OFFICIAL STOCK MARKET & ECONOMY THREAD VOL. SCHOOL'S OUT

[lilchico4life]

I'm watching GFG like a hawk. Possible buyout or FDIC takeover. This can go either way.

 

[banks2pierce]

kicksfiend: you should look great with those october/december puts. I am putting all of my capital into december puts, and I plan on making a pretty penny offof that. You could've killed the market in the last year if you see the bigger picture: this is clearly a bull rally within a much bigger bear market. Thislooks pretty impulsive, but I don't think it's the big daddy yet.

I was planning on picking up my puts in Sept/Oct. but I have been long since 900. Looks like I should've taken profit, but thought upside could've beenmuch higher. I still think we can get 1100 s&p.

And forget 100-200%. You can make thousands of % if you nail options. You definitely have to put in a little time to learn them and the greeks, but it's agreat way to get a ton of leverage when you are very confident about something. Can screw you in sideways times or if you guess wrong, but pick a good monthand you're ok.

My strategy for the fall in the fall is to pick up a decent amount of spec OTM puts and of course, closer TM puts. Not messing with individual stocks, but KMPisn't a bad choice.

 

[finnns2003]

looks like shorters are going to have a lot of fun for the 2nd half of '09. need to build my capital...

 

[andycrazn]

lame..... i gotta get my options approved

 

[lilchico4life]

^ You can't trade options if you have a stock only account on Scottrade. I really suggest you stick to one thing though. With options, you really have toknow which way the market is going. But it is great for folks that lack the capital to day trade.

 

[kicksfiend]

Originally Posted by nicefro

Originally Posted by kicksfiend

reigndrop wrote:

---

Market's toast, have fun shorting this market in the next few months boys.

Shorting's great but people need to look into options. You can make more than 100% return on a downward movement with options (not possible with shorting).
I have orders in for 100s of puts waiting to be filled this morning. I've been slowly piling all my capital into them. I'm trying to triple my trading
account this fall.

You can definitely make more than 100% return shorting on downward movements. If you short 650,000 C shares at $3.96 for a $2,574,000 gain, covering your short at $1.39 at a cost of $903,500 would net you a profit of $1,670,500 which is 184.89% profit on your initial investment of $903,500.






Maybe I'm misunderstanding something, but my logic is as follows:
If you short a stock, you immediately profit off the value you earn from selling the stock. Then you buy back the stock at a lower price (assuming the pricefalls). There is no initial capital used. An example of this would be shorting SPY at 102 and after it falls, buying it back for 51. In that case, you earned102 times X amount of shares minus the cost of buying the X amount of shares back at a lower price. So say you bought 100, you make 10,200 initially and thenspend 5,100 buying it back, leaving you with a profit of 5,100. In that case, you made a 50 percent profit off the stock declining in value by 50 percent. Nowif SPY fell to 0, you'd make a 100 percent profit because you keep 100% of what you sold it for.

Someone correct me if I'm wrong.

Originally Posted by andycrazn

Originally Posted by kicksfiend

reigndrop wrote:

---

Market's toast, have fun shorting this market in the next few months boys.

Shorting's great but people need to look into options. You can make more than 100% return on a downward movement with options (not possible with shorting).
I have orders in for 100s of puts waiting to be filled this morning. I've been slowly piling all my capital into them. I'm trying to triple my trading
account this fall.

gonna try it out then. getting puts on fas and calls on faz




DON'T BUY PUTS JUST BECAUSE SOMEONE ON A SNEAKER WEBSITE TOLD YOU TO. Obviously you needto do more research into options before you start trading them. I won't claim to be an expert (yet). Options are something I've been looking into andI've begun implementing them because of a specific investment strategy I've decided to use. Although I suggested them, it does not mean you should jumpin head first. Do research and if you understand the risks/rewards, then invest in them. However I will say this, I decided against buying SSO and SDS optionsafter having difficulty figuring out what price of SSO/SDS correlates to a specific value on the S&P. I'm sure others could back me up on sayingleveraged ETFs like FAZ/FAS/SSO/SDS tend suffer from daily rebalancing and degradation of value, something that makes options on them riskier than you'dthink. I know that sounds contradictory since I just put money into an ETF but it's my money so I do what I want.

That being said, before getting into options DO YOUR OWN RESEARCH. I suggest you NOT try it out until you gain a better understanding of what you'redoing.

Originally Posted by Banks2Pierce

kicksfiend: you should look great with those october/december puts. I am putting all of my capital into december puts, and I plan on making a pretty penny off of that. You could've killed the market in the last year if you see the bigger picture: this is clearly a bull rally within a much bigger bear market. This looks pretty impulsive, but I don't think it's the big daddy yet.

I was planning on picking up my puts in Sept/Oct. but I have been long since 900. Looks like I should've taken profit, but thought upside could've been much higher. I still think we can get 1100 s&p.

And forget 100-200%. You can make thousands of % if you nail options. You definitely have to put in a little time to learn them and the greeks, but it's a great way to get a ton of leverage when you are very confident about something. Can screw you in sideways times or if you guess wrong, but pick a good month and you're ok.

My strategy for the fall in the fall is to pick up a decent amount of spec OTM puts and of course, closer TM puts. Not messing with individual stocks, but KMP isn't a bad choice.

I'm currently holding onto a mixture of calls and puts (with a bias towards puts). I'm certain that the market will make a significant movement by theend of the year. However, this movement (although I believe it will be bearish) may be bullish. In the off chance it is, I won't lose my shirt thanks tothe calls I have. However, I stand to profit far greater off the puts. I won't list the specific calls/puts I've bought but it's basically a stripstraddle heavily biased towards the downside.

 

[nicefro]

Originally Posted by kicksfiend

Originally Posted by nicefro

You can definitely make more than 100% return shorting on downward movements. If you short 650,000 C shares at $3.96 for a $2,574,000 gain, covering your short at $1.39 at a cost of $903,500 would net you a profit of $1,670,500 which is 184.89% profit on your initial investment of $903,500.

Maybe I'm misunderstanding something, but my logic is as follows:
If you short a stock, you immediately profit off the value you earn from selling the stock. Then you buy back the stock at a lower price (assuming the price falls). There is no initial capital used. An example of this would be shorting SPY at 102 and after it falls, buying it back for 51. In that case, you earned 102 times X amount of shares minus the cost of buying the X amount of shares back at a lower price. So say you bought 100, you make 10,200 initially and then spend 5,100 buying it back, leaving you with a profit of 5,100. In that case, you made a 50 percent profit off the stock declining in value by 50 percent. Now if SPY fell to 0, you'd make a 100 percent profit because you keep 100% of what you sold it for.

Someone correct me if I'm wrong.

No because you could use the same logic to say that if you buy 500 shares for $5 and sold them for $12, your profit would be your sale price of$6000 - your initial investment of $2500 = $3500 and because $3500/$6000 = 58.3%, your profit would be 58.3% when infact it would be 171.43%.

I think.

 

[andycrazn]

Originally Posted by nicefro

Originally Posted by kicksfiend

Originally Posted by nicefro

You can definitely make more than 100% return shorting on downward movements. If you short 650,000 C shares at $3.96 for a $2,574,000 gain, covering your short at $1.39 at a cost of $903,500 would net you a profit of $1,670,500 which is 184.89% profit on your initial investment of $903,500.

Maybe I'm misunderstanding something, but my logic is as follows:
If you short a stock, you immediately profit off the value you earn from selling the stock. Then you buy back the stock at a lower price (assuming the price falls). There is no initial capital used. An example of this would be shorting SPY at 102 and after it falls, buying it back for 51. In that case, you earned 102 times X amount of shares minus the cost of buying the X amount of shares back at a lower price. So say you bought 100, you make 10,200 initially and then spend 5,100 buying it back, leaving you with a profit of 5,100. In that case, you made a 50 percent profit off the stock declining in value by 50 percent. Now if SPY fell to 0, you'd make a 100 percent profit because you keep 100% of what you sold it for.

Someone correct me if I'm wrong.

No because you could use the same logic to say that if you buy 500 shares for $5 and sold them for $12, your profit would be your sale price of $6000 - your initial investment of $2500 = $3500 and because $3500/$6000 = 58.3%, your profit would be 58.3% when in fact it would be 171.43%.

I think.

kickfiends right because you cant go over 100% on a short. you can do that only when your losing but the maximum is 100% on profit, infinite onlosses.

kicksfiend: since leveraged etfs suffer from decay in value shouldnt the best choice to buy puts?

 

[ieternalv]

Originally Posted by LiLcHiCo4LiFe

I'm watching GFG like a hawk. Possible buyout or FDIC takeover. This can go either way.

This is dropping hard, i have a feeling there will be a lot of money to be made if the buyout happens.

 

[reigndrop]

Originally Posted by andycrazn

Originally Posted by kicksfiend

Originally Posted by reigndrop

Market's toast, have fun shorting this market in the next few months boys.

Shorting's great but people need to look into options. You can make more than 100% return on a downward movement with options (not possible with shorting). I have orders in for 100s of puts waiting to be filled this morning. I've been slowly piling all my capital into them. I'm trying to triple my trading account this fall.

gonna try it out then. getting puts on fas and calls on faz

You're better off buying puts and calls on SPY, fall back from the fas and faz garbage. SPY options have very little volatility priced in,once the VIX spikes, you'll earn premium, when you faz and fas puts/calls, there's a lot of volatility already priced into it.

 

[reigndrop]

Originally Posted by kicksfiend

Originally Posted by reigndrop

Market's toast, have fun shorting this market in the next few months boys.

Shorting's great but people need to look into options. You can make more than 100% return on a downward movement with options (not possible with shorting). I have orders in for 100s of puts waiting to be filled this morning. I've been slowly piling all my capital into them. I'm trying to triple my trading account this fall.

Oh we have a little market mover here haha. Buy puts is exactly what I'm doing. Volatility is low, options are cheap.

 

[reigndrop]

Originally Posted by nicefro

Originally Posted by kicksfiend

Originally Posted by reigndrop

Market's toast, have fun shorting this market in the next few months boys.

Shorting's great but people need to look into options. You can make more than 100% return on a downward movement with options (not possible with shorting). I have orders in for 100s of puts waiting to be filled this morning. I've been slowly piling all my capital into them. I'm trying to triple my trading account this fall.

You can definitely make more than 100% return shorting on downward movements. If you short 650,000 C shares at $3.96 for a $2,574,000 gain, covering your short at $1.39 at a cost of $903,500 would net you a profit of $1,670,500 which is 184.89% profit on your initial investment of $903,500.

You make no sense, it's impossible to have a >100% profit on a short. The only way to do so is by levering up.

 

[reigndrop]

Originally Posted by wawaweewa

Commodities being hit hard. USD up. China's market is going to shed big seeing as it's been up around 85% and the Chinese are cooking their numbers.

I don't think this is the move down (historically those come in the fall- late Sept/Oct) but it should ride down as low as around 945 which is the 50 dma. 50% retracement from current highs to mid July lows is also around the mid o low 940's.
It really depends on how the USD moves. Much of the run up in the market has been due to USD weakness.

A lot of ellioticians see a stronger dollar coming soon, I'm gonna say I have to agree, it'll also help the markets move lower.

 

[reigndrop]

Originally Posted by andycrazn

Originally Posted by nicefro

Originally Posted by kicksfiend

Originally Posted by nicefro

You can definitely make more than 100% return shorting on downward movements. If you short 650,000 C shares at $3.96 for a $2,574,000 gain, covering your short at $1.39 at a cost of $903,500 would net you a profit of $1,670,500 which is 184.89% profit on your initial investment of $903,500.

Maybe I'm misunderstanding something, but my logic is as follows:
If you short a stock, you immediately profit off the value you earn from selling the stock. Then you buy back the stock at a lower price (assuming the price falls). There is no initial capital used. An example of this would be shorting SPY at 102 and after it falls, buying it back for 51. In that case, you earned 102 times X amount of shares minus the cost of buying the X amount of shares back at a lower price. So say you bought 100, you make 10,200 initially and then spend 5,100 buying it back, leaving you with a profit of 5,100. In that case, you made a 50 percent profit off the stock declining in value by 50 percent. Now if SPY fell to 0, you'd make a 100 percent profit because you keep 100% of what you sold it for.

Someone correct me if I'm wrong.

No because you could use the same logic to say that if you buy 500 shares for $5 and sold them for $12, your profit would be your sale price of $6000 - your initial investment of $2500 = $3500 and because $3500/$6000 = 58.3%, your profit would be 58.3% when in fact it would be 171.43%.

I think.

kickfiends right because you cant go over 100% on a short. you can do that only when your losing but the maximum is 100% on profit, infinite on losses.

kicksfiend: since leveraged etfs suffer from decay in value shouldnt the best choice to buy puts?

Yes, but how far of timeline do you want to go out? At some point, the theta premium will too much that it won't even be a worthwhileinvestment.

 

[lilchico4life]

Originally Posted by iEternalv

Originally Posted by LiLcHiCo4LiFe

I'm watching GFG like a hawk. Possible buyout or FDIC takeover. This can go either way.

This is dropping hard, i have a feeling there will be a lot of money to be made if the buyout happens.

Yes that's true. From what I've been reading, most likely they'll be selling off the assets leaving shareholders with nothing.

 

[lilchico4life]

I'm liking this...

S&P futures vs fair value: -8.10.
Nasdaq futures vs fair value: -18.30

 

[teddy jam]

ctic up 7% ..woo hoo

 

[throwedindagame]

Originally Posted by teddy jam

ctic up 7% ..woo hoo

Yeah, I might double my position

 

[nicefro]

About to set an order for CTIC @ 1.66

 

[nicefro]

MFA had a nice bullish engulfing yesterday.

 

[teddy jam]

CTIC up 12%

insiders perhaps know it's gona get approvied?

 

[ieternalv]

ctic on its way to approval this weekend...hopefully.

i hope you have all joined me in riding the rocket-ship to $3+

 

[ieternalv]

Originally Posted by teddy jam

CTIC up 12%

insiders perhaps know it's gona get approvied?

i don't think it's insider information...i forgot the dates, but i believe approval/non-approval date was supposed to fall sometime near saturday.
i think today we have the outside possibility to break $2, and there will probably be a sell off tomorrow. but don't take my word for it.

 

[ieternalv]

in other news...i wish i got into GFG yesterday.

 

[teddy jam]

Cell Therapeutics, Inc.(NasdaqCM: CTIC)
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