I'm going to take $1,405.35 and turn it into $100,000 using stock options.
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Shao Kahn Brewing a Stew
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Castor Krieg
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Wait, I learned the only difference between American and European options is the fact that you can exercise American ones all the way to maturity, but European only at maturity. However in both cases execution is optional (hence the term 'option'). Or did he simply buy $700 worth of options?
Why don't you try butterfly, etc. spreads?
FlashFlooder
Member
less than 50/50, depending on how many 0's are on the board.
And with stocks you have the advantage of making more of an educated guess. Not to mention that the natural tendency for the average commodity is to move up over time.
The Elite
BOSS
I missed the bragging. He made it sound like he wasn't going to get to the 100k goal from the beginning. The thread title is just to draw people in.
buying out Sealy I think
False advertising if the OP doesn't deliver.
The Elite
BOSS
OP, do you do any research before making trades? For instance, you said that you were gambling on GOOG "breaking the all-time high" but didn't mention what logic brought you to that gamble. Did they release higher than expected earnings? Did they cut costs? Announce a new product? Has their stock being steadily increasing without fail for a long period of time?
The lament of many a poor bastard that got suckered into playing Roulette.
Ahh! Fuck those greens!
The lament of many a poor bastard that got suckered into playing Roulette.
So then I don't understand. Why did the OP sell for a loss of 700? Why didn't he just consider the money in 'limbo' and wait it out until it becomes a lesser lost or even a profit?
Sanky Panky
Banned
OP I hope you are out of GOOG by now
Exactly.
FlashFlooder
Member
correct, but most likely he would sell the contract itself long before that.
Shao Kahn Brewing a Stew
Banned
Banking on a rumor, I suppose.
Hey now! I've made $500 on a $25 chip!
Castor Krieg
Banned
Yes.
His options were going to expire. I assume he figured that the price he sold for was higher than he could have expected had he waited till tomorrow.
hey now! I've made $500 on a $25 chip!
You got lucky
Time decay, and I had that mentality when I first started years ago. "It'll come back, I'll hold longer"...It's a poisonous mentality, take your losses like a champ and move on is what I learned.
Op is trading options, which actually expire, potentially worthless. With just the stock you don't have to worry about that.
Options work differently than stocks. In theory it would be wise to wait it out but I think MVP said the options expire tomorrow. If he holds it he could potentially lose his entire investment if the option isn't exercised.
Oh yes, I was just making sure I understood the mechanics.
Razek: He can't just sit on it, if the option reaches expiry then he loses all that he invested.
Shao Kahn Brewing a Stew
Banned
You got lucky
I did. Me and my friends came back from New York trying to make up the money for the trip. Trip cost us $250 each, we recovered half of it back (that $500 was split 4 ways).
I make hundreds of trades everyday. Nearly every single one...
FlashFlooder
Member
Anyone who has ever invested in anything has experienced this.
The Elite
BOSS
Wow. Fascinating. I guess a big part of this is the mental game?
Castor Krieg
Banned
Yes, but at the same time you tie-up way more money while buying shares. Apple is trading @ 600$ per share, for that amount you can buy potentially hundreds of options on Apple shares.
So he buys the stocks at market value, and then sells them at the higher price to whomever traded that option with him? Wouldn't the person who sold the option just have to give him the difference between strike price and market price, without anyone actually buying any shares?
Zaraki_Kenpachi
Member
Pretty much, that's not typical at all.
And a fool and his money are soon parted...
All the time lol...also choosing the wrong strike, wrong expiry, etc...last year I bought BAC $7 puts at market open right after they announced Warren Buffett was investing in them, I knew that was all hype, bought a ton of options and ended up making an ok profit I was happy with even though it never made it under $7...if I had bought the next strike up, at the lowest I would have been sitting on over $350,000 profit
Dreamgazer
Member
you just move on and soak it down with a bottle of wine later.
Even a "mental game" is too much waste of time.
Zaraki_Kenpachi
Member
Not really a mental game, you still need to have a clue of what's going on or you might as well play the lottery or something. The only thing mental is you can't be foolish enough that every trade you make will always result in a profit. There is not a single person no matter how successful who this is true for and it never will be true, there will always be loses. That's the only mental thing.
All the time lol...also choosing the wrong strike, wrong expiry, etc...last year I bought BAC $7 puts at market open right after they announced Warren Buffett was investing in them, I knew that was all hype, bought a ton of options and ended up making an ok profit I was happy with even though it never made it under $7...if I had bought the next strike up, at the lowest I would have been sitting on over $350,000 profit
Where do you get your info from about companies and financial news?
This goes for all of the day traders and other traders in the thread.
He buys options that say he can buy the share on the given date for X amount of dollars, even if the stock has increased in value, or gone down. He makes money if it goes up.
Castor Krieg
Banned
He buys stock at the value of the call, not market value. He will earn money if the stock is above the strike price on his call minus the money he had to pay for options.
Financial reports, and general knowledge about the industry. If you are feeling lazy Forbes contributors publish their stock picks in every issue. Would be fun to make a table how these stocks performed relative to S&P500 over 12-24 months.
Some of my friends were really into this stuff last year - two in particular experienced something interesting which I then had followed for several days - it's probably pretty normal but since I'm no expert...
One of the stuff they invested in jumped higher everyday after being stagnant for over a year.
One started out with a smaller amount and the price shot up to a value of about 22000 $ for him - for the other one it was about 100000$. It was climbing everyday with a small decline inbetween (nothing to freak out about though). One day it reached an unbelievable high point but both of them wouldn't sell...even the next day they declined, and again and again...until it was worth shit and stayed that way ever since ^^
The best part is...they weren't even bothered - I probably would have cried, but seems like this happens all the time.
It's just funny, because being students one would think these are large amounts of money, but I probably missed something there.
One of the stuff they invested in jumped higher everyday after being stagnant for over a year.
One started out with a smaller amount and the price shot up to a value of about 22000 $ for him - for the other one it was about 100000$. It was climbing everyday with a small decline inbetween (nothing to freak out about though). One day it reached an unbelievable high point but both of them wouldn't sell...even the next day they declined, and again and again...until it was worth shit and stayed that way ever since ^^
The best part is...they weren't even bothered - I probably would have cried, but seems like this happens all the time.
It's just funny, because being students one would think these are large amounts of money, but I probably missed something there.
Castor Krieg
Banned
There is no option 'worth buying' i.e. giving you arbitrage opportunities. If there is you won't realize it without the use of a computer, and by that time automatic trades would be already executed and the arbitrage opportunity will end.
Sounds like they bought a penny stock pump and dump but they forgot to dump before the dump.
OK, replace "worth buying" with "worth gambling on". Or are you saying that it's completely 100% random? There must be some strategy involved, e.g. the logs that MVP posted earlier where some guy in 2008 made a ton of money (and explained in his comments why he bought each option)
Forbes magazine is terrible.
Bloomberg Businessweek is a better source.
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