mckmas8808
Mckmaster uses MasterCard to buy Slave drives
Yeah this is pretty interesting. I thought they would hold today because we actually got good news today.
Stock-Age: Stocks, Options and Dividends oh my!
- Thread starter koam
- Start date
Anyone still doing Options here...I did some quick reading here http://www.zecco.com/optionstradingeducation/Basics.aspx and I'm still utterly confused.
I'm gonna head over to http://www.investopedia.com and try to make some sense out of it.
I'm gonna head over to http://www.investopedia.com and try to make some sense out of it.
yoopoo said:
Yes, I do options and I have an OK grasp of the concepts.
Call = one contract obligating the writer to sell 100 shares of stock at a set price on or before a set date.
Put = one contract obligating the writer to buy 100 shares of stock at a set price on or before a set date.
With either one, if you sell to open, you are writing the option and you get the moneys, while holding the stock (or not, if you're a baller). If you buy to open, you are buying an option.
vpance
Gold Member
Buy call - you think the stock will rise
Sell call - opposite
Buy put - you think the stock will drop
Sell put - opposite
The longer the expiration date the more the option will cost or be worth. I like selling options.. get the money right away. And decreasing time premiums are working for you.
Edit: Of course buying calls is the only option with potential for unlimited gains which makes it very attractive.
Sell call - opposite
Buy put - you think the stock will drop
Sell put - opposite
The longer the expiration date the more the option will cost or be worth. I like selling options.. get the money right away. And decreasing time premiums are working for you.
Edit: Of course buying calls is the only option with potential for unlimited gains which makes it very attractive.
Ninja_Hawk
Member
sonarrat said:
I was actually wondering the same thing not too long ago, I looked it up but I didn't get it. So you're basically buying and selling contracts to buy or sell stocks at a certain price within a time period. But you have have the right to, you necessarily have to. This allows you to choose whatever price to buy or sell some shares at, but you don't have to. This could allow you to buy shares at a low price when it's high, or sell shares at a high price when it's low. Is that right?
Ninja_Hawk said:
Yes. Or you can sell the contracts.. the safer way of doing this is to buy the shares and write a call against them (because you've already bought the shares you're contracted to sell), or hold enough cash to buy the shares at the strike price and write a put (because you can't be asked to pay more than the contract price). If you don't do this, then it's called writing naked calls and puts, which is extremely risky.
tyguy20204
Member
Are we finally going to run out of steam soon?
tyguy20204 said:
People have been calling for this rally to end since it started. Several here on GAF earlier in the year called for the market to dive in the summer back to March lows. Professional traders and hedge funds have gone short at the slightest sign of weakness only to have their asses handed to them every single time the market looks like it wants to roll over. This market is unbelievable. This is one of the strongest rallies you will ever see in your lifetime.
I don't make any calls on the market. I let the market tell me what to do and it says be long. That being said, I've taken many of my positions off the table the last 2-3 weeks (I was too early to take profits on most, that's for sure). I've also been adding puts the last week or so (and way too early there). Today as I saw the market roll over after a morning pop for the second consecutive day I let go my core SPY holding (11% of my portfolio). We had very good news this morning and yesterday but the market couldn't hold on to its gains. The market no longer rallies and holds after good news. That's telling you something. People are fading the rallies and using them as an opportunity to sell.
1030 for the SP500 for me is the key number. I won't add back my SPY position unless we can hold above the number with some conviction. On a pullback I'll be adding on the long side if we get some stocks retest their 50 day moving averages.
Ninja_Hawk
Member
Ok, guys so i've been doing more research and i'm considering trading options, I was led by my brokerage firm to read this book that apparently all investors are supposed to regarding the risks of option writing and holding. I looked at a few chapters of it and I think I got the gist of some of the risks, basically just making sure you have the money to cover whatever option you are writing, there may be stuff i'm missing but that's what I got out of it.
I was just wondering if there was a simpler, more condensed version of that book or someone could explain the most important things about it. 'Cause as I was reading it I was just thinking, "do all investors really read ALL of this", and is it hard to get into because it sounds simple but going through that book and the warnings from my broker kind intimidated me.
I was just wondering if there was a simpler, more condensed version of that book or someone could explain the most important things about it. 'Cause as I was reading it I was just thinking, "do all investors really read ALL of this", and is it hard to get into because it sounds simple but going through that book and the warnings from my broker kind intimidated me.
Ninja_Hawk said:Ok, guys so i've been doing more research and i'm considering trading options, I was led by my brokerage firm to read this book that apparently all investors are supposed to regarding the risks of option writing and holding. I looked at a few chapters of it and I think I got the gist of some of the risks, basically just making sure you have the money to cover whatever option you are writing, there may be stuff i'm missing but that's what I got out of it.
I was just wondering if there was a simpler, more condensed version of that book or someone could explain the most important things about it. 'Cause as I was reading it I was just thinking, "do all investors really read ALL of this", and is it hard to get into because it sounds simple but going through that book and the warnings from my broker kind intimidated me.
The only real risk you need to know about is that you can lose everything you have in about 5 minutes.
Still trying to understand options:
Lets try this example: Say I have 100 shares of FRE, at a current price of $2.00. And I 'Sell to Open' with strike price of $3.00 - exp date of 9/19/09
What happens if the price does reach $3.00+ by 9/19?
What happens if it doesn't reach $3.00?
Lets try this example: Say I have 100 shares of FRE, at a current price of $2.00. And I 'Sell to Open' with strike price of $3.00 - exp date of 9/19/09
What happens if the price does reach $3.00+ by 9/19?
What happens if it doesn't reach $3.00?
thegreyfox
Member
yoopoo said:
If the buyer of the options contract exercise his right to buy the stock at $3.00, that will force you to sell at $3.00.
The contract will be worthless and you won't be forced to sell.
Bookmark this options calculator. It will help you understand how price/time/volatility affect the price of a contract.
http://www.cboe.com/LearnCenter/OptionCalculator.aspx
yoopoo said:
You stand to make $1 per share, plus whatever you got paid for the premium. The thing is that if FRE goes up to $100, you still only make the same amount. So when you buy-write, you amplify your returns, but only up to a certain point. If it goes up too fast, then you've missed out on potential gains.
Ninja_Hawk
Member
But I only lose as a holder the premium paid for the contract and as a writer if I write a call for say a stock to be 30$ but it drops to 25$ I have to pay that extra five bucks per share, and if it expires nothing happens to anyone except the holder who doesn't get back the premium, right?
thegreyfox
Member
If you write a call at a strike of $30, that just means that you are selling the stock at $30 only.
Nobody would bother to exercise the contract(buy at $30) if the stock goes under $30 because the market would be selling it for under $30($25 in your case). So the writer would just pocket the cost of the contract.
Nobody would bother to exercise the contract(buy at $30) if the stock goes under $30 because the market would be selling it for under $30($25 in your case). So the writer would just pocket the cost of the contract.
Ninja_Hawk
Member
thegreyfox said:
Oh right, I meant to say to put at $30.
thegreyfox said:
Yes. And there are different ways to play this. If you write an out of the money contract (stock is currently $25, and you'll sell at $30), you want the stock to stay in the range between 25-30 and never get exercised. If it goes too low, then you won't get exercised, and the premium will cushion the blow some, but you've still lost money.
If you write an option that's deep in the money - say the stock is $30 and you offer to sell it for $10 - then you benefit the most if the stock goes down. Then you can buy out the option at a much lower price to close the position and wait for the stock to recover, and in the meantime, you've been getting dividends at a level you wouldn't have been able to afford otherwise.
I can feel it coming over me
I feel it all around me
Ive been waiting for this moment all my life
it's my destiny
There's a fire deep inside of me
it's waiting to come out now no matter what,
no matter how,
I know I'll make it through somehow
cuz when the road feels too long
Ill still be holding on
I'm gonna keep on going,
I know I'll be strong
Indestructible
I wont let nobody break me down
Indestructible
I feel it all around me
Ive been waiting for this moment all my life
it's my destiny
There's a fire deep inside of me
it's waiting to come out now no matter what,
no matter how,
I know I'll make it through somehow
cuz when the road feels too long
Ill still be holding on
I'm gonna keep on going,
I know I'll be strong
Indestructible
I wont let nobody break me down
Indestructible
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
kathode said:
Oh snap!! This market is unstoppable. :lol
Ninja_Hawk
Member
I made quite alot off of GME today, i'm still rather optimistic about them for this fall, so I think i'll hold on til then.
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
Dow does it again. Up for 8 straight sessions. This is the best run for the DOW since April 2007.
http://finance.yahoo.com/news/Investors-trading-3-stocks-apf-3151182490.html?x=0&sec=topStories&pos=4&asset=&ccode=
You see articles like this scare the shit out of me. That's why I stopped trading FRE, FNM and AIG last year. But then I see the huge run up these stocks have had since I'm like what the hell. People have been saying the same thing about Citigroup and now it's trading at 5 bucks.
Ether_Snake
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tarius1210 said:
I'm still down 22%. My shares are priced at $10.89:| I wish I had bought more when it was much lower but didn't have enough money at the time.
At least I am now even on HON, RTP, and TTWO (which should be worth more if it wasn't for the USD and CAD being so close now). Same for my ATVI shares. Down on CGT, BHI, STP.
Now I'm wondering if I should prepare to just get rid of anything that breaks even. They are markets I don't really understand. But I think I'll just keep everything. Might get rid of HON when if it rises enough. The rest I think I could keep for some time. I'm not sure really. I'd be fine selling most of the above, except for ATVI, TTWO, and CGT. I want to have less money in stocks.
I gained 50% return a few weeks back on PXS and IFL. Sold off for a profit, and recently bought back in. Hoping to make a bit of money with short term gains (riding the weekly/monthly highs and lows) before going in for the long term. But you never can tell these days. Lot of market recovery conjecture but nothing actually substantial.
It's certainly been a crazy couple of months!
In this chart I set the buy prices from the peak on Oct 12, 2007. It's going to be a while before we get back there again.
This one is from the bottom and obviously looks much better. These are pretty useless without my cost basis, but I like to use them to compare how the funds have been weathering the drop and recovery compared to the indexes.
I can't believe how close today was. Altogether my funds are down roughly 0.00000295% :lol
In this chart I set the buy prices from the peak on Oct 12, 2007. It's going to be a while before we get back there again.
This one is from the bottom and obviously looks much better. These are pretty useless without my cost basis, but I like to use them to compare how the funds have been weathering the drop and recovery compared to the indexes.
I can't believe how close today was. Altogether my funds are down roughly 0.00000295% :lol
Ether_Snake
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Yen Gains as Hatoyama's DPJ Sweeps to Power in Japan, Driving Down Stocks
You know what that headline was earlier today? Something like "DJP win likely means rise in stocks, drop in bonds".
What bullshit.
You know what that headline was earlier today? Something like "DJP win likely means rise in stocks, drop in bonds".
What bullshit.
Ether_Snake
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Disney buys Marvel! MVL up 25%.
You can kiss that "Disney interested in buying EA" rumor good bye now.
You can kiss that "Disney interested in buying EA" rumor good bye now.
It's funny. I walked into work today and my co-worker says "Sell your stock, your rich. Disney just bought us. I'm like "What the hell are you talking about". I always watch Bloomberg TV before I leave for work and I didn't see anything about an acquisition. So I checked my e-mail and it turns out all of us recieved a letter from Disney's CEO. I'm like "What the fuck?". I never knew we were an acquisition target.Ether_Snake said:
As a Marvel employee and as a shareholder I am so torn on this deal.
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
tarius1210 said:
That's crazy. So does that means some of you guys will be fired?
Ether_Snake
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Damn, BHI dropped almost 10% today after announcing that they'll acquire BJ Services. :|
Now that DIS is not gonna buy ERTS, the next potential buyer in line would be MSFT I think, but I don't see them doing that. Would be a bad move, they don't need a weight on their shoulders.
Now that DIS is not gonna buy ERTS, the next potential buyer in line would be MSFT I think, but I don't see them doing that. Would be a bad move, they don't need a weight on their shoulders.
Ether_Snake
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That wouldn't be impossible. ERTS is just too big though after buying MVL. I doubt it on COOL though, but THQI could be possible. But whatever the case, it is unlikely in the near future now.
:lol Thanks. I think it's a great move for both DIS and Marvel. Financially, it's not really accretive for DIS in the near future but the upside is huge. Movies, rides, animation, publishing, internet, etc.
I sold my SPY position last week as the SP500 broke 1030. I also have been selling my winners in anticipation of some sort of correction from these overbought levels. Puts have been really frustrating. Volatility isn't really moving and some of these tech stocks are monsters. I added two new positions today SNC.TO and FN.TO. I have 56 longs, 2 shorts, and 9 puts.
I sold my SPY position last week as the SP500 broke 1030. I also have been selling my winners in anticipation of some sort of correction from these overbought levels. Puts have been really frustrating. Volatility isn't really moving and some of these tech stocks are monsters. I added two new positions today SNC.TO and FN.TO. I have 56 longs, 2 shorts, and 9 puts.
Ether_Snake
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One thing that is bad for Disney in this deal is that it keeps making them even more reliant than ever on the entertainment sector. It's not too bad, but it's more of the same to them. It's basically 4B in buying IPs like Spider Man, Wolverine, etc. Feels more like an attempt to prevent someone else from buying them, someone that would be more diversified by buying Marvel and hence that would then start eating away seriously at Disney. It makes sense for them to buy Marvel, but it's a bit of "oh I wish I invented Spider Man, but I guess I'll buy him".
Then again I think that outside of Pixar, Marvel is all that Disney will really have that's worth anything under their belt in the end.
Then again I think that outside of Pixar, Marvel is all that Disney will really have that's worth anything under their belt in the end.
Ether_Snake
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oops
Ether_Snake
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That would be a great ticker!
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