imaGoodBoyNow Posted May 28, 2020 Report Share Posted May 28, 2020 8 minutes ago, DarterBlue said: You be drinking with @HSFBfan again? Dat kid crazy, you be careful. Ohh fuck no, no drinks or drugs since 2013, only Ganja and chamomile tea for this kid 1 Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted May 28, 2020 Author Report Share Posted May 28, 2020 1 hour ago, imaGoodBoyNow said: Ohh fuck no, no drinks or drugs since 2013, only Ganja and chamomile tea for this kid Thought Ganja was drugs, mon. At least that's what the law says. Is it decriminalized in NJ? Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted May 28, 2020 Report Share Posted May 28, 2020 Just now, DarterBlue said: Thought Ganja was drugs, mon. At least that's what the law says. Is it decriminalized in NJ? It’s legal in NJ if you want it to be Legal and pay the $500 license ,, it’s a joke, they set you up with a shady doctor on video chat and all you say is migraine or Anxiety bam your able to carry 3 ounces on you , the same amount someone who doesn’t have a license would do 3 years in state prison for possessing the same amount 2 Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted May 28, 2020 Report Share Posted May 28, 2020 @DarterBluewhen you have a chance later today can you post one of your famous diary posts i need a Darter Blue definition of what a call option is wtf am I looking at heres 2 examples Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted May 28, 2020 Author Report Share Posted May 28, 2020 1 hour ago, imaGoodBoyNow said: It’s legal in NJ if you want it to be Legal and pay the $500 license ,, it’s a joke, they set you up with a shady doctor on video chat and all you say is migraine or Anxiety bam your able to carry 3 ounces on you , the same amount someone who doesn’t have a license would do 3 years in state prison for possessing the same amount Guess it pays to be a shady doctor. Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted May 28, 2020 Report Share Posted May 28, 2020 10 minutes ago, DarterBlue said: Guess it pays to be a shady doctor. I don’t wanna make this thread into something else, but all I gotta say is the whole system is shady , if you can’t afford the license they put you in prison, all they want is that $$$$ they put you with some doctor who you literally make up some shot and she diagnoses you after talking with you for all about 4 minutes 1 Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted May 28, 2020 Author Report Share Posted May 28, 2020 56 minutes ago, imaGoodBoyNow said: @DarterBluewhen you have a chance later today can you post one of your famous diary posts i need a Darter Blue definition of what a call option is wtf am I looking at heres 2 examples An option, gives a speculator (can't really use the word investor), the right, but not the obligation, to buy or sell a specific security (a stock in the example I am using) for a specific price, over a specific time. Let us make up a hypothetical example. Let us take an imaginary stock, we will call it BadDarter, Inc. Let us say its price as I type this is $100 per share. So, suppose you are a small investor, with only $500 to invest, and you really like BadDarter because you think it's a quality company that's going to dominate Concha, Inc. forcing it, its sole competitor, out of the market. Well, given your limited financial situation, the highest number of shares you could buy (ignoring commissions if any), is 5. Let us say that you think BadDarter is going to trade for $200 per share within the next six months. Well if you buy the five shares, and you are right, and the bad boy goes to $200 you just made yourself (200-100)x5 = $500. Not bad for six months work. But let's say you buy the options instead. Suppose the November 2020, call options with an exercise price of $130 (the exercise price is the price the stock has to pass, before the options have intrinsic value), are currently trading at $5 (at a price of $5, each options contract would cost $500, as the options are denominated in hundred share amounts). Now if you bought 1 call option instead of the 5 shares of stock, let us see what the result would be. One contract at $5 = the right to buy 100 shares at a price of $130 = the same $500 investment. Well, in November, just before the options expire, the stock now trades at $200 because you are a genius stock picker. So, $200 - $130 = $70, which is the minimum value the option could trade at in November. $70x100 shares = $7,000. So, instead of pocketing $500 if you bought the stock, you would pocket $7,000, which is 14 times more profit for the same investment. A put is the opposite of a call. Instead of giving you the right to buy, it gives you the right to sell. Aside from that the explanation is the same. Basically, what options give you is leverage for a price. A famous market maker/trader in options once described her job as selling hope for a relatively small price. The downside to options is that for most retail traders they are an all or nothing bet that usually ends in disaster. However, if you understand them, and you respect them, they can be a very powerful tool. It helps a great deal if you have a very good facility and experience with, higher level mathematics as options can be used in all kinds of strategic trades which I won't get into in this discussion. With that said, though, though advanced (college level or post graduate level) mathematics gives you a really big edge, it is not necessary for you to employ certain options strategies profitably. First let me see if you digest what I have typed, and if you don't don't blame yourself, blame me, as options can be very complex, and I sometimes don't give the simplest explanations. If you do, and want to go further, hit me with follow up questions and we can dig deeper into the world of derivatives. 1 Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted May 28, 2020 Report Share Posted May 28, 2020 Thanks let go grab. Coffee from DD before I try to Decipher what you just said 1 Quote Link to comment Share on other sites More sharing options...
Troll Posted May 28, 2020 Report Share Posted May 28, 2020 3 hours ago, imaGoodBoyNow said: Thanks let go grab. Coffee from DD before I try to Decipher what you just said Dude...options are just poker at the big boy table... It's a betting game of where a stock 'will be' in the future... the two variables time and price is what you are reading.... the dates are how far out with the betting, price gains are calls, price losses are puts. HERE's THE THING THO....... You play the MARKET, and you play WITH the crowd..... You play OPTIONS, and you are playing AGAINST the other PLAYERS...(generally proffessionals) Options are a ZERO sum game where money is made ONLY when someone else loses money, as opposed to stocks where everyone gains or loses together.... Markets get manipulated, mostly on the options side which flows downstream to every other area.... this due to hard dates being assigned to when all the 'option bets' need to be cashed out....(👈NOTE TO 66) You want options, the best way to win the option game is "bankroll".......you gonna be playin' shortstacked.... just sayin' Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted May 28, 2020 Author Report Share Posted May 28, 2020 26 minutes ago, Troll said: Options are a ZERO sum game where money is made ONLY when someone else loses money, as opposed to stocks where everyone gains or loses together.... The above is not necessarily true. Some of the best money I have made in the markets is fading the other participants. 26 minutes ago, Troll said: You want options, the best way to win the option game is "bankroll".......you gonna be playin' shortstacked... Please explain what you mean here. Quote Link to comment Share on other sites More sharing options...
Troll Posted May 28, 2020 Report Share Posted May 28, 2020 59 minutes ago, DarterBlue said: The above is not necessarily true. <<<A professional's spin I take it? Some of the best money I have made in the markets is fading the other participants. <<in options the money comes from the other participants....some other 'bet' MUST LOSE for another to win... Please explain what you mean here. <<see below With enough bankroll or a small enough stock (to where one has ability to 'move' a stock price) you are a big enough fish to be able to force the others off the board with your bankroll....pretty much same as poker, you are a sucker waiting when short stacked. Surely I don't need to explain this to any professional...... It's not easy to explain how a professional poker entire table can naturally work against the sucker...no words are even needed...when everyone knows what they are doing....come to Atlantic City sometime...better to see it than explain it... big fish eat little fish... Now feel free to argue that's not how it works "MOST" of the time....you are 100% correct... Same thing at the poker table... Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted May 28, 2020 Author Report Share Posted May 28, 2020 1 hour ago, Troll said: You play the MARKET, and you play WITH the crowd..... You play OPTIONS, and you are playing AGAINST the other PLAYERS...(generally proffessionals) Options are a ZERO sum game where money is made ONLY when someone else loses money, as opposed to stocks where everyone gains or loses together.... 1. When you play the market you do not necessarily play WITH the crowd. No trader worth his or her salt does this. Now it is true that with an expanding economy leading to new money coming into the market, all other things being equal, the markets will tend to rise over time thus resulting in a so called win, win situation as everyone benefits from the upward trend. But not all financial markets or economies conform to this. I would cite the recent case of Japan which topped out in December 1989 and is still way under where it topped out then. Does this mean that a skilled trader could not have make a killing trading stocks in Japan over ensuing 31 years? Of course not. But general market participants would have had horrible returns even with dollar cost averaging. In many respects, the October 1929 through 1946 in the USA was also similar to the contemporary Japanese experience. It took a long time for the US's equity markets to finally bottom and move on to new all-time highs. 2. See 1. Everyone only gains and loses together if everyone is a passive participant. The gains come in healthy economic times or times of expansionary monetary policy. I have found avoiding the large losses that bear markets bring put you way ahead of the average participant. In many market situations, I would also argue that to an extent, stocks can also be a zero sum game. You just have to look at different scenarios. The USA to a great degree, has been immune to such (most of the time). And that makes sense given its rise to world supremacy. But this in no way indicates that past performance is indicative of the future. It may or may not be depending on our politics and economic policies going forward. Quote Link to comment Share on other sites More sharing options...
Troll Posted May 28, 2020 Report Share Posted May 28, 2020 1 minute ago, DarterBlue said: 1. When you play the market you do not necessarily play WITH the crowd. No trader worth his or her salt does this. Yes I certainly agree with that......which could also be phrased as... you mean no trader worth their salt just buys long, and holds.... (playing WITH the crowd) They (those professionals) will work 'against' the crowd any way they can.....as to increase profit... options are one of the easiest way to do that.... Leverage exponentially multiplies just what exactly?....(how about any difference in bankrolls 👀) Just sayin' PS: the rest was all good too... BTW: not sure, but are you really trying to debate that the sharks DON'T hang out in the option's room??? 🤷♂️ Quote Link to comment Share on other sites More sharing options...
Troll Posted May 28, 2020 Report Share Posted May 28, 2020 1 hour ago, DarterBlue said: Some of the best money I have made in the markets is fading the other participants. On the bright side.... THE BEST strategy (for a short stack player) is to have your money follow the "large stack" player's bets..... (with all other variables being equal) Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted May 28, 2020 Report Share Posted May 28, 2020 Sooo @DarterBlue what’s up with taxes on your investments, I read you have to have your stocks for one year before you see them or the interest on taxes are gonna be way higher Quote Link to comment Share on other sites More sharing options...
Troll Posted May 28, 2020 Report Share Posted May 28, 2020 19 minutes ago, imaGoodBoyNow said: Sooo @DarterBlue what’s up with taxes on your investments, I read you have to have your stocks for one year before you see them or the interest on taxes are gonna be way higher I know... but since you didn't ask me....... 🤷♂️ 😝 Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted May 28, 2020 Report Share Posted May 28, 2020 Sooo @Troll what’s up with taxes on your investments, I read you have to have your stocks for one year before you see them or the interest on taxes are gonna be way higher 1 Quote Link to comment Share on other sites More sharing options...
Troll Posted May 28, 2020 Report Share Posted May 28, 2020 Just now, imaGoodBoyNow said: Sooo @Troll what’s up with taxes on your investments, I read you have to have your stocks for one year before you see them or the interest on taxes are gonna be way higher 🤣 From my experience (everyone's is obviously different for taxes) the taxes are usually nominal when compared to movements in the stocks.....as in I wouldn't let taxes be any 'priority' when deciding trades.... It's always good around Nov-Dec to review everything you got, and selling off losers prior to tax year end is a common strategy which can help alot in reducing any tax burden. But many people pinching pennies figure they have to 'hold' a position 'just a couple more months' can lose big.... From my view it just tends to muddy the waters to alter your thoughts on good buys or sells too much, to try and pinch pennies..... But I have no issue deferring to Darter on his thoughts on the market, He has always been fairly spot on with the market knowledge 👍, wonder if he feels the same? 1 Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted May 28, 2020 Author Report Share Posted May 28, 2020 Stocks closed broadly lower after staging a negative reversal day. However, volume which had been low all day did not pick up significantly during the late selloff. Stocks topped shortly after 2 pm when they were at the peak and the selling accelerated in the final hour. At the close the range was from a loss of .27% on the NASDAQ 100 to 2.48% on the Russell. Unlike Tuesday and Wednesday, when the averages were led by cyclical stocks and by secondary issues in the Russell and S&P Mid Cap index, today the best performers were the NASDAQ larger capitalization technology issues. For a reversal day, it was not alarming. First, volume did not pick up; second, the market was and is overbought, so a pullback is expected and is considered healthy; finally, despite the negative close, the internals were not particularly bad as losing stocks only led by margins of 17-12 and 21-11 on the NYSE and NASDAQ, respectively. At worst, I think we could see a mild pullback and at best, we could just pick up where we left off Tuesday and continue higher. Even with the day’s losses, the NASDAQ is still within hailing distance of new all-time highs and the odds favor we get there within the next two weeks. On a personal note, despite the broad weakness, I was actually up on the day. Both stocks, TTD and ZM closed higher, as did the S&P call options. How could the calls close higher when the S&P lost ground closing down .2% on the day? There are two factors at play. First, there are commonly thought to be six factors that influence options prices. One of them is the implied volatility. As measured by the VIX, implied volatility was higher today. In other words, traders were willing to pay more for right to buy options separate from any intrinsic value embedded in the option. Second, is the fact that final options pricing for the day occurs fifteen minutes after the 4 pm close, as the options market is open for that fifteen minute period. Well, futures on the S&P were mildly higher at the end of that fifteen minute period and this is reflected in the options price. A final comment. Yesterday, I sold LLY and took the loss. Well today, it was a stellar performer closing up almost $5, or well over 3%. Thus, if I had held it, I would have had a banner day. Do I regret the sale? No, it reached my uncle point, so I did what any risk respecting trader does. I sold it. Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted May 28, 2020 Author Report Share Posted May 28, 2020 2 hours ago, Troll said: BTW: not sure, but are you really trying to debate that the sharks DON'T hang out in the option's room??? 🤷♂️ Not at all. Options by their nature attract professionals both because of the leverage in them, and also because they are amenable to many strategies that a sophisticated investor/trader can use to enhance profits. Now does that mean a small player cannot use them to his advantage? My answer would be absolutely not. I have used options for years and am much more than net profitable on the totality of my options trades. But, I use them carefully. The goal is not to make all or nothing bets on the contracts nearest expiration and to wait till implied volatility overall and in the issue that interests me is relatively low. For a beginning user of options, my advice would be thus. If you objectively fancy yourself as a better than average stock picker, you can enhance your returns by buying options three to six months from expiration. Yes, these cost more money. But they also preserve more time value and give your stocks a really good chance to run. The simple example I provided @imaGoodBoyNow in response to his question illustrates this. The trick is to not overload on them due to their relatively cheap price relative to the stock. Beginners have the bad habit of buying the current month's expiration and to compound the problem, buy out of the money strikes. I would submit that unless you have access to good, insider information (which BTW is illegal), doing this with consistency is generally a recipe for disaster. There is one exception to this that can work. If you are very good at shifting through estimated earnings and know how to find the issues that consistently beat expectations, buying very small options positions on stocks days before they report earnings using the current expiration, can be very profitable. But in this instance you are, hopefully, placing educated, well thought out bets, on an imminent event. 1 Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted May 28, 2020 Author Report Share Posted May 28, 2020 2 hours ago, imaGoodBoyNow said: Sooo @DarterBlue what’s up with taxes on your investments, I read you have to have your stocks for one year before you see them or the interest on taxes are gonna be way higher I would not pay attention to the difference in tax rates too much. If you can trade consistently well, pay the higher rate and don't sweat it. Back in the day, you could go short against the box to lock in your your short term gains without paying the taxes till you closed the two positions after qualifying for long term status. But the IRS closed that loophole. If you are just days away from meeting the time threshold for the lower rate of taxes, then by all means try and hold the positions if the market is acting calmly. However, if you are several months away, you may give up all your gains if market conditions deteriorate. Which would you rather do: pay taxes on your winnings? Or would you rather deduct $3,000 of capital losses against ordinary income? The answer is obvious. Go with the profits every time. Losses, by definition are bad. But to risk having gains turn to losses because you want to pay 10% less in taxes is bad and stupid. The point I am making is: follow your strategy. If you get a sell signal, obey it. F the taxes. Don't hang on to something when its time has past. PS, if you want to use tax minimization strategies, do so once you have accumulated wealth and do it with your longer term savings and investment money. Not with your trading account. 2 Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted May 29, 2020 Report Share Posted May 29, 2020 Care to explain who the fuxk these Greeks are? Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted May 29, 2020 Author Report Share Posted May 29, 2020 5 minutes ago, imaGoodBoyNow said: Care to explain who the fuxk these Greeks are? Delta, etc.? I am going to send you a link to an article that explains the basics of options pretty well in my next post. Gotta hunt it down first. 1 Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted May 29, 2020 Author Report Share Posted May 29, 2020 https://www.optionseducation.org/optionsoverview/options-pricing Read this first, then type the Greeks in google and read what comes up. Quote Link to comment Share on other sites More sharing options...
Troll Posted May 29, 2020 Report Share Posted May 29, 2020 1 hour ago, DarterBlue said: For a beginning user of options, my advice would be thus. If you objectively fancy yourself as a better than average stock picker, you can enhance your returns by buying options three to six months from expiration. Yes, these cost more money. But they also preserve more time value and give your stocks a really good chance to run. Good advise right there......👆 I might even go as far as to say beginners should be buying 12 months out and selling by the end of your window at 2-3 months out if they were planning on being on that 'safer' side..... (of course that is when your picks are solid) LOL at those 'suckers' who are 'all in' with their short stack in the last month...😰 2 Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.