The Stock Market

[HSFBfan]

@DarterBlue

Remember you asked about what wpuld happen to NYC real estate 

https://www.cnbc.com/amp/2020/07/09/empty-manhattan-apartments-reach-record-levels-landlords-slash-rent.html

[FootballGuy]

For all my fellow options traders, I would take a look at Amazon. Had a very good payout today. 

[DarterBlue]

Today was another volatile day. However, unlike Wednesday, when stocks rallied on the afternoon to close broadly higher, today stocks closed mostly lower. Volume increased slightly on both the NYSE and NASDAQ. At the day’s close, the range was from a gain of .82% on the NASDAQ 100, which reflected strength in the technology sector with a bias towards the large companies, to a loss of 2% in the Russell 2000, reflecting weakness in secondary stocks. Losing stocks led by margins of 2.6-1 on the NYSE and 11.5-5 on the NASDAQ. The negative breadth was a reflection of the weakness in the secondary stocks. The action was not healthy. Overall weakness on higher volume never is. Also, the failure of the broad market to confirm the NASDAQ’s strength is not good either. For now, the bull market lives. But it is showing clear signs of being tired. Covid-19 probably has something to do with this, as new cases are consistently in the 50,000+ range, and for the third day in a row, there are signs that the death rate is starting to rise. This will surely hamper the Administration’s efforts to get the economy rolling again.

 On a personal note, I ended the day down $2,283, or .4%. I outperformed the other indices, but underperformed the NASDAQ. This makes sense. My NASDAQ type issues, SHOP, ZM, and TTD were all up on the day. SHOP by a decent amount. My fourth NASDAQ type, TEAM ended essentially flat after making a new higher earlier in the day. On the other hand, my gains were offset by large losses in LCII, the S&P Options and the MDY. LOW, my latest purchase, like TEAM also ended essentially flat. For the week, despite lots of daily volatility, I go into Friday up about $1,700 which if that held would be my lowest weekly change (positive or negative), since I reentered the market on April 7. Given the questionable action recently which has no doubt been influenced by negative Covid-19 news, I am forced to watch both the market and my positions like a hawk. Hopefully, we get some calming news and the market can pick up where it left off on June 10.

 

 

[DarterBlue]

1 hour ago, HSFBfan said:

@DarterBlue

Remember you asked about what wpuld happen to NYC real estate 

https://www.cnbc.com/amp/2020/07/09/empty-manhattan-apartments-reach-record-levels-landlords-slash-rent.html

So we are dealing with a bifurcated real estate market with strong demand outside NYC and weakness in the City that never sleeps! Rents in Manhattan were always ridiculous anyway. I remember back in the spring of 1985 my classmate and buddy rented 700 square feet of space in the Battery Park area for $2,000 per month back then because he wanted to walk to his job at Merrill Lynch. I shudder to think what that would go for today.  

[HSFBfan]

5 minutes ago, DarterBlue said:

So we are dealing with a bifurcated real estate market with strong demand outside NYC and weakness in the City that never sleeps! Rents in Manhattan were always ridiculous anyway. I remember back in the spring of 1985 my classmate and buddy rented 700 square feet of space in the Battery Park area for $2,000 per month back then because he wanted to walk to his job at Merrill Lynch. I shudder to think what that would go for today.  

More than that in terms of rent

But yes nyc market is weak. Ny and nj suburbs housing is on fire 

[HSFBfan]

22 hours ago, imaGoodBoyNow said:

@DarterBlue fuck NKLA seriously fuck them and their traders😩😫

https://www.cnbc.com/2020/07/10/rivian-ceo-scaringes-aggressive-plan-to-beat-tesla-and-nikola-with-the-first-all-electric-pickup-and-suv.html

[DarterBlue]

9 minutes ago, HSFBfan said:

https://www.cnbc.com/2020/07/10/rivian-ceo-scaringes-aggressive-plan-to-beat-tesla-and-nikola-with-the-first-all-electric-pickup-and-suv.html

These guys are following the traditional financing path. As such, it gives me greater comfort that they are for real. Niikola, the jury is out, but I am not sure I trust the CEO.

[HSFBfan]

2 minutes ago, DarterBlue said:

These guys are following the traditional financing path. As such, it gives me greater comfort that they are for real. Niikola, the jury is out, but I am not sure I trust the CEO.

Well thats good. I know I am was tired of Nikola so here's another company in that spot 

[DarterBlue]

Just now, HSFBfan said:

Well thats good. I know I am was tired of Nikola so here's another company in that spot 

Ford was a big backer of Technology companies since my days in NYC. They sponsored a venture capital fund I provided services to. The other major sponsor of that fund group was the 3M Company. 

[DarterBlue]

On a day in which there was a positive reversal to the upside, stocks closed broadly higher on lower volume across the board. It was a day in which the usual suspects, the NASDAQ types did not lead but instead followed. Whether this will become a trend or not is up in the air. But one day does not make a trend. A healthier event would be for all the major indices to participate in the uptrend. At day’ close, the range was from a gain of .66% on the NASDAQ to 1.7% on the Russell 2000. Despite underperforming, both NASDAQ indices closed at all-time highs. Leadership today was centered in secondary stocks and the banks. Technologies participation was secondary. Advancing stocks led by margins of just over 3-1 on the NYSE and 21-13 on the NASDAQ. How do I interpret the day? It was positive. In the face of skyrocketing new Covid-19 cases and a four day uptick in deaths, the market finished a positive week strongly. The reversal from negative to positive was another positive that cannot be overlooked. So far, July, which I mentioned was a positive months within the doldrums of the summer months, is off to a great start!

 On the day, I was up $5,284 or .92%. Because I am overweight technology, I underperformed the broad market. On the week, I was up $6,975 or about 1.24%, which also underperformed most of the indices. My positive performers on the day were: ZM which was very strong in the face of weak technology; the S&P Options, which closed at a week’s high; LCII, and MDY. LOW was up slightly while TTD and SHOP were down slightly. On the day, I was able to get rid of 8 of the 9 remaining FRO options for the net princely sum of $3. It looks like the final one will expire worthless next week unless the stock skyrockets. While on a relative basis I underperformed this week, I am still thankful for the gains. If this continues, I will have to make a second, larger, estimated tax payment in September. Hate this aspect of the game, but would much rather pay the taxes than have capital loss carry forwards. I am now up very nicely on my best performers quite nicely to the tune of the following: ZM = 60%, TTD = 54% and SHOP = 38%. I lost 96% on the FRO Options but only risked $1,200. So, it’s not a big deal. Onward to next week.

[HSFBfan]

https://www.businessinsider.com/robinhood-office-installed-bulletproof-glass-after-frustrated-traders-visited-report-2020-7?amp

@DarterBlue quite interesting 

[HSFBfan]

https://www.google.com/amp/s/www.politico.com/amp/news/2020/07/09/california-google-anti-trust-investigation-355710

[DarterBlue]

50 minutes ago, HSFBfan said:

https://www.businessinsider.com/robinhood-office-installed-bulletproof-glass-after-frustrated-traders-visited-report-2020-7?amp

@DarterBlue quite interesting 

It is interesting. Like I explained to @imaGoodBoyNowin an earlier post, Schwab did not give me options trading permission until I had my account for over three years. But that was in the early 1990s. Robinhood allows inexperienced traders and investors the opportunity to destroy themselves. Personally, I think it's irresponsible both on the part of Robinhood and on the part of the account holders that blow up their accounts. Before I bought any new security, I always read extensively about it at the local library. I figured, if I was going to have a  shot at winning, it was important I understood the vehicle. What most new traders don't get is that there is no reason to rush this. Good trades will always present themselves if you are discerning and patient enough to wait on them. 

[HSFBfan]

Just now, DarterBlue said:

It is interesting. Like I explained to @imaGoodBoyNowin an earlier post, Schwab did not give me options trading permission until I had my account for over three years. But that was in the early 1990s. Robinhood allows inexperienced traders and investors the opportunity to destroy themselves. Personally, I think it's irresponsible both on the part of Robinhood and on the part of the account holders that blow up their accounts. Before I bought any new security, I always read extensively about it at the local library. I figured, if I was going to have a  shot at winning, it was important I understood the vehicle. What most new traders don't get is that there is no reason to rush this. Good trades will always present themselves if you are discerning and patient enough to wait on them. 

I agree with you. Robinhood yes is good as it brings in more traders but absolutely dangerous as it brings in inexperienced traders who could absolutely destroy themselves 

[imaGoodBoyNow]

7 minutes ago, DarterBlue said:

It is interesting. Like I explained to @imaGoodBoyNowin an earlier post, Schwab did not give me options trading permission until I had my account for over three years. But that was in the early 1990s. Robinhood allows inexperienced traders and investors the opportunity to destroy themselves. Personally, I think it's irresponsible both on the part of Robinhood and on the part of the account holders that blow up their accounts. Before I bought any new security, I always read extensively about it at the local library. I figured, if I was going to have a  shot at winning, it was important I understood the vehicle. What most new traders don't get is that there is no reason to rush this. Good trades will always present themselves if you are discerning and patient enough to wait on them. 

I’m done with options for now, I got blink PSEG And some oil stock options all in November  but I don’t think adding any more 

[DarterBlue]

8 minutes ago, imaGoodBoyNow said:

I’m done with options for now, I got blink PSEG And some oil stock options all in November  but I don’t think adding any more 

The thing with options are these two things: 1. If your typical trade is $10,000 you should never put an options trade on for more than $1,000. Options trades should never be more than 1/10th of your stock trades. Why? Options trades, especially if they are in the current contract, are usually all or nothing. 2. Generally, unless you are trading around an earnings surprise, you should never go long or short the current contract. I usually go at least three months out. 

A third thing: often, the best option trade is on one of the indices. If you have a good feel for where the market is going then buy calls or puts, as the case may be on: QQQ, SPY, DIA, MDY or IWM. This avoids the blowups you sometimes have with individual stocks, while still giving you the chance to double your money or more if you are right. 

[HSFBfan]

1 minute ago, DarterBlue said:

The thing with options are these two things: 1. If your typical trade is $10,000 you should never put an options trade on for more than $1,000. Options trades should never be more than 1/10th of your stock trades. Why? Options trades, especially if they are in the current contract, are usually all or nothing. 2. Generally, unless you are trading around an earnings surprise, you should never go long or short the current contract. I usually go at least three months out. 

A third thing: often, the best option trade is on one of the indices. If you have a good feel for where the market is going then buy calls or puts, as the case may be on: QQQ, SPY, DIA, MDY or IWM. This avoids the blowups you sometimes have with individual stocks, while still giving you the chance to double your money or more if you are right. 

Honestly I wish i understood any of this 

[DarterBlue]

15 minutes ago, HSFBfan said:

Honestly I wish i understood any of this 

So, because options are more risky, you should adjust your investment to no more than 1/10th of what you would put into a stock. This probably means buying no more than a contract or two. For each 100 shares of a stock you would consider buying, you should never buy more than one contract if you go the options route. 

Options expire monthly. The current contract is the one that expires this week, which is Friday at the close of business. The only time I ever buy current contract, is if earnings come out no later than the Friday of expiration. You can make money either on puts or calls, if the stock surprised either to the downside or the upside. It is a low cost way to make money quickly from a positive or negative earnings surprise.  

[HSFBfan]

6 minutes ago, DarterBlue said:

So, because options are more risky, you should adjust your investment to no more than 1/10th of what you would put into a stock. This probably means buying no more than a contract or two. For each 100 shares of a stock you would consider buying, you should never buy more than one contract if you go the options route. 

Options expire monthly. The current contract is the one that expires this week, which is Friday at the close of business. The only time I ever buy current contract, is if earnings come out no later than the Friday of expiration. You can make money either on puts or calls, if the stock surprised either to the downside or the upside. It is a low cost way to make money quickly from a positive or negative earnings surprise.  

Ok can u break down what options are? 

I'm sorry but options to me have been very confusing 

[DarterBlue]

7 minutes ago, HSFBfan said:

Ok can u break down what options are? 

I'm sorry but options to me have been very confusing 

Sure. An option gives you the right to buy or sell a stock for a fixed price. A call option gives you the right to buy. A put option gives you the right to sell. 

Example of a call option: The September, 120, IBM Call option. This option gives you the right to buy IBM shares for $120 per share on or before the third Friday in September. IBM currently trades at $118 per share. If IBM never trades above $120 between now and the third Friday in September, and you don't close it out, this option will expire worthless at the close of business on the third Friday of September and whatever you paid for it will have gone up in smoke as it will have no value. You buy call options when you are bullish and expect the  stock to go up.

A put option is the opposite of a call option. So, in the example above if you bought the corresponding put, it would give you the right to sell IBM stock for $120. If the stock traded above $120 and you did not close the option out, then it would expire worthless on the third Friday in September. You buy calls if you are bullish and you buy puts if you are bearish. 

[HSFBfan]

Just now, DarterBlue said:

Sure. An option gives you the right to buy or sell a stock for a fixed price. A call option gives you the right to buy. A put option gives you the right to sell. 

Example of a call option: The September, 120, IBM Call option. This option gives you the right to buy IBM shares for $120 per share on or before the third Friday in September. IBM currently trades at $118 per share. If IBM never trades above $120 between now and the third Friday in September, and you don't close it out, this option will expire worthless at the close of business on the third Friday of September and whatever you paid for it will have gone up in smoke as it will have no value. You buy call options when you are bullish and expect the  stock to go up.

A put option is the opposite of a call option. So, in the example above if you bought the corresponding put, it would give you the right to sell IBM stock for $120. If the stock traded above $120 and you did not close the option out, then it would expire worthless on the third Friday in September. You buy calls if you are bullish and you buy puts if you are bearish. 

Oh ok thank you. That doesn't sound too complicated now. But I can understand where it is very risky. Since it has to be at a certain price on a certain day. I know you can make good money but way too risky for myself 

[DarterBlue]

1 minute ago, HSFBfan said:

Oh ok thank you. That doesn't sound too complicated now. But I can understand where it is very risky. Since it has to be at a certain price on a certain day. I know you can make good money but way too risky for myself 

I use options, but the options bets are relatively small and they represent no more than 5% of the dollar value of my positions at a given time. That way, if I am wrong, they don't destroy me. I will usually buy options on an index and not individual stocks. When I buy them on individual stocks, it is because of one of two things: 1. I consider the stock very risky and don't want to buy a full position preferring to take a small option position instead. 2. I think the company is going to have a very positive earnings surprise, so I buy a few call contracts to make a quick profit on the earnings surprise. 

When I am bearish on the stock market, I buy Index Put Options rather than shorting stocks or ETFs. Back in 2018 November/December I made over $50k in three and a half weeks on that kind of trade when the market tanked in December 2018 before Christmas.  

[imaGoodBoyNow]

1 minute ago, DarterBlue said:

I use options, but the options bets are relatively small and they represent no more than 5% of the dollar value of my positions at a given time. That way, if I am wrong, they don't destroy me. I will usually buy options on an index and not individual stocks. When I buy them on individual stocks, it is because of one of two things: 1. I consider the stock very risky and don't want to buy a full position preferring to take a small option position instead. 2. I think the company is going to have a very positive earnings surprise, so I buy a few call contracts to make a quick profit on the earnings surprise. 

When I am bearish on the stock market, I buy Index Put Options rather than shorting stocks or ETFs. Back in 2018 November/December I made over $50k in three and a half weeks on that kind of trade when the market tanked in December 2018 before Christmas.  

I’ve been meaning to ask you, when your up pretty big on a call , in what case do you exercise and buy the contract?

[HSFBfan]

6 minutes ago, DarterBlue said:

I use options, but the options bets are relatively small and they represent no more than 5% of the dollar value of my positions at a given time. That way, if I am wrong, they don't destroy me. I will usually buy options on an index and not individual stocks. When I buy them on individual stocks, it is because of one of two things: 1. I consider the stock very risky and don't want to buy a full position preferring to take a small option position instead. 2. I think the company is going to have a very positive earnings surprise, so I buy a few call contracts to make a quick profit on the earnings surprise. 

When I am bearish on the stock market, I buy Index Put Options rather than shorting stocks or ETFs. Back in 2018 November/December I made over $50k in three and a half weeks on that kind of trade when the market tanked in December 2018 before Christmas.  

Thank you very much

[DarterBlue]

2 minutes ago, imaGoodBoyNow said:

I’ve been meaning to ask you, when your up pretty big on a call , in what case do you exercise and buy the contract?

I never exercise unless I think the stock is a home run like Zoom Communications. I will close out the position by selling the calls to close. That way I have offsetting positions in the same option security which net to zero.