I'm going to take $1,405.35 and turn it into $100,000 using stock options.

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Black1ce said:
I see. I too thought that $1,400 or even $10,000 is low to hold a comfortable position. in my opinion, with starting that low, you pretty much have to be very aggressive to quickly maximize your return.

What are your thoughts on penny stocks?
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Depends on who we're talking about. Penny stocks aren't for dreamers, but people who know what they are and how to trade them can make good money (and lose good money).

Funny because this thread reminds me of a thread I used to be a part of on a bodybuilding website that was literally titled "I just invested in a penny stock and Im going to be rich" or something like that...

At first it was about the guy, who's results didn't turn out so great and he didn't know when to sell, but eventually it became it's own hangout for people to learn about penny stocks and investing in general, it was over 150 pages long and is still going to this day...I wouldn't mind this thread turning into that, whether I do good or fail...lots of good information already being tossed around here by people a lot more experienced and a lot better than I am.
 
I have no idea why I have a TPX ticker open as if I'm expecting it to plummet to 0 or something..
 
Berkoff said:
Okay, completely clueless here. Do you have to give any of this profit away as tax? I know forex trading is tax-free but is this different?
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Whatever the percentage is on the tax bracket, yeah.

DoctorWho said:
I want to know more...
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I was paper trading with OptionsHouse for months before I used my own money which is what I suggest everyone does (use OptionsHouse, seriously). Learning the basics is important, and it never hurts to know more advanced strategies (read books on the matter, e.g. Options Volatility & Pricing). But getting your feet wet should be your priority. You'll never know what works for you until you get into it.

SPY and QQQ are two of the most traded ETFs which is why I use them. Because the options I trade are very volatile, whenever I trade, I pay attention to the market throughout the entire day. I can do that because I don't have a "real" job. I try to identify trends then ride them. I rode two trends this week. One that made me a 500% return after a day. The other about 250% after 5 hours. I never stick to a position for much longer than a day, and I never spend more than $10,000 on any position.

Given enough experience, it's not terribly hard to notice these trends. But you need that experience first.
 
jgmo870 said:
Whatever the percentage is on the tax bracket, yeah.



I was paper trading with OptionsHouse for months before I used my own money which is what I suggest everyone does (use OptionsHouse, seriously). Learning the basics is important, and it never hurts to know more advanced strategies (read books on the matter, e.g. Options Volatility & Pricing). But getting your feet wet should be your priority. You'll never know what works for you until you get into it.

SPY and QQQ are two of the most traded ETFs which is why I use them. Because the options I trade are very volatile, whenever I trade, I pay attention to the market throughout the entire day. I can do that because I don't have a "real" job. I try to identify trends then ride them. I rode two trends this week. One that made me a 500% return after a day. The other about 250% after 5 hours. I never stick to a position for much longer than a day, and I never spend more than $10,000 on any position.

Given enough experience, it's not terribly hard to notice these trends. But you need that experience first.
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What platform are you on now?
Edit, nevermind misread your post.
 
jgmo870 said:
Whatever the percentage is on the tax bracket, yeah.



I was paper trading with OptionsHouse for months before I used my own money which is what I suggest everyone does (use OptionsHouse, seriously). Learning the basics is important, and it never hurts to know more advanced strategies (read books on the matter, e.g. Options Volatility & Pricing). But getting your feet wet should be your priority. You'll never know what works for you until you get into it.

SPY and QQQ are two of the most traded ETFs which is why I use them. Because the options I trade are very volatile, whenever I trade, I pay attention to the market throughout the entire day. I can do that because I don't have a "real" job. I try to identify trends then ride them. I rode two trends this week. One that made me a 500% return after a day. The other about 250% after 5 hours. I never stick to a position for much longer than a day, and I never spend more than $10,000 on any position.

Given enough experience, it's not terribly hard to notice these trends. But you need that experience first.
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Thanks for the information. I'm going to give OptionsHouse a shot.
 
Traded NKE, WAG, scalped goog and then RIMM this morning. Made money in all of it, but not a lot, and not too many great things to trade today.
 
http://www.tdcanadatrust.com/planning/investing-basics/investment-options/options/mkop.jsp

A Glossary of Terms:

Basic Option Terminology
Options are contracts that derive their value from underlying interests like stocks and bonds.

Calls give holders the right to buy underlying interests.

Puts give holders the right to sell underlying interests.

Underlying interest is the security on which the option is written.

When an option contract is first created, it is termed an Opening Transaction.

A Closing Transaction is the term used when an option contract is eliminated through a secondary transaction.

Strike (Exercise) Price is the price at which the underlying interest can be bought or sold.

When you buy an option, as an opening transaction, you are the Buyer or Holder. Holders have the right to buy the underlying interest at the strike price (with a Call), or sell the underlying interest at the strike price (with a Put).

When you sell an option, as an opening transaction, you are the Seller or Writer. Writers are obligated to buy the underlying interest at the strike price (with a Put) or sell the underlying interest at the strike price (with a Call) if the contract is exercised.

Premium is the price the buyer pays to the seller for the option contract.

Expiry Date is the date on which the contract ceases to exist.

Exercise Style is either European (can only be exercised on the expiry date), or American (can be exercised on any trading day prior to the expiry date).

Options are At-the Money when the market price of the underlying interest is equal to its strike price.

Options are In-the-Money when the price of the underlying interest is above the Call's strike price, or below the Put's strike price.

Options are Out-of-the-Money when the price of the underlying interest is below the Call's strike price, or above the Put's strike price.

The Multiplier is the term given to the number of units of the underly
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This helps a bit when reading some of the posts around here.
 
Could someone recommend a few books to learn about options? I've heard that Lowell's Get Rich with Options is great. I don't know anything about the stock market, so I don't have any basic knowledge either. What basic knowledge should I have to learn about options?

Also, how do you know what the risk is of certain options you invest in, how much you invest, etc?
 
Prez said:
Could someone recommend a few books to learn about options? I've heard that Lowell's Get Rich with Options is great. I don't know anything about the stock market, so I don't have any basic knowledge either. What basic knowledge should I have to learn about options?

Also, how do you know what the risk is of certain options you invest in, how much you invest, etc?
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Shelly Natenbergs Option Pricing and Volatility pretty much the bible of options books.
Edit:autocorrect.
 
JonStark said:
Balance now ?
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Let's see if I get this right...

His initial stake was 700 x .85 = $595

He sold for 700 * 1.5 = $1050

$1050 - 595 = $455 profit on this trade, not including any fees.

Total balance = 1050 + Whatever he had left after the GOOG mauling and the 595 here.
 
Prez said:
Could someone recommend a few books to learn about options? I've heard that Lowell's Get Rich with Options is great. I don't know anything about the stock market, so I don't have any basic knowledge either. What basic knowledge should I have to learn about options?

Also, how do you know what the risk is of certain options you invest in, how much you invest, etc?
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I'm currently using this textbook for my Options & Futures class : http://www.amazon.ca/dp/0136103227/
 
Prez said:
Thanks. Does the book teach the basic knowledge of the stock market necessary to learn about options or should I get another book for that?
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It'll teach how the stock market directly affects trading options, yes. It's a good introductory and can also get complex. The book is usually expensive unfortunately. If you do not have a basic understanding of the stock market I would pick up something else.
 
ggnoobIGN said:
It'll teach how the stock market directly affects trading options, yes. It's a good introductory and can also get complex. The book is usually expensive unfortunately. If you do not have a basic understanding of the stock market I would pick up something else.
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No, I don't have a basic understanding of the stock market. Any suggestions?
 
helloresolven said:
Expensive? The book costs $35 on Amazon right now.
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Yeah, it's only £20 on Amazon UK. For a new hardcover that is very cheap actually.

Still, I need to learn the basics of the stock market first. Could I read any book book for that, then move on to Option Pricing and Volatility?
 
Prez said:
Yeah, it's only £20 on Amazon UK. For a new hardcover that is very cheap actually.

Still, I need to learn the basics of the stock market first. Could I read any book book for that, then move on to Option Pricing and Volatility?
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There's a ton of them out there. I honestly wouldn't know what to reccomend. I'm sure you'll be fine with whatever if you're just starting out.
 
Bought 40 FB $23 calls @ .25 that expire Oct 5th, betting on breaking $22ish resistance by later today, good momo here
 
ggnoobIGN said:
I thought it was around $60, which I thought is expensive. I don't really know though about book prices.
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Yeah, looks like it's on sale right now at Amazon. So I just picked up with my $30 in Amazon credit.

Prez said:
Still, I need to learn the basics of the stock market first. Could I read any book book for that, then move on to Option Pricing and Volatility?
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As for a book on stock market, your best bet is just going on Amazon and searching for a book. Look at one with recent decent reviews. Perhaps something like this one, an Introduction to Financial Instruments?

Hell, you might just want to google around. I'm sure there are plenty of college courses offering PDFs/presentations for easy download.

Also, check out https://www.coursera.org/category/economics. Doesn't look like they have anything now, but perhaps they'll have a course on the stock market eventually. (Though, they have https://www.coursera.org/course/introfinance coming soon).
 
Well good luck. I got lucky back in 08/09. I had about 15 shares of apple at the time that I sold at $180 or so. I then I bought 1000 shares of Ford when it was at 1.20 or something like that. I sold that at 9, and i had another 1000 of sirius stock that i got for 5 cents and sold at $2. Ah those were the days.

I was just looking back and i also had 500 shares of C that i bought at 1.45 and i sold at $4 or something like that :(
 
MVP - What happens to an option when a stock splits?

EG - If I buy options to put 5000 shares of apple at $680/share, and the stock splits down to 290/share... do I go buy a yacht?
 
Darias said:
MVP - What happens to an option when a stock splits?

EG - If I buy options to put 5000 shares of apple at $680/share, and the stock splits down to 290/share... do I go buy a yacht?
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Stock splits don't make you richer. All you're doing is slicing the shares into smaller pieces (or larger pieces if it's a reverse split).
 
Ok, so the option follows the stock real value.

I was picturing an option of 100 shares $500 a share, and then if the stock split, the shares suddenly costing ~250, where you still hold an option for 100 @ 500.
 
I don't understand what makes a person say "hmm I should buy this stock" over another stock. Or how to tell if something is about to be on the up swing or down swing.
 
depths20XX said:
I don't understand what makes a person say "hmm I should buy this stock" over another stock. Or how to tell if something is about to be on the up swing or down swing.
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By looking at the underlying fundamentals of the company or by doing a technical analysis of the stock.
 
Snookie said:
Well good luck. I got lucky back in 08/09. I had about 15 shares of apple at the time that I sold at $180 or so. I then I bought 1000 shares of Ford when it was at 1.20 or something like that. I sold that at 9, and i had another 1000 of sirius stock that i got for 5 cents and sold at $2. Ah those were the days.

I was just looking back and i also had 500 shares of C that i bought at 1.45 and i sold at $4 or something like that :(
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Ugh I remember those days...I bought F for $1, sold soon after...didn't jump on SIRI, but I remember seeing it at .07 and didn't pull the trigger, scared of supposed bankruptcy looming...those were the good ol' days...
 
Timedog said:
From my extremely limited knowledge it seems like everyone in the thread is talking about (even when side-conversations not having to do with options come up) growth strategies. Stuff like "fundamentals don't matter" and talking about P/E as a measurement of something being "cheap". Is value investing not en vogue anymore?



Thanks for this. Someone earlier in the thread talked about how options trading helped liquidity. I didn't really understand what kind of liquidity until this post, where I went "duh!"


YES! I want to see some meltdowns in this thread.
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p/e is a rough measure of value, used as a proxy in value investing. you are right that "fundamentals dont matter" is not something a value investor would say, but looking for low p/e ratios is. though that is not a particularly sophisticated way of looking for value.

value investing has nothing to do with stocks fluctuating up or down and trying to profit on that. thats something like market timing maybe. value investing is more or less looking for companies where you can pay a relatively low price for a relatively high amount of something, usually either earnings, book value, dividends, something like that. the alternative to value investing is growth investing, which is looking for companies that may not have good earnings etc now, but you think they will in the future. not all trading, and mostly not the options trading this thread is about fit neatly into that rubric. a lot of this seems like trading on technicals (price support, pattern recognition kind of stuff) which is a different ball game.
 
tarius1210 said:
By looking at the underlying fundamentals of the company or by doing a technical analysis of the stock.
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The current price already factored all of the fundamentals in already, the only things that can change the current stock price dramatically is unexpected news regarding the company's earnings, change of management or external events such as a sudden drop in iron ore price (BHP, RIO) which the company has no control over.
 
sleeping_dragon said:
The current price already factored all of the fundamentals in already, the only things that can change the current stock price dramatically is unexpected news regarding the company's earnings, change of management or external events such as a sudden drop in iron ore price (BHP, RIO) which the company has no control over.
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Did you even read the question?

Also, what are you talking about? Iron ore prices!? Where the hell did that come from?
 
arglebargle said:
p/e is a rough measure of value, used as a proxy in value investing. you are right that "fundamentals dont matter" is not something a value investor would say, but looking for low p/e ratios is. though that is not a particularly sophisticated way of looking for value.

value investing has nothing to do with stocks fluctuating up or down and trying to profit on that. thats something like market timing maybe. value investing is more or less looking for companies where you can pay a relatively low price for a relatively high amount of something, usually either earnings, book value, dividends, something like that. the alternative to value investing is growth investing, which is looking for companies that may not have good earnings etc now, but you think they will in the future. not all trading, and mostly not the options trading this thread is about fit neatly into that rubric. a lot of this seems like trading on technicals (price support, pattern recognition kind of stuff) which is a different ball game.
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Yeah sorry, I was thinking of earnings per share when I said that, not p/e. Got them confused.

MVP, could you explain the reasoning behind your trade, I think that would be more beneficial to people. Why did you do a put on TXP? What info did you have that made you feel like it was a good trade, and where did you acquire it? Even if you bring up technical stuff (MACD or stochastics or whatever gobbletygook I was reading about today) in the midst of your explanation that most people don't know about, it helps for research for those that are truly interested. I feel like understanding the mindset and impetus for a trade would be wayyyyyy more informative than simply looking at a trade, which doesn't really give me any information.
 
MVP said:
Bingo, this is why I don't advocate paper trading (unless you're completely new), real money brings out the real emotions. Anyone can "let their winners ride" and drop their losers like it's nothing when it's not real money.

Averaging down is the mistake I made on that fateful day where I lost $30k in a day on NFLX. I mean how in the world could NFLX keep going down after already getting clobbered like 3 straight days, right? I mean it's freakin' Netflix, due for a bounce anytime now, right?

No.

That's where I learned about that saying "The market can stay irrational longer than you can stay solvent."
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Nothing irrational about NFLX getting clobbered. It was in a big bubble; if anything rationality returned.
 
Timedog said:
Yeah sorry, I was thinking of earnings per share when I said that, not p/e. Got them confused.

MVP, could you explain the reasoning behind your trade, I think that would be more beneficial to people. Why did you do a put on TXP? What info did you have that made you feel like it was a good trade, and where did you acquire it? Even if you bring up technical stuff (MACD or stochastics or whatever gobbletygook I was reading about today) in the midst of your explanation that most people don't know about, it helps for research for those that are truly interested. I feel like understanding the mindset and impetus for a trade would be wayyyyyy more informative than simply looking at a trade, which doesn't really give me any information.
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As far as TPX, it jumped up because of they acquired Sealy, and that caused it to gap up on hype, but when you look under the hood, they also acquired a lot of debt with that deal. Also, TPX has been on a big downswing, and the big gap up gave a lot of people who were underwater the opportunity to unload their shares at less of a loss. Doesn't always work that way but that's what I thought would happen.

Rubenov said:
Nothing irrational about NFLX getting clobbered. It was in a big bubble; if anything rationality returned.
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Of course not, but bounces are rational...back in 09/2011 it got clobbered for days, a bounce was expected, I was probably a few days early...nowadays bubbles don't pop straight down, there's always a "return to normal" phase, before further capitulation, and it happened with NFLX as well. I should have just gotten the next week's option and it would have made money, but nah, I had been on such a good run, I was supposed to just always be right.

Stages_of_a_bubble.png
 
So I decided to rummage through the old house and found my 90's investing books..including one on options haha.

 
How do I begin? I should have some extra money coming in soon, should I start with $500 or $1000? Has anyone tried TD banks stock trading software? Are their fees high? I am in Canada btw.
 
Im more interested to see how many people on here try to mimic what your doing and the losses associated...

Good luck on your 100k though, btw do you have any set time frame for this?
 
Gonna have to read through this thread. I've saved up over 7k in the last few months. Want to use some of it to invest a bit.
 
It seems to me that if you do it smart and don't get too greedy, options are low risk and and you're almost guaranteed to win money, even if it's only a litte extra?
 
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