Play the Markets Contest is Up!

a1bion · Post by **a1bion** » Mon Mar 17, 2008 5:15 pm

Commissions are a little high IMO. $60 for three trades? Come on, $7 a trade damnit!

That's expensive compared to something like an eTrade. Pretty cheap, though, if you use a full service broker.

a1bion · Post by **a1bion** » Mon Mar 17, 2008 5:35 pm

I've gone in now and changed the settings for commissions charged. They are all now $7 a trade.

I also upped the diversification option. It won't let me take it higher than 1% of the portfolio per position, but it still gives you more leeway to run.

radbag · Post by **radbag** » Mon Mar 17, 2008 7:23 pm

i think we should have weekly/monthly/quarterly/annual winners...maybe mod for the month or something....maybe the forum gets named after you for the month/quarter/year.

apexgator · Post by **apexgator** » Tue Mar 18, 2008 8:47 am

^^^ or you all just pay me my gains in real funds.

IHateUGAlyDawgs · Post by **IHateUGAlyDawgs** » Tue Mar 18, 2008 8:51 am

I put in two transactions last night assuming they wouldn't go through until this morning...this morning I saw they were still pending - now it says for those two "Security Not Trading"...WTF does that mean and why did that happen?

Also, WTF is an "Option" and how does that work? I want to diversify this stuff but I don't know what the hell I'm doing.

radbag · Post by **radbag** » Tue Mar 18, 2008 9:02 am

think of option as the 'right' to buy or sell at a specified price at a later date.

buying the right to buy at a later date ... buy calls ... bullish strategy ... costs money to put the position on
selling the right to buy at a later date ... sell calls ... bearish strategy ... income producer; you get paid to put the position on
buying the right to sell at a later date ... buy puts ... bearish strategy ... costs money to put the position on
selling the right to sell at a later date ... sell puts ... bearish strategy ... income producer; you get paid to put the position on

IHateUGAlyDawgs · Post by **IHateUGAlyDawgs** » Tue Mar 18, 2008 9:07 am

so If I think the stock is going to tank, then I either sell the right to buy or buy the right to sell. What's the difference between the two? In other words, when do I use one strategy as opposed to another? Is it just a matter of preference?

TheTodd · Post by **TheTodd** » Tue Mar 18, 2008 9:12 am

One of them pays you, the sell, and one of them you have to pay, the buy. That's the main difference.

IHateUGAlyDawgs · Post by **IHateUGAlyDawgs** » Tue Mar 18, 2008 9:14 am

what are the consequences for missing?

TheTodd · Post by **TheTodd** » Tue Mar 18, 2008 9:19 am

losing your money. Say the price goes up when you were expecting it to go down. You now might have to buy the stock at a higher price you sold it at depending on the date agreed upon or if a call comes through on your PUT.

radbag · Post by **radbag** » Tue Mar 18, 2008 9:24 am

One of them pays you, the sell, and one of them you have to pay, the buy. That's the main difference.

correct toddy.

one is revenue producing, the other one is not
one is a credit, the other one is not

IHateUGAlyDawgs · Post by **IHateUGAlyDawgs** » Tue Mar 18, 2008 9:26 am

despite my lack of knowledge, I'm up $103 so far this morning...

I'm going to "follow" you investors...that way I can keep tabs on how you're doing.

radbag · Post by **radbag** » Tue Mar 18, 2008 9:40 am

losing your money. Say the price goes up when you were expecting it to go down. You now might have to buy the stock at a higher price you sold it at depending on the date agreed upon or if a call comes through on your PUT.

correctamundo once again toddy...you should go get your license bro! [img]{SMILIES_PATH}/icon_smile.gif[/img]

the liabilities in buying calls or puts is the cost of the "right" to buy or sell (option) on the initial get go...this is called your premium...premiums vary depending on your future price that you have the "right" to buy or sell at...that future price is called your "strike price"...as the strike price moves higher/lower from the current price of the stock, you will note that the premium gets cheaper/expensive...depending on the strategy (put or call)...you OWN the right to buy or sell the stock at the strike price, it has cost you some money for the right to do so, you have the right to "exercise" those rights if it is lucrative to do so obviously...if it is not, you let them expire worthless and you're liability is merely the premiums you've paid

the liabilities in selling calls or puts are a bit different...primarily, you do not have the power to exercise nor do you have to say in just walking away from a worthless option...if it's worthless from your perspective, it is worthy to your counterparty....the BUYER...the one who OWNS the right to buy or sell at the strike price...since you are the seller, you are obligated to buy or sell (determined if it is a call or put) to the EXERCISER at the stated strike price....so you can imagine, if you are the seller of a call (bearish strategy), you've received premiums for selling the contract, you do not own the stock, stock rises to infiniti, you are on the hook to sell the stock at wherever the strike price is (let's say 50 bucks) to the buyer of the call option (who has obviously exercised the option) and since you do not own the stock, you have to buy it in the open market...the stock now costs infiniti...you are FUCKED...selling calls uncovered is considered to be the MOST riskiest option strategy out there...covered would mean that you own the stock to begin with...this is less risky as you are already long the position and there is no need for you to go out into the market to buy the stock.

make sense?

IHateUGAlyDawgs · Post by **IHateUGAlyDawgs** » Tue Mar 18, 2008 10:01 am

I'm up almost $600 today.

TheTodd · Post by **TheTodd** » Tue Mar 18, 2008 10:05 am

We'll rad, finance has never been a strong suit of mine but I have a decent understanding of it. I do have a bizness degree and all so I did take a few finance courses in school. But when I came to the cross roads after school of either working for the IRS as a seasonal tax helper or having a job as a tech for AOL, I became a techie instead of a finance guru.

radbag · Post by **radbag** » Tue Mar 18, 2008 10:10 am

I'm up almost $600 today.

the percentages (up or down) mean more to me than the nominal amount up or down.

if i'm a prospective customer and you are a prospective money manager, i'd like to know how much better (or worse) of a return you can provide me relative to other money managers, indices, funds, etc...

radbag · Post by **radbag** » Tue Mar 18, 2008 10:10 am

^^^and sustainability too.

TheTodd · Post by **TheTodd** » Tue Mar 18, 2008 10:13 am

IHate, you want your funds to outperform the major stock indexes like the S&P 500, the Dow Jones Industrial Average, etc. So if the S&P gained 7% and you gained 9% and did this over a three year period, you're good. Right now (past year) the S&P sucks so bad it wouldn't be difficult.

IHateUGAlyDawgs · Post by **IHateUGAlyDawgs** » Tue Mar 18, 2008 10:16 am

where do I see that info?

TheTodd · Post by **TheTodd** » Tue Mar 18, 2008 10:20 am

Take your percentage change, for example mine is +4.38% for today. Now go look at Yahoo Finance or something like that and lookup the S&P http://finance.yahoo.com/q/bc?s=%5EGSPC&t=1d for today and it is up 2.49%. So I am beating the S&P at this point.

radbag · Post by **radbag** » Tue Mar 18, 2008 10:23 am

^^^ this is called relative value ^^^

judging the value of something versus the value of another.

IHateUGAlyDawgs · Post by **IHateUGAlyDawgs** » Tue Mar 18, 2008 10:27 am

OK, I just wasn't sure if there was somewhere to see the Index % Change w/o having to leave the site.

a1bion · Post by **a1bion** » Tue Mar 18, 2008 10:44 am

I'm down in part because I wasn't able to get in and hit the mental downside stops I was keeping on two of my orders. The long call side of my straddle is up so I'm going to hold that and close it probably later today. Market's volatile enough I may hold the long put and close it on a down day.

IHateUGAlyDawgs · Post by **IHateUGAlyDawgs** » Tue Mar 18, 2008 10:50 am

I'm up, right around percentage wise of the S&P according to Todd's post, but I've got a short on Crocs that is killing me right now.

a1bion · Post by **a1bion** » Tue Mar 18, 2008 10:53 am

I put in two transactions last night assuming they wouldn't go through until this morning...this morning I saw they were still pending - now it says for those two "Security Not Trading"...WTF does that mean and why did that happen?

There's a twenty minute delay on the orders and the prices shown, so you need to build that into your plan when you set up a trade. The delay on orders seems to be longer if you hit something that's trading heavy. I've gotten that "Security Not Trading" message three times now, trying to hit volatility plays, and have gotten burned all three times on my fill price because of it. Quirk to the system that you have to learn to account for.