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[argon]

Not just that, but you aren't putting a ton of money at risk. If I guessed wrong and it all went to hell tomorrow, I'd be out a couple hundred dollars and then I could start again. If I bought the same amount of stock on margin to get the same rewards, it would be a lot riskier.

The problem with buying calls is that time is not on your side. If your option is out of the money, the stock needs to go up a certain amount every day just to counteract the time decay. Combine that with the fact that we are currently in a bear/sideways market, and buying calls can be much riskier than holding the underlying stock.

Furthermore, if you buy at least 100 shares in a stock, you can sell call options every month against your position and lower your entry price. You limit your upside if there is a huge spike, but the time decay works for you.

I'm not totally against buying options, but I do think there's significant risk to them. And buying on margin is also pretty risky especially in these volatile times. Better to stay with a cash account IMHO.

 

[Zyzyxxz]

good thing I didn't get in on AIG.

Do you guys think it will be a good future investment now for the longterm since its dropped back to $3?

 

[RumblingRosco]

-

 

[Ether_Snake]

BTW guys I'll post what I posted in the econigaf thread this morning, not to sound alarmist, but it's looking more likely tonight.

#1: The more at risk investors are of potentially losing a lot of money (that includes countries who have loaned a lot of the money to the US, such as China and Japan for example), the less confidence they are likely to have in any plan.
#2: Since everyone knows some sort of plan will pass, the markets are going to attempt to rally as we get near to the passage of said plan. I say attempt because in reality, due to lack of confidence, everyone will be on the fence. Investors will seek to make quick money, lower their losses, etc., and run away after selling pretty much everything. They might invest in gold as a result, but even that would be a short lived bubble.
#3: Everyone realizes the plan will have completely failed as investors run from the markets with their gains or minimized losses, companies will immediately report bankruptcy, jobs will be lost en masse, and soon enough as a result of this China, Japan, and others, will have no choice but to get rid of their stakes.
#4: Crash of the economy as a result.

I think it would take around two weeks to get to #4.

Why? Because I think no one actually has confidence in the economy. The vast majority of investors believe deep inside that this shit won't work. People have been losing a lot of money, and has a result people are looking to make what they lost back soon, telling themselves "I win one last game, and then I'm out." like a gambler who lost his jackpot and is going on a losing streak.

No confidence means that any rally will turn into a sell off, especially as bad news keep coming (and they will, it takes time for the economy to turn around considering the current situation). Any other rally, such as one in the gold markets, would result also in a sell off soon after, although here gains may be only partially pulled out, so for example a gold rally following a tanking of the dow would then settle more or less slightly lower than the top of the rally, only to then gradually continue to lower and then tank as the overall economy reaches an outright depression.

Might sound alarmist but I see nothing that could lead me to believe otherwise. If there was actual confidence, fine, but no one has any anymore, the bigger the stakes the less confidence.

 

[RumblingRosco]

-

 

[Ether_Snake]

True gambler's always tell themselves "one last game," but they never really walk away. I'm not saying your idea is completely unreasonable, there are a lot of valid points, but rarely does a gambler give up the game altogether.

But we see this happen on the stock market every day.

 

[Ether_Snake]

There are rumors of an interest-rate cut coming to make up for the bailout's delay!

 

[RumblingRosco]

-

 

[RSTEIN]

JBL beat... stock is up 4% in pre-market... I'm sure that's the only call I'll be making money on today :lol

 

[FrankT]

Up next Wachovia;

Cost to insure Wachovia debt soars on WAMU failureReuters, Friday September 26 2008 (Adds background, other CDS spreads)

NEW YORK, Sept 26 (Reuters) - The costs to insure the debt of major U.S. bank Wachovia Corp against default rose sharply on Friday and its credit default swaps started to trade on an upfront basis following the collapse of Washington Mutual overnight.
Credit default swaps on Wachovia debt are trading at an upfront cost of 24.5 percent the sum insured, or $2.45 million paid upfront to insure $10 million in debt for five years, according to CMA Datavision.The swaps, which also require annual payments of 5 percent of the debt's face value, were trading at 670 basis points late Thursday.

Credit default swaps trade on an upfront basis when a company's debt is considered distressed and sellers of protection want to be paid more at the outset of the contract due to higher perceived risk of the firm defaulting on its debt.
Wachovia, based in Charlotte, North Carolina, is one of the United States' largest banks.

Typically swaps start trading on an upfront basis when spreads approach the 1,000 basis points area, meaning insurance is sold at an annual 10 percent payment of the debt's face value over a five-year period.
Other financial firms' CDS spreads also widened, with Goldman Sachs trading at 430 basis points compared with 363 basis points late Thursday.
Merrill Lynch was trading at 397 basis points, compared with 321 basis points on Thursday, while Morgan Stanley ad improved slightly to 776 basis points versus 783 basis points.

U.S. authorities seized control of Washington Mutual on Thursday and sold its banking assets to JPMorgan Chase for $1.9 billion.

The move marks the biggest ever failure of a U.S. bank and comes as the government struggles to clean up a banking system weighed down by toxic mortgage debt.
Negotiations over a proposed $700 billion bailout plan for the sector are continuing in Washington on Friday. (Editing by Walker Simon),

http://www.guardian.co.uk/business/feedarticle/7829447

MS may not be far behind either.

 

[lil smoke]

Buckle your seat belts and enjoy the ride down.

 

[Ether_Snake]

My ABX.TO is up (well gold is up in general right now). Everything else down. Can't believe CGT is heading for $8, that is dumb.

 

[Tarazet]

Lost everything I gained yesterday, still ahead on options in general but hanging on by a thread. Bought another HBC put because I got caught without my shorts on.

 

[gkryhewy]

Lost everything I gained yesterday, still ahead on options in general but hanging on by a thread. Bought another HBC put because I got caught without my shorts on.

I think you should stop. Seriously.

 

[lil smoke]

Wow. So, I saw my #1 position tanking back down, almost losing everything I made yesterday. I close immediately to salvage.

2 minutes later it shoots back up and beyond.

AbsolutelyUnfuckingbelieveable.

 

[TomServo]

My ABX.TO is up (well gold is up in general right now). Everything else down. Can't believe CGT is heading for $8, that is dumb.

Hoping that if there is a bailout it'll cause PMs to fall. I've got a good chunk of my smallish rollover IRA sitting in cash, want to add to my interest in gold.

 

[RSTEIN]

I think you should stop. Seriously.

ssshhhhhhh

 

[Ether_Snake]

STP down 8% on no apparent news. Solars are not doing well today.

 

[Tarazet]

I think you should stop. Seriously.

Why? I've come out ahead on every transaction. I made $60 off of the call that I said lost its gains not even fifteen minutes after I posted that message.

I could have made a lot more yesterday, and on my puts as well, but I just didn't know how the timing works.

 

[Tarazet]

I just saw an unauthorized trade on my account.. someone tried to buy 5 shares of AAPL at $100 GTEM. It was rejected, but I'm on hold with them now trying to figure wtf is going on.

 

[jmdajr]

man, sad stories

wamu yahoo board

 

[Tarazet]

And it vanished. <.< Um.

 

[gkryhewy]

Why? I've come out ahead on every transaction. I made $60 off of the call that I said lost its gains not even fifteen minutes after I posted that message.

I could have made a lot more yesterday, and on my puts as well, but I just didn't know how the timing works.

Because you are playing with fire, and I can tell that you, like me, are relatively risk-averse (being concerned with losses or gains of a couple hundred bucks here and there).

Just a personal recommendation that you stop. But good luck either way.

EDIT: fortunately no mystery trades on my zecco account.

 

[lil smoke]

My grandfather gave my brother and I each 50,000 dollars after he died. I bought a corvette with my money and he put it in the bank. I started stock trading and he got interested and wanted me to trade his money for him. Unfortunately yesterday I thought I had a steal with WM and put 62,250$ in the account towards WM and kept about 3000 in cash.. He told me not to gamble but I couldn't help it.. Today I woke up to see it trading at .14 cents. I sold premarket for 17 cents and got about 7000 dollars back and have 9924.36 in the account.
I called him this morning and told him about it and he demanded that I give him the corvette. I told him to G2H and that he gave me the money so its his loss. He threatened to go to court but it's all his fault so I'm not even worried.

Yeah some interesting reads there. It's sad.

 

[Tarazet]

Because you are playing with fire, and I can tell that you, like me, are relatively risk-averse (being concerned with losses or gains of a couple hundred bucks here and there).

Just a personal recommendation that you stop. But good luck either way.

Not really. I have good enough income, and long enough until retirement, that I don't need to worry if I lose a hundred here or there in an IRA. It is concerning if your mutual fund is down 20%, because they are very "sticky" and don't move quickly, so it would have taken a really long time to recover.

PS - by the time I called, they were all aware of it and had already corrected it. It was a system glitch, someone placed an order and it got duplicated over several customers' accounts.

 

[lil smoke]

PS - by the time I called, they were all aware of it and had already corrected it. It was a system glitch, someone placed an order and it got duplicated over several customers' accounts.

Was it a good order? "hey wait!"

 

[Tarazet]

Was it a good order? "hey wait!"

AAPL is nowhere near $100, but sure, I'd like a few shares at $100 right about now!

 

[toxicgonzo]

lol I got a slap on the wrist from my broker for free riding. I thought my bank deposit had gone through.

Did anyone else ever do something dumb like that? Oh well, it was worth a 20% gain, so I'm laughing all the way to the bank.

 

[Ken K in the Fresh!!!]

noob question forthcoming:

what happens to shares of a company once it is absorbed by a larger company? (i.e., wamu/jpmorgan)

be kind :/

 

[lil smoke]

noob question forthcoming:

what happens to shares of a company once it is absorbed by a larger company? (i.e., wamu/jpmorgan)

be kind :/

You owned WM shares?

I dunno. I thought if you owned WM you were f'd.

 

[Ken K in the Fresh!!!]

You owned WM shares?

I dunno. I thought if you owned WM you were f'd.

well my co-worker is considering purchasing its penny stocks expecting them to go up when the bailout deal goes through. i advised him not to, based on my own intuitions, but i couldn't explain why... should have taken more corporate finance courses during college...

 

[Ether_Snake]

Damn something's fishy about CGT. It's been down for days continously, always the same exact pattern, just a downward slope, and on no news at all. I don't like this>:|

STP down 11% is not cool either. It's because the credit tax thing from earlier this week for renewal energy might not happen.

Solar stocks fell Friday after the U.S. House of Representatives OK'd a measure to extend billions in tax credits for renewable energy, but the measure faces an uncertain future because it differs from the Senate version.

:/

At least I'm still in the green on it.

 

[Ether_Snake]

Tomorrow is the big day.

I'm not sure I have enough faith in the economy to hold onto a lot for long, so I'll be looking to sell what I can to make some money, maybe even sell ATVI. The only thing I would keep would be ABX, just for the heck of it.

EDIT: Commodities futures are down again.

 

[gkryhewy]

Wow - looks like everything is down pre-market. AAPL down 7.5%? To 119? Wow. POT down to 142? Wow.

What the hell is going to be up?

EDIT: Holy crap, AAPL at 116.50 and falling... does not compute.

 

[Tarazet]

I called it in the economy thread..

I think that the market was hoping for the full $700B to come at once, with the possibility for more. Wall Street will not be so happy with only $250B, plus the fact that the taxpayers' investment is now guaranteed by fees on Wall Street if the investments don't perform.

Happy with my positions this morning.. wishing I had bought Wachovia puts when I was thinking about it!!

 

[gkryhewy]

I called it in the economy thread..

Happy with my positions this morning.. wishing I had bought Wachovia puts when I was thinking about it!!

Good call, but I think this has more to do with the uncertainty in Europe than with the specifics of the bailout.

EDIT: AAPL at 110! .... This is becoming a bloodbath.

 

[FrankT]

It's uncertainty with the package and the Eurobanks. Going to be a rough one.

 

[lil smoke]

So I guess if you want AAPL now is the time? Or is it wait and see?

 

[gkryhewy]

So I guess if you want AAPL now is the time? Or is it wait and see?

I would wait until it turns around, personally. BTW, NTDOY is now in the 52.xx range (should have sold mine at 58.xx for a small profit, but I bought with the intention of holding for awhile).

 

[mollipen]

I have some Apple I got at $141, so right now them being so low is a bit freaky, but at the same time I'm thinking it might be a really nice chance to get more.

I would wait until it turns around, personally. BTW, NTDOY is now in the 52.xx range (should have sold mine at 58.xx for a small profit, but I bought with the intention of holding for awhile).

So, like, I was JUST thinking about asking about NTDOY. I have no experience trading stuff like they (OTC, pink slips, whatever). If I'm going through a place like TD Ameritrade is there really much of a difference to something like them? They seem really low for their usual, and I was thinking it might be interesting to pick up a little of them.

 

[kathode]

Holy shit, AAPL down 14%+ :O
Apparently been downgraded.

 

[gkryhewy]

So, like, I was JUST thinking about asking about NTDOY. I have no experience trading stuff like they (OTC, pink slips, whatever). If I'm going through a place like TD Ameritrade is there really much of a difference to something like them? They seem really low for their usual, and I was thinking it might be interesting to pick up a little of them.

It just trades like any other stock - it's just more difficult to get real-time quotes.

 

[Tarazet]

HBC is down 4%, which is a big swing for such a solid bank. Euro stocks really are getting hammered to pieces.

 

[Fatalah]

So I guess if you want AAPL now is the time? Or is it wait and see?

I just saw it hit 107! I want to buy so bad!

 

[Ether_Snake]

I called it in the economy thread..



Happy with my positions this morning.. wishing I had bought Wachovia puts when I was thinking about it!!

I think it has more to do with the crisis spreading abroad.

Everything down. ATVI down 6%, etc. I bet interest rates will be cut.

Gold is up a bit.

 

[lil smoke]

I would wait until it turns around, personally. BTW, NTDOY is now in the 52.xx range (should have sold mine at 58.xx for a small profit, but I bought with the intention of holding for awhile).

I got back in NTDOY last night, I'm in at 52.75 but just 10 shares to flip @ 56. I seriously considered dumping my entire account in, but nahhh!

Holding isn't a bad idea right now either though, with talks on competing with the iPods. And holidays are coming.

With TD, NTDOY trades exactly like any other stock.

 

[gkryhewy]

I got back in NTDOY last night, I'm in at 52.75 but just 10 shares to flip @ 56. I seriously considered dumping my entire account in, but nahhh!

Dude, 30 bucks? Why bother? :lol

 

[lil smoke]

Dude, 30 bucks? Why bother? :lol

Scared . I'll take little bits at a time though. It adds up over the year.

 

[Ether_Snake]

Gold rising rising rising.

 

[gkryhewy]

Scared . I'll take little bits at a time though. It adds up over the year.

You should just hold your ten shares. Can't fall very much further, IMO, and it should do well over the long run. I'm just saying that if you gain or lose 30 bucks, it's only a 60 dollar difference to you. Might as well hold.

Gold rising rising rising.

Not really; at least not the GLD etf.