Official Let's Make Some Money Off Stocks Thread
08-27-2008, 05:01 PM
#761
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Originally Posted by Khoa,Aug 27 2008, 02:17 PM
congrats on your gain. i basically have positions in tech, financial, and speculative stocks which i shouldn't have mess with. it's like everything i touch decreases in value. i bought WB on the rebounce at 18 and some change and got slammed.
08-27-2008, 05:48 PM
#762
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Originally Posted by PearlwhiteS2k,Aug 27 2008, 04:52 PM
Erik quick question. How much will it cost me to buy 100-200 AAPL options?
08-27-2008, 06:09 PM
#763
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Someone asked me about not being able to buy options even though they filled out the option trading agreement. It's something some of you will run into so here is the answer:
You must have a margin account
When you apply for option trading privileges you must also apply to change your cash trading account to a margin account.
In-the-money options require enough available margin to exercise them. Out-of-the-money options don't require available margin but if they go in-the-money your broker will lay an egg and give you a margin call which normally means that unless you sell something to bring your margin back in line or they will do it for you.
Keep that in mind. If you buy in-the-money options you'll only be able to buy as many as your margin allows even if you have enough cash in the account to buy more.
You must have a margin account
When you apply for option trading privileges you must also apply to change your cash trading account to a margin account.
In-the-money options require enough available margin to exercise them. Out-of-the-money options don't require available margin but if they go in-the-money your broker will lay an egg and give you a margin call which normally means that unless you sell something to bring your margin back in line or they will do it for you.
Keep that in mind. If you buy in-the-money options you'll only be able to buy as many as your margin allows even if you have enough cash in the account to buy more.
08-27-2008, 06:37 PM
#764
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Boring energy stocks cratered lately, just like financials did before them. I had a small % of my 401K money in an AIM Energy fund and it got crushed, still in negative territory on the year. So don't be all smiles about recommending boring stocks. They don't always work either! Sure they're coming back but I'm getting out of that fund on this hurricane bounce.
We've had a bear market. If you had ANY sort of diversification you wouldn't be up 30% this year. Yes I'm a touch bitter so at least don't make it sound easy...
We've had a bear market. If you had ANY sort of diversification you wouldn't be up 30% this year. Yes I'm a touch bitter so at least don't make it sound easy...
08-27-2008, 09:18 PM
#766
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It is worthwhile to realize that the market did suffer a large contraction as a whole. Nothing has really escaped over the past year as a broad sector. The average joe is down 20+% and scared $hitless I'm sure.
As great as diversification is, it can also kill your returns if used incorrectly. A better definition for people who actively manage their money would be don't put all your eggs in one basket. Diversification often influences people to put money in dying sectors or stocks they are unfamiliar with 'just because' and ironically feel good while doing it.
Nobody, and I mean nobody, in the active money management business doesn't at least take 50% of a poorly performing sector off the table if that trend is expected to continue.
This is why it's difficult for me to discuss investing with people that aren't at least moderately knowledgeable. Because of my job/education I get asked almost daily but unless you are willing to put in work and research your risk* large losses.
Losses are behind you. It's impossible to get them back by dwelling on them. Write down 5-10 things you learned from these mistakes and stick them on your wall next to your comp if you want but end it there.
If the worst that happens during your investing career is you were down 30% once as a newb, you are in excellent shape. Most people I know, including smart ones, have lost 50% at one point or another whether it be 2000, 87, or the S&L fiasco. Many of these individuals are also fantastic investors and wealthy because of it. Losses as a newbie investor are probably the most valuable thing that can happen to you. As soon as you think you have the hang of it or get overconfident, that's when the real risk appears.
Lastly, here is something to always remind yourself of before you enter a speculative trade-by john mauldin
"Risk is not a knob you turn in order to get higher gains"
Put that one on your wall right next to 'hope is not a strategy'
As great as diversification is, it can also kill your returns if used incorrectly. A better definition for people who actively manage their money would be don't put all your eggs in one basket. Diversification often influences people to put money in dying sectors or stocks they are unfamiliar with 'just because' and ironically feel good while doing it.
Nobody, and I mean nobody, in the active money management business doesn't at least take 50% of a poorly performing sector off the table if that trend is expected to continue.
This is why it's difficult for me to discuss investing with people that aren't at least moderately knowledgeable. Because of my job/education I get asked almost daily but unless you are willing to put in work and research your risk* large losses.
Losses are behind you. It's impossible to get them back by dwelling on them. Write down 5-10 things you learned from these mistakes and stick them on your wall next to your comp if you want but end it there.
If the worst that happens during your investing career is you were down 30% once as a newb, you are in excellent shape. Most people I know, including smart ones, have lost 50% at one point or another whether it be 2000, 87, or the S&L fiasco. Many of these individuals are also fantastic investors and wealthy because of it. Losses as a newbie investor are probably the most valuable thing that can happen to you. As soon as you think you have the hang of it or get overconfident, that's when the real risk appears.
Lastly, here is something to always remind yourself of before you enter a speculative trade-by john mauldin
"Risk is not a knob you turn in order to get higher gains"
Put that one on your wall right next to 'hope is not a strategy'
08-28-2008, 08:42 AM
#770
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Be glad you aren't trading crude -- intraday range $6.42 / bbl. Now down 2.83 based on "strong dollar" while there's a hurricane headed for production platforms in theGulf of Mexico. Stupid stupid market.