network services revenue," throws out Jonas.
  • That could up the ante for Ark Invest's Cathie Wood, who has issued some lush far-looking price targets on Tesla in the past.
 
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ManofOne said:

Morgan Stanley's math on Tesla teases out $3,000 per share

I valued it at $1,200 but damn $3000

  • Morgan Stanley boosts its base price target on Tesla (NASDAQ:TSLA) to $880 from $810
  • Analyst Adam Jonas says about $14 of the price target boost is from core auto and $32 per share is from Tesla Energy on a higher CAR for the stationary storage system.
  • Tesla is a core EV holding at Morgan Stanley and rated at Overweight.
  • It would not be like Morgan Stanley to not also offer up a pie in the sky scenario.
  • "Our auto unit volume forecasts imply a 27% CAGR through 2030. Holding all else equal, if we were to run a scenario of a 50% CAGR through 2030, our hybrid-DCF valuation model would rise in excess of $3,000/share for Tesla. To be clear, we are not prepared to treat such a scenario even within the scope of our bull case at this time and believe there is much for investors to explore in many of the non-unit-based-auto business lines such as: insurance, energy, 3rd battery supply, autonomy and network services revenue," throws out Jonas.
  • That could up the ante for Ark Invest's Cathie Wood, who has issued some lush far-looking price targets on Tesla in the past.
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So we should get in on tesla?
 
Nikana said:
So we should get in on tesla?
Click to expand...

Its profitablity hinges on credit sales so I would ride the train. I have TSLA in my portfolio for years now. Its been a good stock winner but as always do your research and see if it something you might be interested in.

I'm more interest in MS hybrid DCF model
 
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ManofOne said:
When you press sell a stock what do you see. I've never used RH so I not sure. But typically when you press sell you should see a drop down menu with the list of order types like LIMIT, STOP LOSS, STOP ORDER, MARKET ETC.
Click to expand...

Limit Order, Stop Order, Stop Limit Order, Trailing Stop Order

ManofOne said:

Morgan Stanley's math on Tesla teases out $3,000 per share

I valued it at $1,200 but damn $3000

  • Morgan Stanley boosts its base price target on Tesla (NASDAQ:TSLA) to $880 from $810
  • Analyst Adam Jonas says about $14 of the price target boost is from core auto and $32 per share is from Tesla Energy on a higher CAR for the stationary storage system.
  • Tesla is a core EV holding at Morgan Stanley and rated at Overweight.
  • It would not be like Morgan Stanley to not also offer up a pie in the sky scenario.
  • "Our auto unit volume forecasts imply a 27% CAGR through 2030. Holding all else equal, if we were to run a scenario of a 50% CAGR through 2030, our hybrid-DCF valuation model would rise in excess of $3,000/share for Tesla. To be clear, we are not prepared to treat such a scenario even within the scope of our bull case at this time and believe there is much for investors to explore in many of the non-unit-based-auto business lines such as: insurance, energy, 3rd battery supply, autonomy and network services revenue," throws out Jonas.
  • That could up the ante for Ark Invest's Cathie Wood, who has issued some lush far-looking price targets on Tesla in the past.
Click to expand...

What is their time frame for this analysis? And what was yours (for the $1,200 valuation?
 
mckmas8808 said:
Limit Order, Stop Order, Stop Limit Order, Trailing Stop Order



What is their time frame for this analysis? And what was yours (for the $1,200 valuation?
Click to expand...

Choose the Stop Limit Order option and see what comes up

So for my valuation I use variety of methods and then apply a weighted average to each one.

So normally how it works is that for DCF, you would choose a growth rate based on the reinvestment rate and ROE, calculate the Free Cashflow (sometimes they use NOPAT) and a discount rate, WACC,

So my first model projected a fairly high growth rate based on multiple scenarios with the most optimal one being a continuation of the sales credit, a growth rate in domestic and international markets and added revenue streams from possible subscription based business. That would give you a price of $2,300.

The multi factor models we have to use at work (regression models) - gave us a price of $1,100 in the near term

Adjusted multiples (those adjusted for growth) at that time gave us a price of around $800 - $900, again for the near term.
 
I've been lurking in WSB for over a year, and in case anyone didn't know, many of their posts used to be screenshots of how much money they lost. They made good bets, but then often don't pull out fast enough.

I'm still holding some myself, but I did pull out most of it with a nice profit. Still eager to see what happens with this hold strategy.
 
0oUzZ4o.jpg


The correlation between MEME stocks like GME and the overall market seems to high and negative. So if markets going up, meme stocks going down. Let's see if that theory continues.
 
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ManofOne said:
I hope you guys don't loose to much. If ya'll need help rebuilding let us know.
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I will definitely take you up in that.

For the moment just trying to decide if I should sell in 12 mins when E*TRADE allows me with an extended hours order, or wait for the market to open at 9:30
 
haxan7 said:
I will definitely take you up in that.

For the moment just trying to decide if I should sell in 12 mins when E*TRADE allows me with an extended hours order, or wait for the market to open at 9:30
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Ya, the bid ask in extended is huge. Maybe the market will dip at open and do another eventual rise. As I said, there is a high and negative correlation between GME and the market so maybe use that opportunity if it does happen.
 
ManofOne said:
"Our auto unit volume forecasts imply a 27% CAGR through 2030. Holding all else equal, if we were to run a scenario of a 50% CAGR through 2030, our hybrid-DCF valuation model would rise in excess of $3,000/share for Tesla. To be clear, we are not prepared to treat such a scenario even within the scope of our bull case at this time and believe there is much for investors to explore in many of the non-unit-based-auto business lines such as: insurance, energy, 3rd battery supply, autonomy and network services revenue," throws out Jonas.
Click to expand...

If it is indeed 3000 in 9 years. that's almost quadrupling in 9 years. Its good, but not out of the ordinary.
 
OSC said:
If it is indeed 3000 in 9 years. that's almost quadrupling in 9 years. Its good, but not out of the ordinary.
Click to expand...

That's assuming optimal conditions so an extension of their sales credit, larger market share globally (right now in europe VW is catching up big-time), additional revenue streams from added services.

I think if they launch added services and do things like BaaS etc, they're gonna surpass that trillion dollar mark faster than expected.
 
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