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Investing Thread

Makes sense.

Can you always assume 100 for options trading? Can you buy fractions of options like you can buy fractions of stock on these sites? They seem pretty expensive and out of league for people like us.

I'm just curious, but why would you pick options and not shares for a game like this? I thought options were used more for hedging and less for speculation. Are you saying that this "stock" that trades at 660 might fluctuate more than 7 or 8 shares of RIG would?
 
As far as I know all regular contracts are for 100 shares.

And I use them because they fluctuate a lot more than the underlying stock. I never actually exercise the contracts and buy 100 shares of a company for X amount of dollars, I just let the option contract go up or down in price and then sell it like any other stock.

Where you could expect a stock to go up or down tens of percents over a few months time, certain options can go up or down hundreds of percents in the same amount of time. It's just way of leveraging your money.
 
RedLeader said:
I thought options were used more for hedging and less for speculation.
Click to expand...

They are I believe, kind of like insurance to protect your holdings. If you have 100 shares of Apple, you might want to buy a few Apple puts because their value will go up if your stock goes down. Stuff like that.

That's not how I use them though. I buy ONLY options and trade them like you would a stock. The upside is that your profits are magnified A LOT. The downside of course is that the downside is magnified A LOT as well. Also, unlike stock, they have an expiration date. If you buy options and they don't go your way, they can simply expire and become worthless, losing you ALL of the money you put into them. 8o
 
Just google options speculation and follow the rabbit hole. I'm sure that a couple of decades ago options served a purpose other than legalized, institutionalized gambling, but hedging isn't the driver in this vehicle anymore. How long it will last is anyone's guess. Too tightly wound into the system to change without serious disaster and even more manipulation.
 
GenericMind said:
Shorting something like Google is pretty dangerous imo. Still, it's possible to do if you want to. Put options are one possible way to do it.
Click to expand...

And coincidentally I heard something on Fast Money or some other CNBC show today about Google cutting back some of it's advertising revenues. I forget the specifics of why but I heard them say it.

Anyone mention 50 Cent's shameless promotion of a penny stock on twitter for his own benefit? I'm sure there was a thread or something, it was pretty interesting.
 
I hope everyone is ready for a new week of trading! I know I am! =D

Currently short RIG via May $80 puts that I bought Friday for $6.40 apiece. I was nervous about holding them over the weekend Luckily RIG is seeing pressure and is down 0.7% in premarkets this morning. I'll definitely be looking to get rid of these if RIG can get down a dollar to two this week.
 
I'm bored as shit today because RIG didn't move and I didn't get do do a damn thing except watch the market, so I'm going to do a little educational breakdown post for anyone interested in how I've been judging when to buy and when to sell this stock.

The stock in question is Transocean(RIG). For anyone paying attention to it, it's yielded great profits by following the same simple pattern over the past 6 months: Spike up to new highs, sell off to higher lows for 2 weeks, spike up to new highs, sell of to highers lows for 2 weeks, repeat:

164514_10150163319358362_829638361_8421633_3840064_n.jpg



But GenericMind! I remember you saying RIG will be well over $100 a share within the next year! Why are you currently betting on it going down?!

Simple. If you take a look at the chart above you'll see that just last week, RIG again confirmed the pattern by spiking to a new high of $83 before selling off a little. If you follow the pattern, the logical next "line" I would draw would be a red one.

But how do you know the current "green line" is done going up? Hasn't RIG's share price gone up the past 2 days?

Yes, but we still think it's heading down more. Why? RIG has also had a pattern in its volume, or shares traded each day. Volume seems to spike at the peak of the stock price spiking, then volume shrinks as a "red line" starts and buying volume evaporates. If RIG was going to keep heading up from here, the volume should be going up, not down. That's not the case as can be seem with the yellow lines below:

179889_10150163316793362_829638361_8421616_3347947_n.jpg


And it's as simple as that. The pattern won't hold forever, for sure, but until we see some kind of break away from it we can safely assume that it's safe to short, or bet on the stock going down, even though it's had a ton of upward momentum over the past 6 months and is one of the market's best performers in that time.
 
As expected, RIG hit down 2.5% today and triggered my sell order for those May $80 puts I bought on Friday. Net result: 8% gain in 3 trading days.

Now we wait in all cash for RIG to drop another dollar or two before we go long with some CALL options.
 
Same story as Friday. RIG opened with strength and was up 1.3% this morning, so I rebought the May $80 PUTs for $6.30 apiece. Hoping to sell them later today for a quick profit if/when RIG's strength fades as the day goes on.
 
Netflix(NFLX) is retardedly overbought right now. The stock has a PE of 70! Sure, it's a company with strong potential going forward but not THAT much. If you're holding it, dump it. THis chart is ridiculous:

 
Hope you didn't short NFLX GM.

PE sounds high in the abstract - but is it really unrealistic?
 
Yes it's unrealistic. There's no way they'll continue on a pace of growth that the PE suggests.

I didn't short it though, no. It might be something I'll consider if it goes much higher though.
 
Ford(F) is down a whopping 14% today after missing earnings on the wrong day at the wrong time. Would be an excellent longterm pickup for a 401k or an IRA imo.
 
ONE day, there may be more than X-ray machines and full-body scanners awaiting you at the airport. Listen out for the snuffling of sniffer mice as you pass through security.

The critters will not be angling for a snack, though. They are part of a bomb-detecting unit created by Israeli start-up company BioExplorers, based in Herzeliya, which claims that trained mice can be better than full-body scanners and intrusive pat-downs at telling a bona fide passenger from a terrorist carrying explosives.

http://bioexplorers.com/

http://www.newscientist.com/article/mg20927985.700-sniffer-mice-have-a-nose-for-explosives.html


buy buy buy
 
^ Bees? Bees?! I hope there never comes a day when we have to walk anywhere near bees while in an airport. I'll take a pat down instead.
 
Yeah apparently they can be genetically altered to be attracted to certain drug molecules the way they're attracted to pollen. Pretty crazy stuff.
 
RedLeader - Jan 21 said:
Let's do this. I'll play with you. July 1st opening bell.

$10,000 UFS - open 79.21 shares 126.25
$10,000 LEA - open 106.95 shares 93.50
$10,000 HRC - open 40.01 shares 249.94
$10,000 DST - open 47.02 shares 212.68
$10,000 OII - open 74.92 shares 133.48
Click to expand...

Opening Bell Prices Feb 8:

UFS
open 90.46
shares 126.25
-> $11,420.58


LEA
open 108.44
shares 93.50
-> $10139.14

HRC
open 40.07
shares 249.94
-> $10015.10

DST
open 48.93
shares 212.68
-> $10406.43

OII
open 78.37
shares 133.48
-> $10460.83

Total to Date $52442.08, so +$2442.08
 
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