Ecuriel follow up.... (1 Viewer)

[MarkeytMaker]

I hope this don't get to complicated and I hope I don't have to follow up with too many questions because this can become a complex trading strategy to explain in real depth...but as an example and in no way am I recommending anyone to buy anything...just an example Say you buy a call option of (C) Citigroup with a strike price of $5 and an expiration date of Jan 2012 for .43 less than 10 days ago...yesterday the option could be sold for .80 (selling half here is the art of it...this leaves you with the other half free in hand)...In some cases...even more profitable would be selling the covered call as the owner of the stock rather than the investor who wants the rights to buy the stock...then you could collect a premium (rent) and "also" be rewarded with the upside difference from price paid and the set strike price...the more shares aquired of course the larger the payout...risk is price decline for the owner of the shares (the seller of the covered call)...risk for the investor (buyer of the call) is only his premium paid...of course the safer play is buying the call, because you already know that your maxium loss can only be the premium paid to the owner of the shares. One other point that should be noted is that the owner of shares selling the covered call can take a small hit on PPS (price per share) decline and expirence no loss at all because the premium collected in itself can equate to a break even scenerio.

Markey

 

[ecuriel]

I hope this don't get to complicated and I hope I don't have to follow up with too many questions because this can become a complex trading strategy to explain in real depth...but as an example and in no way am I recommending anyone to buy anything...just an example Say you buy a call option of (C) Citigroup with a strike price of $5 and an expiration date of Jan 2012 for .43 less than 10 days ago...yesterday the option could be sold for .80 (selling half here is the art of it...this leaves you with the other half free in hand)...In some cases...even more profitable would be selling the covered call as the owner of the stock rather than the investor who wants the rights to buy the stock...then you could collect a premium (rent) and "also" be rewarded with the upside difference from price paid and the set strike price...the more shares aquired of course the larger the payout...risk is price decline for the owner of the shares (the seller of the covered call)...risk for the investor (buyer of the call) is only his premium paid...of course the safer play is buying the call, because you already know that your maxium loss can only be the premium paid to the owner of the shares. One other point that should be noted is that the owner of shares selling the covered call can take a small hit on PPS (price per share) decline and expirence no loss at all because the premium collected in itself can equate to a break even scenerio.

Markey

I was just kidding. In my prior life, I was a principal in a firm that managed large institutional money. So, I am well versed in option theory. My point in the response, is that if your looking to make money, you should continue your stock trading because trading in toy soldiers is nickle and dime stuff.

 

[MarkeytMaker]

Nickles and dimes can become more fun than dollars themselves. I also enjoy with my wife garage sales and estate sales...it's the fun of it!...o.k money too!

 

[kreddy]

You weren't one of those people who bought in to "Beanie Babies" years ago, were you?

 

[MarkeytMaker]

You weren't one of those people who bought in to "Beanie Babies" years ago, were you?

O.k that's being sarcastic but...HELL NO!

 

[Njja]

Its really simple just ask Lenny Dykstra the "Options King"

I'm sure he will be glad to provide financial advice.......he just finished having

his house forclosed on, and auctioned off his 1986 world series ring!

It can be done......but its certainly not easy!

 

[MarkeytMaker]

Its really simple just ask Lenny Dykstra the "Options King"

I'm sure he will be glad to provide financial advice.......he just finished having

his house forclosed on, and auctioned off his 1986 world series ring!

It can be done......but its certainly not easy!

Market monkey got him!

 

[Njja]

I have been in the market for quite some time, and I enjoy it every day.

You have to do a lot of research, and have a lot of luck!

However you can have a good deal of fun, and do OK!

 

[Ragnar]

I have been in the market for quite some time, and I enjoy it every day.

You have to do a lot of research, and have a lot of luck!

However you can have a good deal of fun, and do OK!

Could not agree more..With a little research there are plenty of great deals to be found.
I love the ASX {Australian Stock Exchange} its my playground .

 

[Njja]

It certainly can be an interesting way to spend an afternoon!

 

[MarkeytMaker]

It certainly can be an interesting way to spend an afternoon!

If you wern't aware CNBC is the comedy channel for investors and traders...Monday stock pumping and the market as a whole...come Tuesday the market sucks...it's stagnent with now where to go but sideways...there could even be a correction here...Wednsday...wow this maket just can't be stopped...Thursday again were thinking buying here is a great opportunity...Friday, Oh no quadruple witching

 

[Njja]

I don't watch any of the Market shows on TV for exactly the reasons you mentioned. I monitor the foreign markets in the evenings, watch the after hours and pre market quotes and I have a few sights I check for breaking news.

Its just like collecting in a way, the better prepaired you are the greater the opportunity.

Its still 50% luck as in life, being in the right place at the right time with the
$$$$ in your hand.

 

[ecuriel]

I was in Institutional Investments for 25 years and The best line I ever heard was, "When you make money you are investing, when you lose money you are gambling". You have more fun in Vegas.

 

[MarkeytMaker]

I was in Institutional Investments for 25 years and The best line I ever heard was, "When you make money you are investing, when you lose money you are gambling". You have more fun in Vegas.

My own saying is you need to lose big a few times before you learn how to win big...I believe this is very very true...if you haven't lost big yet...you will!

 

[ecuriel]

My own saying is you need to lose big a few times before you learn how to win big...I believe this is very very true...if you haven't lost big yet...you will!

Unfortunatly, that logic doesn't work when you manage other peoples money. Besides, it is cheaper to learn from other peoples Big losses.

 

[Njja]

You can make more money in the market then you ever will working for someone else.

It does however require capital.

 

[ecuriel]

Really? I think if you build businesses that manage large sums of money you will be better off than trading for your own account. Just ask Warren Buffet.

 

[Njja]

Warren doesn't pay my bills, I do, so what has he got to do with my simple observation?

Investing with Warren is like investing in a mutual fund.......you are at the mercy of whoever is running the fund.

Berkshire Hathaway A (Warren's main fund) is currently the NYSE highest priced stock at $123,000 per share it pays you a yearly dividen of ZERO! It is a growth stock if you purchased it at its 52 week low of $79,000 you are quite happy......if you purchased it at its high of $140,711 you are sweating bullets.

I prefer to purchase individual companies it requires a bit more research but you know what you are holding.

I do not hold Warren in very high esteem.

 

[ecuriel]

Warren doesn't pay my bills, I do, so what has he got to do with my simple observation?

Investing with Warren is like investing in a mutual fund.......you are at the mercy of whoever is running the fund.

Berkshire Hathaway A (Warren's main fund) is currently the NYSE highest priced stock at $123,000 per share it pays you a yearly dividen of ZERO! It is a growth stock if you purchased it at its 52 week low of $79,000 you are quite happy......if you purchased it at its high of $140,711 you are sweating bullets.

I prefer to purchase individual companies it requires a bit more research but you know what you are holding.

I do not hold Warren in very high esteem.

You missed the point. If you believe that trading for your own account to pay your bills is better than building an investment company that manages billions of dollars and has made him the third richest man on the planet, your view of his esteem is meaningless.

 

[Njja]

You missed the point. If you believe that trading for your own account to pay your bills is better than building an investment company that manages billions of dollars and has made him the third richest man on the planet, your view of his esteem is meaningless.

.....................................................................................................

I missed the point I'm just making a few casual observations on the stock market.....and suddenly we are having a discussion about Warren Buffet? How exactly did that happen?

I would be more interested in your accomplishments in the market since you are engaging me in this conversation.

Your assumption that I trade to pay my bills is also incorrect. I do so to build wealth for my family, and they are all quite pleased.