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

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lsslave said:
Stuff...
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I've already posted in this thread but I just have to comment on the post above.

This is the worst type of dangerous misinformed garbage that I've ever read on NeoGaf.

Trading with a 33% stop loss is a recipe for disaster, you will be wiped out in next to no time.

Ideally you should only be risking 0.5% - 1.0% of your total pot per position if you want to stay in the game long term. Google "trading position sizing" for more info, there's plenty available.

You should be timing your entry close to price support (if going long) or price resistance (if going short) so that if the nearby level is broken you know you were wrong and can exit the trade immediately.

Trading isn't being about being right all the time, it's about running your winning positions and ruthlessly cutting your losing positions as soon as possible.

Never forget this. If you do, you will pay dearly for it.
 
SpinningBirdKick said:
Trading isn't being about being right all the time, it's about running your winning positions and ruthlessly cutting your losing positions as soon as possible.
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One of my favorite quotes: "Stop worrying about always being right, and worry about always doing the right thing."
 
SpinningBirdKick said:
I've already posted in this thread but I just have to comment on the post above.

This is the worst type of dangerous misinformed garbage that I've ever read on NeoGaf.

Trading with a 33% stop loss is a recipe for disaster, you will be wiped out in next to no time.

Ideally you should only be risking 0.5% - 1.0% of your total pot per position if you want to stay in the game long term. Google "trading position sizing" for more info, there's plenty available.

You should be timing your entry close to price support (if going long) or price resistance (if going short) so that if the nearby level is broken you know you were wrong and can exit the trade immediately.

Trading isn't being about being right all the time, it's about running your winning positions and ruthlessly cutting your losing positions as soon as possible.

Never forget this. If you do, you will pay dearly for it.
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Seconded. That post is bullshit and you're not diversifying at all. If you're investing that heavily you better not need a single dime of that money or be hedging heavily for the catastrophic loses that are almost guaranteed to come with that outlook. Not smart investments at all unless you enjoy losing your money in crazy gambles.
 
OP, you realize that options are designed so that you can protect yourself if you're wrong right? You definitely should sacrifice some potential profits in order to hedge. In the long run, it's actually more +EV.

Derivatives can be incredibly risky...but they are actually designed as an insurance policy against risk (kind of ironic). I would highly recommend you slow down a bit.
 
If the OP is doing what I think he's doing. It's similar to that of an article I read in Malcolm Gladwell's book, What the Dog Saw. From what I gathered, these things rarely work out.

Though admittedly I have next to no idea what's going on.
 
Edit:

You guys seem to be disagreeing with my post without getting what I was pointing out...

So I'll skip numbers and put it in words.

#1 - Stocks are the smallest amount of your savings (after a savings account and retirement)

#2 - Set a hard limit for how much you're willing to gamble. If one of your stocks drops below that pull out no matter what. By sticking to that you won't feel like an asshole of it corrects itself but you also won't lose everything if it doesn't correct itself.

#3 - Reinvest dividends paid out

#4 - If a stock goes well for you and you cash it out only reinvest half of it, don't just go "I made 5000$ I'm going to reinvest all of it and make more!" only put in the 2500$ and the other 2500$ keep out.

#5 - Unless you have information long term trading is the only way to see growth. It is the only way to "play" the market. And if you put all your money into one stock you will lose everything, let alone all in one market (I know people who lost a fortune in the 80s due to Oil and being too invested in one market)
 
lsslave said:
I'm talking the maximum loss acceptable on the stock.

You know how many people end up losing everything because "It keeps going up! It has to get higher!" or "Oh god... it has to go back up". If things could have been better you will hate yourself for your call if you don't make it cold. I pick a number where I will play with each stock and after that it is cut. If you don't have that limit in place your emotions will come into factor and then you make bad choices hoping for something else.

The 33 percent is the number I stand by, on a stock by stock basis (if I was ever at 33 percent overall loss I'd give up on the market and focus on savings)

Just so we are aware, the way you're saying it is that if you put a stock in at 100$ and it goes to 99$ you get out of that stock? Because you're going to eat up more in fees than will ever be worth it get a savings account and quit giving a broker all your money.

These guys were talking money, I drew an example of a safe savings/investment example where they could (acceptably) take a small chunk of money and play their game.

And as for misinformed, everything I do is based on what works for me. I treat any investments like a blackjack table (although less alcohol) and don't let emotions get into it. My savings accounts get their money and I party the rest away. Maybe it won't work for you but I learned when I bought my first stock and ended up losing half my money (not much, was young and a small investment) to set a hard limit to the most I'll ever let it fall.



The majority of my post was pushing the importance of savings/retirement first. And long term investments. I don't quite understand what your biggest disagreement is but long term investing is a lot safer, I was just throwing rough numbers out instead of a wall of text.
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The 33% you pulled out of the air so it holds no value and you're investing only $250 a month in retirement but $500 in stocks is not smart. You're not diversifying and if shit goes south you're going to get a pummeling. You're over extending your position unless you have a shitload of money.
 
lsslave said:
Just so we are aware, the way you're saying it is that if you put a stock in at 100$ and it goes to 99$ you get out of that stock? Because you're going to eat up more in fees than will ever be worth it get a savings account and quit giving a broker all your money.
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Yes and No. Let me explain...

If you look at a price chart of a stock, index or currency there are often prices where the price bounces up (support) or falls down from (resistance).

Ideally you should be buying close to support levels or selling near to resistance levels.

In your example buying in near $100 is fine, if support on the price chart is at $100. If that support level is broken, you exit.

However, if $100 is just a random value in the middle of the price range setting your stop below this would make little sense if its not a support level. In this case you have to ask why you're buying in far from a support level? You'll most likely get whipsawed out of the position.

If you're currently trading with random entries like this, read up on technical analysis and position sizing it will only do you good.
 
I've been away from my desk for a bit so if you pm'd me wanting in the Investopedia game I just now sent the invites. Sorry for the delay.
 
Zaraki_Kenpachi said:
The 33% you pulled out of the air so it holds no value and you're investing only $250 a month in retirement but $500 in stocks is not smart. You're not diversifying and if shit goes south you're going to get a pummeling. You're over extending your position unless you have a shitload of money.
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Actually my initial point is 750$ savings (savings/retirement) 250$ stocks. In a thread like this where people were talking options I was drawing a line for the only way to play the market safely.

And the 33% is my personal hard line, if a stock is in either direction and my initial investment has changed by that much there is no question I cut the stock. It will probably go down if it has gone up 33% in a short time and if it falls it will keep falling, that is my "emotional cutoff".

Personally my investments are 2000$ a year and I am more than comfortable with that. And they are all long term investments, nothing that I would ever think about watching on a day-to-day basis.

SpinningBirdKick said:
Yes and No. Let me explain...
*snip*.
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Alright, what I am saying is that if you see something unprecedented (like a stock collapsing or having crazy gains) and you either A) hope it will recover or B) think it will keep growing set yourself a limit. Take for example Nintendo (gaming forum, easy example) their stocks were ridiculous on the weight of the DS and the Wii, but now their stocks are normal. There are people who probably ended up losing money because they kept waiting for them to go up. It isn't that their stocks are bad now, it is that they kept thinking they could make more. I suggest a hard limit, when you're pulling out
 
lsslave said:
Alright, what I am saying is that if you see something unprecedented (like a stock collapsing or having crazy gains) and you either A) hope it will recover or B) think it will keep growing set yourself a limit. Take for example Nintendo (gaming forum, easy example) their stocks were ridiculous on the weight of the DS and the Wii, but now their stocks are normal. There are people who probably ended up losing money because they kept waiting for them to go up. It isn't that their stocks are bad now, it is that they kept thinking they could make more. I suggest a hard limit, when you're pulling out
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But everything you're saying can be summed up into: "Trade with your head, not your heart" or some other dumb phrase about how not to be an idiot. You don't need examples and percentages to simply say "use common sense" or "cut your losses quick".

Timedog said:
what do these two numbers mean?
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Every transaction he makes with Fidelity costs him an $8 fee plus 75 cents per contract (100 options) he buys. When he grabbed GOOG he bought 14 contracts, so the total fees he paid would be 7.95 plus 14x.75. Then he paid .90 x 1400 for the actual options.
 
lsslave said:
Alright, what I am saying is that if you see something unprecedented (like a stock collapsing or having crazy gains) and you either A) hope it will recover or B) think it will keep growing set yourself a limit. Take for example Nintendo (gaming forum, easy example) their stocks were ridiculous on the weight of the DS and the Wii, but now their stocks are normal. There are people who probably ended up losing money because they kept waiting for them to go up. It isn't that their stocks are bad now, it is that they kept thinking they could make more. I suggest a hard limit, when you're pulling out
Click to expand...

Stock stories and fundamentals don't matter.

The only thing that matters is the price action.

You want to be owning stuff that is going up and selling stuff that is going down.

If the price action changes (support or resistance levels broken) you exit the original position because it's not behaving how you expected.

It really is that simple.
 
Izayoi said:
Hey, I just checked my Powerball ticket and I won $4!

Thanks for reminding me, OP.
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Actually.. I think today I'll grab some scratch offs and see what destiny has in store for me.
 
Manaka said:
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.
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It doesn't pay to have emotional attachments when it comes to investing.
 
worldrevolution said:
But everything you're saying can be summed up into: "Trade with your head, not your heart" or some other dumb phrase about how not to be an idiot. You don't need examples and percentages to simply say "use common sense" or "cut your losses quick".



Every transaction he makes with Fidelity costs him an $8 fee plus 75 cents per contract (100 options) he buys. When he grabbed GOOG he bought 14 contracts, so the total fees he paid would be 7.95 plus 14x.75. Then he paid .90 x 1400 for the actual options.
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Is there a fee like the 75 cent one for normal stocks?
 
SpinningBirdKick said:
Stock stories and fundamentals don't matter.

The only thing that matters is the price action.

You want to be owning stuff that is going up and selling stuff that is going down.

If the price action changes (support or resistance levels broken) you exit the original position because it's not behaving how you expected.

It really is that simple.
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This.

And finding key levels is easier than one might think. They are often around even dollar marks. Kind of an archaic way of looking at things, but yet it still has a big effect on price.
 
I'm not gonna lie; I'm having loads of fun with this GAF stock game. I'm scouring the web for random stock tips from sketchy investor forums seeing where the results land me. It's quite awesome, plus I'm learning a thing or two about the market. Go for it folks!
 
guskicksbus322 said:
I'm not gonna lie; I'm having loads of fun with this GAF stock game. I'm scouring the web for random stock tips from sketchy investor forums seeing where the results land me. It's quite awesome, plus I'm learning a thing or two about the market. Go for it folks!
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It's fun for me too - I decided to try and jump onto the 'biggest gains' early in the morning today, as I've always wanted to try that in a game... I've learned that

1. If I do it, don't do it for a very long time - as those stocks ALL seem to crash or even out by the end of the trading day.

2. Don't jump in too late.

3. Probably avoid those.

All in all, lost 100 bucks until I decided to sell them an hour or so ago - lucky I did because they're even lower now (like Tempurpedic) - and decided to invest in what's been tried and true for me - tech, mining and pharmaceuticals.

edit: woo, just checked, up over 80 bucks since then
 
guskicksbus322 said:
I'm not gonna lie; I'm having loads of fun with this GAF stock game. I'm scouring the web for random stock tips from sketchy investor forums seeing where the results land me. It's quite awesome, plus I'm learning a thing or two about the market. Go for it folks!
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I'm down $110.00 bucks.. I'm way to conservative even with monopoly money. LOL
 
I haven't been able to try the game because I'm at work... does it simulate based on the real market? So, you have to play while the market is live?
 
Ok, any game developers reading this right now.....

Make a DS, iPhone, Android.. something app.... in the vein of GameDevStory... a stock market RPG.

You are an investor, given X amount of dollars and you have all the ways to bet on the market that you have today, through options, stocks, and whatever else.

A simulated stock market runs during the day that has randomizing effects based on strong fictitious companies.

Leveling up gives you access to more accurate sources of trade information, better trade quotes, etc. You can risk it all and live like Gordon Gecko or end up sucking cock in a NYC back alley to buy some meth.

It'd not only teach you some of the ins and outs of trading, but provide some fun.

Make it happen. I'd buy that game.
 
guskicksbus322 said:
Oh, PM WhatRobEats, he put it together.
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I think I got back to everyone. This is turning out to be pretay, prettay, pretttay popular.

Seriously if someone other than me wants to make a thread for it go for it. I hate that we keep shitting up the MVP's thread.
 
Davedough said:
Ok, any game developers reading this right now.....

Make a DS, iPhone, Android.. something app.... in the vein of GameDevStory... a stock market RPG.

You are an investor, given X amount of dollars and you have all the ways to bet on the market that you have today, through options, stocks, and whatever else.

A simulated stock market runs during the day that has randomizing effects based on strong fictitious companies.

Leveling up gives you access to more accurate sources of trade information, better trade quotes, etc. You can risk it all and live like Gordon Gecko or end up sucking cock in a NYC back alley to buy some meth.

It'd not only teach you some of the ins and outs of trading, but provide some fun.

Make it happen. I'd buy that game.
Click to expand...
Always wondered why no one ever made an RPG out of the trading world. Seemed like a natural fit.
 
Ok, any game developers reading this right now.....

Make a DS, iPhone, Android.. something app.... in the vein of GameDevStory... a stock market RPG.

You are an investor, given X amount of dollars and you have all the ways to bet on the market that you have today, through options, stocks, and whatever else.

A simulated stock market runs during the day that has randomizing effects based on strong fictitious companies.

Leveling up gives you access to more accurate sources of trade information, better trade quotes, etc. You can risk it all and live like Gordon Gecko or end up sucking cock in a NYC back alley to buy some meth.

It'd not only teach you some of the ins and outs of trading, but provide some fun.

Make it happen. I'd buy that game.
Click to expand...

Anyone else interested in developing this? PM me... I might write this.
 
worldrevolution said:
Actually.. I think today I'll grab some scratch offs and see what destiny has in store for me.
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That could be a fun thread. We pick a day, everyone who wants to just buys some scratch and wins worth a certain amount, and we post what we win (if anything). Would be cool to see some different kinds from around the world.
 
SpinningBirdKick said:
Stock stories and fundamentals don't matter.

The only thing that matters is the price action.

You want to be owning stuff that is going up and selling stuff that is going down.

If the price action changes (support or resistance levels broken) you exit the original position because it's not behaving how you expected.

It really is that simple.
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A-freakin-men.

Overvalued stocks can and will go up for much longer than you think, and undervalued stocks can and will keep dropping longer than you think. What's Priceline's p/e nowadays, 200x or something? Eventually these high-flyers come back down to Earth, but no way to really predict when, so playing them long-term is tough, so you play the fluctuations using options, spreads, condors, whatever...or just play the underlying stock directly up or down.

I don't care what any of my stocks does a year or even a month from now. They could go bankrupt for all I care, all we're playing is movement, momentum, etc.

In other news, TPX play working beautifully, been bleeding all day, .85 contract now 1.30, and this sucker doesn't expire until Oct. 20
 
MVP, are you still buying and selling today?

Correct me if I'm wrong but those funds are still unsettled before you can sell again.

Also, you should update your current balance in the OP too.
 
MVP said:
A-freakin-men.

Overvalued stocks can and will go up for much longer than you think, and undervalued stocks can and will keep dropping longer than you think. What's Priceline's p/e nowadays, 200x or something? Eventually these high-flyers come back down to Earth, but no way to really predict when, so playing them long-term is tough, so you play the fluctuations using options, spreads, condors, whatever...or just play the underlying stock directly up or down.

I don't care what any of my stocks does a year or even a month from now. They could go bankrupt for all I care, all we're playing is movement, momentum, etc.

In other news, TPX play working beautifully, been bleeding all day, .85 contract now 1.30, and this sucker doesn't expire until Oct. 20
Click to expand...

Did you make any put moves on FB when it came out?
 
SpinningBirdKick said:
Stock stories and fundamentals don't matter.

The only thing that matters is the price action.

You want to be owning stuff that is going up and selling stuff that is going down.

If the price action changes (support or resistance levels broken) you exit the original position because it's not behaving how you expected.

It really is that simple.
Click to expand...

As someone hasn't jumped in and doesn't fully understand all the lingo, this bit makes complete sense.
 
MVP said:
A-freakin-men.

Overvalued stocks can and will go up for much longer than you think, and undervalued stocks can and will keep dropping longer than you think. What's Priceline's p/e nowadays, 200x or something? Eventually these high-flyers come back down to Earth, but no way to really predict when, so playing them long-term is tough, so you play the fluctuations using options, spreads, condors, whatever...or just play the underlying stock directly up or down.

I don't care what any of my stocks does a year or even a month from now. They could go bankrupt for all I care, all we're playing is movement, momentum, etc.

In other news, TPX play working beautifully, been bleeding all day, .85 contract now 1.30, and this sucker doesn't expire until Oct. 20
Click to expand...

Trying to figure this out.

So a "Put" is an option to sell. So you bought the option at a certain sell price. So if the stock actually does worse, the value of your sell option goes up since it still means the stocks can be sold at that price? I feel like I'm missing something.
 
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