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

Toyota: "So I heard everyone wanted a different drivetrain for the Tundra..."

Everyone: *hopes for a diesel*

Toyota: "Introducing the All Electric Toyota Tundra!"

Everyone:

 

Lyft looking crazy

IPO $72
Spike $78
Today $61
All in two weeks

 

Reminds me of APRN. I bought at 10 during the IPO and sold at 7 within just a week or two. 30% loss that fast was too much to stomach. I think I only had a couple hundred in it, thankfully. Lesson learned. APRN is now sub $1. (Just checked, it's $1.10 now )

 

Don't forget, when it first went public, wasn't it like $89 or something for a trader to buy it? Those are the people getting screwed.

 

Same people who bought SNAP and Bitcoin at the top. Haha

 

Anyone considering SHLDQ (sears ) after Eddy Lambert ran it into the ground and bought it for a song ? I think this was a plan to get it for nothing and then bring it back and reap a huge gain .

 

Retail is dying

 

Briefly- because I am nostalgic but remember they sold off all their best assets. Craftsman, Discover card, etc. Not sure what the could build a retail niche back out of.

 

The bid for Sears hometown is what made me wonder . It may allow them to sell appliances and Craftsman tools . Heavy stuff that cannot be shipped or returned easily . Lambert has made money all along by loans to failing sears .

 

For anyone who knows options:

Assume I have 100 shares of T that I am willing to risk having to sell. If I sell a covered call with a strike price of $34 for April 26 for $0.05, does that mean I get $0.05 per share, so $5.00 as soon as I sell that call? And if it doesn’t reach $34 I get to keep the $5.00? If it does, I have to sell my shares, but still keep the $5.00?

Is that about how this works? I want to learn to generate income with options, just a little is fine if the risk isn’t too high. I just can’t wrap my head around how it all works.

 

I'm not sure how to look at all the financials of companies to see how good an investment Sears hometown is. but not many people are going to order a lawn mower, refrigerator or mattress from Amazon. That's pretty much all they have at the couple Sears hometowns I've been to.

 

I would also like a option learning group, so many types of calls and puts its hard to understand how they all work, covered called is like hedging your own shares?

From what i know if "your in the money" then you would have to exercise the option and if below the strike price then they expire worthless

 

That is what I’m wondering. If you sell a covered call, and it expires worthless, you pocket the premium and then can do it again?

 

me today:

 

Is this the late 90's all over again? I really didn't think so, but now that these unprofitable companies are going public with huge valuations, I have to wonder. I hope they all tank like they all should have during the tech bubble!

 

I'm on the fence about this business. They seem to provide large enterprises with turn key software solutions. They still are operating at a loss (which is quite considerable). I don't understand how a SaaS company even has a loss.. how much overheard does a software company have?

 

yes

 

Options are priced x100. So .05 X 100 = $5.00.

If the option reaches strike price the options purchaser has the OPTION to purchase the shares at the strike price. You have to sell them, then you lose whatever gain/loss could have happened over that period. Think of it like the buyer of a call wants to buy the shares at a "discount" and will pay a premium for the ability to do so. If the strike price is not reached, the buyer will not be able to (nor would they want to) purchase the shares at whatever the strike price is.

The buyer of the contract can also re-sell the contract (I THINK with you still being the shareholder of the options contract) for a higher premium if the share price quickly gains or surpasses the strike price within a reasonable amount of time from expiration. So contract premiums will fluctuate based on a. proximity to strike price and b. the time that the contract expires (the closer it gets the more worthless it is, esp if nowhere near the strike)

Options plays are VERY expensive as a buyer.. and highly risky if you buy cheap ones.

Also, just because you put an options contract out there doesn't mean you'll have buyers for it. Like if a stock is $1 and you want to sell a $5 call contract that expires next week, good luck getting any people who will fall for that. Who knows though, there might be some really stupid people out there.

 

Ok, thanks.

Is there a strategy people use to do this (i.e. to not lose their shares but collect regular premiums)? For example, look for a strike price that pays X% of stock price, with an expiration date of X months?

I read about people saying they do this and create an extra dividend basically, just wondering if there's a go-to method that works, or you just make wild guess and hope for the best?

Edit: When I posted this, you had replied above. Let me read that...

So my goal would be to sell covered calls, that never get called, to collect some cash. I will have to do some more research. I think it can be done, but may not be worth the risk.

 

you will need to have intimate knowledge of a stock and its movements, if it's near earnings etc. I think @707tothe907 trades options a lot. I threw a lot of money away buying cheap options and they expired. Even if you are at strike price, you still need to make enough back to cover the premium, the buyer doesn't get it back unless they just sell the contract to someone else.

I couldn't justify purchasing options that were closer to strike price because they were just so damn expensive. Obviously options would be cheaper if the share price - or volatility - is much lower (there's a relationship of the options price and the share price/movements relative to break-even costs). There's a lot of odd nuance that I don't remember but I think 707 can correct me if I'm wrong somewhere.