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InvisibleStonehenge
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Re: Stock Update for March 16, 2009 - No Action [Re: geokills]
    #9983797 - 03/16/09 05:55 PM (14 years, 10 months ago)

I already said the bottom was behind us. But do I get any credit for saying that? Of course not. Today I was doing great, then it went down, and then down... But I didn't sell anything and I believe we will see the market higher by the end of the week.


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“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835)

Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755


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OfflineHotnuts
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Re: Stock Update for March 16, 2009 - No Action [Re: Stonehenge]
    #9987884 - 03/17/09 11:00 AM (14 years, 10 months ago)

I don't think the bottom for stocks is in yet.


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InvisibleStonehenge
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Re: Stock Update for March 16, 2009 - No Action [Re: geokills]
    #9988303 - 03/17/09 12:33 PM (14 years, 10 months ago)

Today looks like a repeat of yesterday. I looked an hour ago and I was up almost 3k. Now I look and I'm up 2k. I suppose by the end of the day I'll be down ~1k?

Geo, do your good 5 days include tuesday of last week? That was my best day ever. I hope to repeat that day eventually and even to surpass it.

I'm trying to learn more about the market and how it works. I'm not going to rush out and do a lot of risky things but knowledge is power. Lately, I've been studying options which look very risky. They are also complicated, much more so than investing or even day trading. The terms and how they work is complicated enough but the strategies for making money with them are even more so.

I could see how I might write a few options. If a stock was near 13, for example, and I thought it was near it's top and might go sideways or down, I could sell or write a call on it. The call for a month at the strike price of 13 might bring me 75 cents. That means if the price rises less than 75 cents, I have made more by selling the call than by sitting on it. If the price goes down, I can sell the stock and keep the whole 75 cents since the option will be worthless. But, if I sell the stock after a dip and then it shoots up before the option expires, I can lose quite a bit since I have to cover. Instead of selling the stock, I could buy a put at 12.25 strike which means if it goes below that I get my money back, keep the call premium and break even except for the cost of the put and broker fees. If that sounds simple then you probably know a ton about the market.


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“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835)

Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755


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OfflinegeokillsA
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Stock Update for March 17, 2009 - WFC, JPM, MGM, LVS [Re: Stonehenge]
    #9989016 - 03/17/09 02:27 PM (14 years, 10 months ago)

The S&P 500 closed above a key resistance level of 771 this afternoon, which will likely catalyze the market's attempt at its 50-day moving average which sits just above the 800 level on the S&P.  In recognition of the heavy resistance that will be encountered above 800, I am starting to trim my biggest winners from the past week, building up cash for an inevitable consolidation that may present better buying opportunities.


  • Wells Fargo (WFC) - Sold 40 shares @ $14.50

    With shares up 25% from where I made my purchase only one week ago, I am going to take some of these gains off the table.  WFC has recovered nearly 88% from its 52-week low set earlier this month.  That is an incredible move and I will wait for the shares to pull back to put more money to work.


  • JPMorgan (JPM) - Sold 35 shares @ $25

    JPMorgan wasn't left out.  As one of the best banks out there, their shares have climbed nearly 70% from their low set earlier this month (and more than 30% above my last purchase on March 4th).  I believe that JPM will be one of the best banks to own as we emerge from the current financial crisis, but it is important to preserve profits in this environment, as the market is not safe right now and these bank stocks in particular have shown us incredible moves.


  • MGM Mirage (MGM) & Las Vegas Sands (LVS) - MGM will be reporting their quarter tomorrow after the market close.  If the market sees continued strength through the end of the week, this may provide an excellent opportunity to SHORT the casino stocks like MGM and LVS, particularly if they get a pop off the MGM quarter.  The casino business is being run into the ground, with major operators having trouble dealing with enormous debt obligations coming due in the near future.  Even though these stocks are already in the single digits, I think they can still be sold.


Discretionary Portfolio as of 3/17/2009:
  • 19.4% Cash
  • 10.3% Altria (MO)
  • 9.4% WalMart (WMT)
  • 8.8% Kinder Morgan Energy Partners (KMP)
  • 6.0% UltraShort 20yr+ US Treasuries (TBT)
  • 4.5% iShares FTSE/Xinhua China 25 Fund (FXI)
  • 4.5% Marathon Oil (MRO)
  • 4.3% Nordic American Tanker (NAT)
  • 4.1% General Electric (GE)
  • 3.9% BP plc (BP)
  • 3.8% Gilead Sciences (GILD)
  • 3.7% Celgene (CELG)
  • 3.6% Powershares QQQ Trust [Nasdaq 100 equiv] (QQQQ)
  • 3.5% Ultra S&P500 Proshares (SSO)
  • 3.4% Hatteras Financial (HTS)
  • 3.2% Pepsico (PEP)
  • 2.3% JPMorgan (JPM)
  • 1.2% Wells Fargo (WFC)



Stonehenge: Yes the charts in my last update include Tuesday (just look at the date timeline on the X axis).
I don't use options currently, as I have not taken enough time to properly educate myself on their use.


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Offline0xYg3n
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Re: Stock Update for March 17, 2009 - WFC, JPM, MGM, LVS [Re: geokills]
    #9989149 - 03/17/09 02:52 PM (14 years, 10 months ago)



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Offline0xYg3n
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Re: Stock Update for March 12, 2009 - WFC, GE, MO, VZ [Re: geokills]
    #9989217 - 03/17/09 03:02 PM (14 years, 10 months ago)

Quote:

geokills said:


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InvisibleChespirito
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Re: Stock Update for March 12, 2009 - WFC, GE, MO, VZ [Re: Chespirito]
    #9989397 - 03/17/09 03:34 PM (14 years, 10 months ago)

Quote:

Chespirito said:
Well AIG is making me happy.  I got in on this around its lowest point for a decent amount of cash, and now it is up rather substantially.  I am just trying to figure out when to sell now.  Anyone else bet on this stock, and if so when are you planning on selling?





Up again today


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Offline0xYg3n
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Re: Stock Update for March 12, 2009 - WFC, GE, MO, VZ [Re: Chespirito]
    #9989402 - 03/17/09 03:35 PM (14 years, 10 months ago)

:birthday:


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InvisibleStonehenge
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Re: Stock Update for March 12, 2009 - WFC, GE, MO, VZ [Re: 0xYg3n]
    #9989515 - 03/17/09 03:49 PM (14 years, 10 months ago)

Well, I ended up making over $3800 today so that wipes out yesterday as well as friday with a tasty profit overall of about 2,000 for the last several days. Before that, we had our bull run and I did very well last week. This here stock market thing looks like fun.

If options look complicated, which they are, then derivatives must be even harder. But the way I look at it, the more complex the situation the more likely it is that the stupid money will be easy to pick up. I just have to be sure I'm not part of the stupid money.

When you own stock, you can write or sell options on it. This gives you an alternative to selling the stock or going short. If you think the stock will go down, you can write a call and that gives you a shot at the upside while limiting your downside losses. In the example I gave before, You had a stock going up, it's approaching 13 and you'd like to cash in. Like Geo's selling off of part of his holdings. He doesn't sell all of them so he is of two minds on the subject. If he sold the call option he would realize a premium.

Lets take wfc which he sold some at 14.50. If he had instead written an option and sold a contract, he would have gotten 55 cents for a march call option. On one contract, that's $55. Oh btw, wfc went up to 14.66 at close today. So by selling that option, he is obligated to sell 100 shares at the strike price of 15 which I used for this example. If wfc goes to 16 by friday, which is the day the option expires, he is forced to sell those 100 shares for 15. Oh dear! but, he did this when wfc was at 14.66 so he is making a profit of an additional .34 plus the .55 from the option premium. That's $89 in (additional) cold hard cash he made and he was planning to sell at 14.50. By staying in and selling the option instead, he had a shot at the upside.

Now what if the stock drops? Then you dump it and get out. Lets say tomorrow it drops to 14.25 and he says "curse you stonehenge for making me lose money on this" So he sells the stock at a loss of 14.50 he would have gotten minus the 14.25 he did get and loses .25. But, he gets to keep that 55 cent premium and therefore makes $30 on the trade more than selling at 14.50. So he makes money if it goes up or if it goes down. Sounds good to me. And if it goes sideways and ends up back at 14.66 or something close? Then he keeps the premium of $55 and still can shoot for the upside. He might sell another option and start over.

The april option on that stock is selling for 95 cents a share. He can make close to a buck and lock in even more profits. What if it goes to 20, doesn't he lose out on that profit? Yes he would so you don't do this unless you believe it will drop or stay the same. But he would lock in a 95 cent profit per share plus the profit of selling at 15 which is the strike price in this example.


--------------------
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835)

Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755


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Offline0xYg3n
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Re: Stock Update for March 12, 2009 - WFC, GE, MO, VZ [Re: Stonehenge]
    #9989660 - 03/17/09 04:02 PM (14 years, 10 months ago)

:goose:



:irish:


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InvisibleSuperD
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Re: Stock Update for March 12, 2009 - WFC, GE, MO, VZ [Re: 0xYg3n]
    #9993889 - 03/18/09 09:16 AM (14 years, 10 months ago)

I feel that I made the right choice when I bought 500 shares of Citigroup.  It's up again today from $2.60 to ~3.15 currently.  It appears they aren't in as big of financial trouble as many thought they were so I went in for the kill and bought a ton of shares @ $2.05.  Thus far it's paying off well.


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:super:D
Manoa said:
I need to stop spending all my money on plants and take up a cheaper hobby, like heroin. :lol:

Looking for Rauhocereus riosaniensis seeds or live specimen(s), :pm: me if you have any for trade


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Re: Stock Update for March 12, 2009 - WFC, GE, MO, VZ [Re: SuperD]
    #9994865 - 03/18/09 12:52 PM (14 years, 10 months ago)

:uptosomething:


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InvisibleChespirito
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Re: Stock Update for March 12, 2009 - WFC, GE, MO, VZ [Re: 0xYg3n]
    #9994938 - 03/18/09 01:07 PM (14 years, 10 months ago)

my god man, citi is now at 1.30!  So crazy, Im just waiting for it to start its tumble, but what if this shit just returns to its previous price over time?  Im watching it closely, if it starts to drop too much Im selling immediately


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OfflineYrat
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Re: Stock Update for March 12, 2009 - WFC, GE, MO, VZ [Re: 0xYg3n]
    #9994939 - 03/18/09 01:07 PM (14 years, 10 months ago)

why are you filling this thread with meaningless posts?


--------------------
"There are a thousand hacking at the branches of evil
to one who is striking at the root."
-Henry David Thoreau
Strike The Root


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OfflinegeokillsA
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Stock Update for March 18, 2009 - WFC, GE, SSO, MRO, TBT [Re: geokills]
    #9995323 - 03/18/09 02:05 PM (14 years, 10 months ago)

Huge news from the Federal Reserve today.  Not that their target funds rate remains unchanged at 0 - 0.25%, but that they plan to buy up to $300 billion of Treasuries over the next six months, as well as an additional $750 billion agency MBS and $100 billion in agency debt this year.  This is akin to the Fed hitting the panic button and throwing massive amounts of liquidity firepower in order to reflate the economy.  While this has the markets spiking higher, it also indicates an ever more formidable inflation threat looming on the horizon; as well as the potential debasement of our currency including very severe political tensions that could lead to war.  These actions also obscure true price discovery in the bond market.

The immediate take away here is the positive affect toward higher prices for commodities (gold and oil in particular).  Closed end funds that hold agency MBS bonds may are also be looking good here, which includes my current position in Hatteras Financial (HTS).

I did not see this coming and had been selling off positions all throughout the day.  I still maintain that taking something off the table here is a very good idea, given that we have reached an upside objective of 800 on the S&P 500 (its 50-day moving average).  While underinvested funds may start to scramble into the market on this Fed news propelling it higher, I am taking the conservative approach that I am comfortable with, and reducing my exposure.  The negatives I noted toward the end of my introductory paragraph could result in negativity brewing overnight, however those threats are still a ways off, and may not play into the near-term trading landscape as strongly as the knee-jerk reaction this afternoon may indicate.  In so far as currency debasement is concerned, the rest of the world is also in pain - so relatively speaking, we may be alright.  Not a great scenario, but better than the worst!


  • Wells Fargo (WFC) - Sold 50 shares @ $15.50

    Wells Fargo continues to show strong gains, and is in fact now $1 higher than it was when I made this sale earlier today.  Nevertheless, I will not begrudge a profit better than 34% in a week's time, and I certainly do not wish to overstay my welcome.  The banking index (BKX) is right up against resistance at its 50 day moving average, and while I admit that the continued positive news flow and largely underinvested populous may turn this moving average into support, I have solid gains here and am booking my profits.  I would like to add WFC back to my portfolio at $12.



  • General Electric (GE) - Sold 200 shares @ $10.10

    Likewise, GE has shown an impressive run and I am up over 16% on the position.  I am therefore taking the majority of this position off the table.  I am mindful that the market can continue to run after today's Fed announcement, and that the intrinsic value of GE's industrial division sits around $11 - $12 a share; so it is plain to see that the stock can continue to work higher.  But I will maintain my discipline and play it safe by booking these rapid fire gains.  If I miss out on a few extra points, no big deal.  I'd rather look forward to a weekend free from the excess stress of being so fully invested after such a huge run!



  • Ultra S&P500 ProShares (SSO) - Sold 111 shares @ $19

    This one is also ending the day about 5% higher than where I sold earlier in the day, but I will not begrudge the 6% gain I squeezed out on this trade.  This leveraged index ETF returns two times the movement of the S&P 500, and now that we are at the 50 day moving average and have reached the significant 800 level on the S&P, I will let go of this position and look to buy back these shares on a pull back.



  • Marathon Oil (MRO) - Sold 35 shares @ $24.50

    As big as the Fed news was, I now wish I would have held on to these shares.  This morning, I thought that oil might be looking a little short-term toppy, which is why I shed a little bit of this position (since I also hold a second position in the sector via BP in both my discretionary and retirement portfolios).  Alas, the Fed announcement caught almost everyone by surprise and as a result Marathon will likely continue to post gains as we move forward.  I will look to add to this position below $23 if I can.



  • UltraShort 20yr+ US Treasuries (TBT) - Stopped out of my position at $44

    This one really stung!  Because of the Fed's announcement that they will be expanding their balance sheet to stock up on Treasuries, my UltraShort position on the long US Treasury bonds was absolutely crushed as soon as the announcement hit the wires.  This sale was automatically triggered in order to stop out any potential losses (so I didn't lose any money on this trade). Nevertheless the fund did bounce back after the extreme selling that followed the announcement.  I would like to buy back this position at $40 if possible.


Discretionary Portfolio as of 3/18/2009:
  • 34.4% Cash
  • 10.2% Altria (MO)
  • 9.5% WalMart (WMT)
  • 8.9% Kinder Morgan Energy Partners (KMP)
  • 4.6% iShares FTSE/Xinhua China 25 Fund (FXI)
  • 4.4% Nordic American Tanker (NAT)
  • 4.0% BP plc (BP)
  • 3.7% Gilead Sciences (GILD)
  • 3.7% Powershares QQQ Trust [Nasdaq 100 Equiv] (QQQQ)
  • 3.7% Celgene (CELG)
  • 3.4% Hatteras Financial (HTS)
  • 3.3% Pepsico (PEP)
  • 3.1% Marathon Oil (MRO)
  • 2.5% JPMorgan (JPM)
  • 0.9% General Electric (GE)


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OfflinegeokillsA
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Re: Stock Update for March 18, 2009 - WFC, GE, SSO, MRO, TBT [Re: geokills]
    #9995466 - 03/18/09 02:24 PM (14 years, 10 months ago)

Oh and by the way...

If you have a mortgage at a rate higher than 5%, you should make the call to refinance right now.
Today's actions by the Fed are essentially allowing for across the board 4% mortgages.


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Re: Stock Update for March 18, 2009 - WFC, GE, SSO, MRO, TBT [Re: geokills]
    #9995545 - 03/18/09 02:34 PM (14 years, 10 months ago)

So you sold all your wfc stock? Nothing wrong with taking a profit but it closed the day at 17.22. If you had sold a call on 1 contract, you would have gotten 15 for all of it plus the 55 cent premium. As it turned out, selling a put would have been the better play but selling the call would have made you more money than what you did. Easy to say after the fact. Hindsight is always 20 20.

Gold dipped into your range and below today but at the end, went way up. I was tempted to sell my silver as it tanked but it ended up so no worries. I think silver, gold and other commodities will go up.

I had a good solid day, can't complain. I agree about the inflation threat which is why I took some money out of the bank and put it into stocks recently. I've already made over 5 years interest at cd rates and it's only been a week since I put most of it in.

Look for the cost of everything to go shooting up in the next couple of years. Not limited to that, probably will keep on for a longer time depending on what they do to rein in inflation. Right now, deflation is the worry. Deflation can accelerate and pull itself along. People hold off on buying because they figure prices will go down. Lots of financial experts are starting to say the same thing about the coming inflation. Put your money in commodities or stock and let it sit. I'm convinced that frequent buying and selling is counter productive.

I agree that posts should be on topic.


--------------------
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835)

Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755


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OfflineYrat
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Re: Stock Update for March 18, 2009 - WFC, GE, SSO, MRO, TBT [Re: Stonehenge]
    #9995800 - 03/18/09 03:12 PM (14 years, 10 months ago)

i'd be wary of trying to hedge against inflation using stock.  i agree that prices should rise accordingly, and thus your holdings should not be hit by inflation, but such rises give the illusion of gains and prosperity, a very slippery slope.

in fact, if you plot the price of the DOW over rates of inflation the DIJA has been crashing since the early '90s :eek:


--------------------
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to one who is striking at the root."
-Henry David Thoreau
Strike The Root


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OfflinegeokillsA
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Understanding personal style and risk tolerance [Re: Stonehenge]
    #9997351 - 03/18/09 07:53 PM (14 years, 10 months ago)

Quote:

Stonehenge said:

So you sold all your wfc stock? Nothing wrong with taking a profit but it closed the day at 17.22. If you had sold a call on 1 contract, you would have gotten 15 for all of it plus the 55 cent premium. As it turned out, selling a put would have been the better play but selling the call would have made you more money than what you did. Easy to say after the fact. Hindsight is always 20 20.




I'm well aware that WFC closed higher, in no small part thanks to the Fed anouncement.  My ask at $15.50 was posted well in advance of the Fed announcement.  As for options, that's just not something I am comfortable with yet.  One thing that's very important for any new investor to learn, is the discipline of keeping with your own style.  Try to avoid piggy backing on someone else, and make sure you understand your own personal risk tolerance.  If you stray from your style by implementing new strategies before you've really gotten a handle on what you're doing, sure you may get lucky and make a few extra bucks, but more often than not (and I've learned this through my own experience) you'll end up burned.

Likewise, the reason I made so many sales today was because I set a clear risk/reward target a couple of weeks ago, stating openly that as the S&P 500 neared 800, I would be trimming several of my positions.  I am fully aware that there could be more profit to be had, but discipline trumps conviction so far as I'm concerned.  I recognize my risk tolerance, and as the stocks I was actively selling today had shown me the gains I was shooting for (with the exception of my stop-out on the TBT), I maintained my discipline and sold.

In short, I have no problem giving up additional gains in order to avoid the stress from the added risk of holding stocks that have already met my targets.  Stressing over every tick in my portfolio and beating myself up for not having caught an extra 5 or 10% is simply not worth it for me.  I understand my style and my tolerance for risk, and I will maintain this discipline in efforts to keep me from being washed out at any point in the future.

PS.  One thing that would help me, and that I need to incorporate more frequently into my strategy, is the use of trailing sell stops.  If I would have placed a trailing sell stop on my position in WFC rather than a limit order, I likely would still be holding the shares as they worked higher.  Live and learn.


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InvisibleStonehenge
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Re: Understanding personal style and risk tolerance [Re: geokills]
    #10000611 - 03/19/09 12:04 PM (14 years, 10 months ago)

Good tip on the trailing stop, Geo. That's another way to lock in profits. The way I look at it, the market is bound to go up so grabbing a quick profit and ducking out may mean you are done with that stock if you are waiting for it to dip back down. There will be others going up but why not stay with a winner? Just a matter of preference, I suppose. As for me, I try to keep learning new things.

A trick I learned recently is how to buy stocks at a discount. This is one of the many tricks used by insiders and savvy investors. Lets say you were looking at a stock selling at $20 and think it might be a good deal but would like to pick up 100 shares at a cheaper price. Wouldn't we all? I'm going to explain how to get that stock for less than 18 and the only other choice they will have is to give you money to go away. Yes, those will be the only two options. You either get it for the price you dictate or go away with a locked in profit. It's legal and you don't need millions of dollars to pull it off.

The way you do it is you sell a put option at 18. You could pick a lower number but your chances of succeeding go down and the reward you walk away with goes down the greedier you get. A put option gives the buyer the right to sell you that stock for the strike price which is 18 in this case. You are obligated to buy it for that price. For selling this option you get a premium. Lets say the premium is 1.20 for next month's put option. There are two things that can happen. They exercise the option and you buy it for 18 and keep the premium or they don't exercise it and you keep the premium.

If the stock goes down below 18 they will surely exercise and you will get the stock for that price and since you keep the premium, it really costs you 16.80. You were going to buy it for 20 so this is much better. If the stock goes up or stays about the same, they don't exercise and you are 1.20 ahead on 100 shares or $120 to the good in real money and have no risk at that point.

Sounds too good to be true? There are a few downsides but they can be managed. One downside is that if it goes up, you do not share in the profit except for the premium. Many will say that's fine with them. Give me that profit every time. The other downside is if it goes way down, you still have to pay 18 for it and it may go below where you are coming out ahead. It may go to 10 and you have to pay 18. You can protect yourself by buying back the option soon as it goes down, lets say soon as it hits 18.50 or below. It will cost you more to buy it back than you got originally because as it drops toward it's strike price, the value goes up. But, as it gets closer to expiration the value tends to drop since there is less time for things to happen.

Options lose value as they get closer to expiration. Would you rather buy a put or call with a month to go that is $2 away from the strike price or one that has 6 months to go? Anything can happen in 6 months but it's far less likely to produce big swings in one month. So options have time value which depends on the time remaining. They may have intrinsic value if they are in the money. If you buy a call, which gives you the right to buy a stock, at the strike price of 22 and it goes to 23, it has what they call intrinsic value. You could buy at 22 and sell right away at 23 giving you a locked in profit of $1. So that option would be worth at least 1 plus whatever time value it had left. A put that was below the strike price also has intrinsic value. If you buy a put at 18 and it goes to 16, it has intrinsic value of 2 plus time value.

Lets look at the 3 possible outcomes of the trade I mentioned involving selling a put at 18 when the stock was at 20. It could go up in which case you make the premium. It could stay the same or go down to but not below the strike price. You keep the premium and have a chance to buy the stock cheaper. It could go way down and you would want to buy back the option which would cost you something over and above the premium of the option you sold. There are no risk free trades but this one is fairly safe. If you had bought the stock at 20 and it went way down, you would lose a whole lot more than selling the option and buying it back.

If you buy back your option at 18 to limit the downside when it drops near 18, you might have to pay 2 for it and get credit for the 1.20 which means you lose .80 on your play. But if you had bought at 20 and it drops to 18, you lose 2 dollars a share. So if it drops to 18 you lose 80 cents but now have the opportunity to buy it at 18 which is cheaper than the 20 you were thinking about paying. If you wanted to buy the stock, it's kind of a no brainer but you do need to watch it. You can do a trailing stop type of loss limiting on options as Geo told you about stocks.

In order to do this type of play, you need permission to deal in options which requires a disclosure form to be submitted and usually they want you to have a margin account. You also should want to buy the underlying stock. If you have no desire to buy the stock, it's a riskier play because some times you will end up having to buy it.


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“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835)

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