Investment BS Thread - Stocks/Futures/Mutual Funds/Bonds/Commodities/Options/ETFs/401ks/Etc

I don't short...I do puts...but not on ETF's that are disappearing...
https://finance.yahoo.com/news/credit-suisse-ag-announces-intent-121500618.html


The only issue with your Buy and sell calls is a big price drop...You buy at $20, Sell the $22 and then the shares drop to $16....You have to close your contracts before you can sell your stocks so you need a very hands on exit strategy for drops....When I was doing this with DIS, selling the calls...I would also hold a way out of the money put for the call...Like $80 put when the shares are at $120...just in case...Well I guess you could be level 3...and then you don't have to maintain coverage for the calls...

But that's a nice haul for a few keystrokes....I try and explain the value of the calls to others but the gloss over and think they'll never understand...It was tough today because I was chasing the ask with the CMRE $6 JUL calls...They were showing $0.40 so I put in a sell @ $0.38 and it suddenly went to $0.35...so I put in a $0.35 and the bid fell to $0.325...So then I put in $0.30 and it fell to $0.20...I don't know what kind of shenanigans were going on but I said F@$% this...and just sold 500 share on the next bump.

 

Here's the only issue I have with that...Unless you have a particular affinity for VLO...you're better off with NRGU (In my opinion) because VLO is one of the 10 assets that comprise NRGU.
https://www.zacks.com/funds/etf/NRGU/holding

So if VLO is 10% of NRGU. It's recovery or downfall with be magnified 3x by NRGU. Generally the 10 oil companies flow together when there is no individual reason for poor performance other than the covid extravaganza....None of the big 10 in general are going to fare any better or worse than the others...But one will do the best and one will do the worst. You have a 1:10 chance of picking the best....and a 1:10 chance of picking the worst. 5 of the stocks will under perform and 5 will over perform compared to each other. When you invest in NRGU you take the guessing out of deciding which is the best choice. It's almost like diversifying your portfolio with the added benefit of 3x leverage...at the leading edge of a potential huge recovery for energy. 100 shares of VLO is $5,800 right now. That's ~1,525 shares of NRGU. If VLO is $58 today and was $74 on June 8....NRGU was $7.98 in June 8. So if you estimate for a similar recovery over the next month...That $5,800 goes up $1,600 to $7400..NRGU would be 1,525 x $7.98 = $12,169.50...a difference of $4,769.50...or $4769.5/1600=2.98 and what do you know..the 3x leveraged fund has 3x the return over the same period

 

but everyday those underlying assets go down, it throws off the nrgu recovery. To get back to 8, those underlying assets need to be higher than they were last time it got to 8. And any down day means they have to go even higher to get nrgu to reach 8. It would take 5 consecutive days of the underlying assets increasing 5% a day to get to 8. At that point, xom for example would be $2 a share more than it was when nrgu was at 8 last time. Any day that goes down, increases that gap.

 

Ouch just checked today. But also just deposited my entire paycheck and will buy all NRGU. I’m averaged in at $5.29 right now with 2000+ shares

 

That’s classified

 

The 5 calls on my play account expire July 2. Of the 20 in my IRA 10 expire Friday and the other 10 expire July 17th. For these to lose value they would have to drop below $16.43 in 15 trading days. The 75m contact for their vaccine injection device is signed. Hedge funds are snapping up huge chunks of INO stock. The chances of that drop occurring are slim. I do actually research shit before I spend 50k on a series of trades. lol

As far as chasing your tail trying to unload stock goes, ask me about WLL and MFA one day. At this rate it's going to be 5 years of me writing covered calls before I cover my losses. lol

 

I’m not in it, I was quoting someone. I am watching it and rooting for you guys though.

 

It's also about buying power. XOM is $45 a share. If you have $500 you can buy 11 shares of XOM. Or you can buy 128 shared of NRGU. XOM Goes up $2 you make $22. Again, because the big 10 mirror each other in general, $2 is 4.4%. That means NRGU would grow by 13.2% or from $3.80 to $4.3016 ($0.5016) x 128 shares is $64.2 nearly 3x the return. I realize people are hung up on the amplification of the negative days but we are not in a normal market. The market doesn't continue to fall...it will rise again (unlike the south) I presently challenge you to show me a recovery pattern for the market whereby the Big 10 stocks recover to pre-covid share prices and NRGU doesn't beat that return.

The decay of ETF's has its real impact on steady markets. Where the underlying assets have little days up...little days down...The big dip we just took is going to recover. By buying in on the dips I will amplify my gains over the 10 underlying assets....
Now lets say it's 9 months from now and the oil stocks are back to a general equilibrium...That's when you get out. That's why I was getting out of NAIL...The underlying assets had returned to pre-covid #s...Oil stocks are down 20% right now just form June 8th, let alone the 40 to 45% they are down from pre-covid. NRGU is primed to take advantage of a slow and steady recovery. I just want to be an investor who doesn't miss out on that. I'm always ready to punch out when I get a nice recovery and because of the leverage, if I do happen to get out when it's over $6 and then hits $8 again and I put a stop in at $7....if it hits $7 and sells I can still get back in for less shares if it goes to $8 and still enjoy the benefits of the leveraged returns over the Big 10 shares...

 

depends on the game. He mentioned dividends. The fund fees and no dividends on nrgu means it’s not the best thing for a long term hold. And it’s a leveraged etn so not the best for a long (loooong) term hold. If I was in for the dividends I’d probably spread throughout the underlying funds now and hold on for the ride and get dividends plus a principal. The etn though is just principal no dividends. More principal but 20 years down the road being diversified in XOM VLO etc will pay off more with the dividends. All depends on the strategy.

you crazy SOB. But more power to ya.

speaking of the dividend game...


At least futures are flat so far. I’m hoping my prediction still stands. We have one down day out of the way and a hell of a day it was. All up or level from here minus two more down days. Unfortunately I predicted likely two will be back to back. So. Hold onto your britches (and if I’m right I’ll probably crap myself).


.......anyone ride HTZ they went up 28% today.

 

That's some good information and definitely more thought than I put into when I bought. I've been watching VLO for a couple years since I did some work at one of their sites. They seem to recover faster than XOM (which I have in my retirement account) and I had wanted in when they were in the 50's. I'll probably get out of VLO if it gets back close to 70, then try to keep some NRGU for the big run up.
Reading the articles and the video posted on leveraged funds they are probably not good long term holds, I would consider VLO and XOM good long term holds.
I'm just using my Corona money to dabble in some taxable and try to learn a few things along the way.

 

This is 100% correct. I am gambling here...but with more certainty than red or black in roulette...I'm fairly confident that NRGU will grow over the next year and then as it settles I get out and switch over to underlying assets with dividends..I pulled money out of big stocks like DIS to put money into NRGU because it's upside potential is huge compared to nearly every other purchase in the market right now...The only other potential big returns still available in my mind are DFEN (I also own) and DPST (3x leveraged banks. It's beaten like a Indians fan....)

If NRGU could get to $10-15 in a year I would be very content to get out as it stabilizes and starts to suffer decay.

 

Pretty sure these guys are not near retirement like me lol.

 

The maximum return right now to 52 week highs puts nrgu at 20. That’s 11-12 consecutive days of 5% increase in underlying assets, and puts those assets right around 52 week high. Each day that those assets go down reduces the value of nrgu if they get to those levels. Even 15 seems unlikely if you try to figure out how it could get there

 

Yes, but recalculate for a $0.05 increase every day until they get to their pre-covid...You could come up with ridiculous numbers. XOM was like $80 and is at $44 now. That's 36 dollars...or 720 increases of $0.05. That translates to $0.15 for NRGU x 720 increments....$108, and that's without compounding the daily $0.05 % into the returns...then your in the $130's...Now that's not realistic, but it shows you it's more important that the BIG 10 recover slow and steady for the greatest possible benefit. I think it's going to take a year for the BIG 10 to recover to pre-covid and as they do NRGU recovers at a greater and more significant rate. Yes the downs are magnified as well, but again, the down we suffered to get to where we are was astronomical and literally impossible to repeat dollar for dollar...For comparison, the drop we suffered today was 17%. That would be an $8.50 share price drop pre-covid...instead it was $0.80...We're dealing with abnormally suppressed market assets...

 

Or me...I could be days away from a new lifestyle...

 

But nrgu doesn’t go up .15 cents when xom goes up .05 cents. It goes up 15% when xom goes up 5%. 15% of 3.9 isn’t very much, so it takes a lot to get nrgu up

 

yes, but the BIG 10 mirror each other. It's not like XOM goes up and the others all go down. The respond in kind to oil economics. Since February no single BIG 10 stock has fluctuated as an outlier. They have all followed each other. It's my contention that this pattern will continue. As XOM goes up so would the other 9 assets. Take a look at this 5 month chart. They are decatuplets (I just made that up I think, the 10 twins)

 

That's every trade ever made. Don't let anyone tell you different. You can research a trade and do everything right. CEO gets convicted of fraud and your due diligence means nothing. Can't predict life or the market. But you can do your best. Like most of us try too.

 

Thats why I’m basing it off of xom, because they all go up 5%, then nrgu goes 15%. But the longer it takes, the worse it gets for nrgu. If xom goes up 5%, and down 5% the next day, it retains a higher percentage of its value than nrgu does going up 15% and then down 15%. So every down day makes it harder for nrgu to catch up. I’m just saying I’d get out at 6 before trying to hang on until 10. Unless of course there is actually good news that sustains the markets. But then it makes sense to get back in at 8, get those 15% returns on days when they are worth more

 

Wow that’s some interesting analysis on NRGU.

Here’s my thought process for buying NRGU: