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

Earnings good in spite of what’s going on right now? I heard China hasn’t been making many Iphones. Not trying to discourage you man because really and truly I really don’t know. I haven’t kept up with it like I’m sure you have especially since you placed an options call.

 

I saw NVidia take a dip to $307 yesterday and I know you were sweating it...remember that moment and sell 1/2 at least. But I agree with your sentiment...stick to the 1/2 and lock plan

 

NVDA doesn't supply any phone parts. Their a graphics card manufacturer. They supply cards to data service centers as well as computer manufacturers. They also are heavy into making chipsets for AI and car automation. All those industries are projected to have major growth in the next year.

NVDA will beat earnings but as we've seen if their guidance is weak the stock could trend down. If that happens I've still got 28 trading days for it to recover. That's the reason I always but options for expiry at least a month after the companies earnings.

 

if I were in those shoes I’d be bailing out. At worst you’re still out on top a significant chunk of change.

 

60k?

 

Added to NGRU

 

Did you buy? It's up $0.50 after hours already...Come on baby...

 

Bought 500 . was thinking 1000 and then 250 but went with 500 . (shares )

 

Did you get in ? This is a big IF !!!

 

It is fun to see any company that wants a big stock jump can just announce they found what might be some kind of cure maybe. Fun times we live in. I hope it’s real so all stocks can go up

 

200 @$7.05

Well there is that pesky SEC...and that's not where Alabama plays...

 

Bought the Jun 26 $100 DIS PUT today for $261 ea...Let's see if I can catch a dip...I put in a Limit order and just realized it executed when I was checking my transactions...Went through at 15:59:37...

 

Just like in 1999 when anything internet was the hot ticket. Like B to B (biz to biz etc. ) Every penny stock around changed their name for a short stock jump. Man it was fun playing the pump and dumps .

 

Stupid pets.com

 

Not that much but it's never fun to watch your account drop like that. I think me and you may be the only active options traders in this thread currently. So I know you can relate to the violent swings, both up and down, that options leverage can create.

I purchased 12 NVDA Jun $290 calls on April 27th when it was trading it 297ish. A week later it dipped to $291 so I picked up 2 more calls. I would have gotten more but funds where locked up elsewhere at the time. So that set me up to watch big swings. When you've got that much leveraged you understand what the underlying stock price does to the option contract intraday. Monday there was a $13 swing. Tuesday there was a $15 swing. Wednesday there was a $20 swing. Thursday was a $14 swing. Today was off the charts at a $26 swing.

The underlying stock price ended higher Monday. Lower Tuesday and Wednesday. Recovered Thursday. It finally broke resistance today reaching an all time high again. I love options. lol

 

Sin wave prices...option traders dream. I've been buying DIS puts at $108-110 and god love em the stock keeps retreating to $100-103. Look at the chart. 3/26 4/17 4/29 5/8 now 5/15. I hope it continues uneasy. I'm a little concerned that the last retreat was only to 103, but there's always going to be the last time it didn't work before it's up for good. For that I have the Jan 2022 Calls I bought as well on a big dip

 

See all these comments here....when i started, let’s say bikes for example. When someone would talk about wheel dish back then it would be like the peanuts parents. Now I can see it, diagnose it almost without tools (depending on the bike. Bmx is easier to see it), and know exactly how to fix it and exactly when my tools needed to fix it are sitting in my garage.

that’s me with all this options stuff now. I know at a high level sort of what they are (like I could ride a bike) but I’m still way off from knowing enough to tear into a bottom bracket and do it myself.

ah well. In the future. Problem is I’m playing with Monopoly money here so I have to earn first the amount to buy the contracts because I would only let myself gamble with my gambling funds, and it seems options are only really worth it with a lot (relatively a lot) of money to work with.

 

For sure man. On the job training is the best way to learn. When I first started as a carpenter I'd look at blue prints and just shake me head. Now, years later, I'm the guy that gets called when everyone else is shaking their head. None of that came from schooling. It was all practical on the job experience that got me to where I am today.

It's the same with options for me currently. I understand them very well after years of having a clue but not a great clue. Even with that I'm still learning. The difference is where stress can come in if you don't have a good plan. If I fuck up at my job I fix it and still get payed for the week. If I fuck up on an options contract that money is gone. I can't fix it and I can't get it back. I just lost $1000 today on a ALXN option that expired worthless. The charts looked good but it didn't do what I expected. I forgot to set a stop loss on it so I just let it ride. It rode right into the trash. Win them all isn't part of the game. Win more then you loose is the game.

Going back to me still learning about options. A lot of folks here where talking about RCL. I don't think it will recover super fast but it was cheap enough to allow me to buy 400 shares at 36.50. Part of the reason I picked up 400 shares is so I can start writing covered calls on it. I've never written an options call but now seems like a great time to start. The plan goes like this.

Once the stock price reaches $40 I'll have a 10% gain. It's a long hold so I don't care if it goes lower. Once the $40 mark is held and resistance is at about $45 I'll write covered calls weekly. With 400 shares I can cover a month out. The further out I write them the more they are worth but the bigger chance they can be exercised from me. The goal is to write them far enough out of the money for them to expire worthless. That way I keep the premium and the shares. If they do get called I'm still ahead because of what I paid for the stock.

Currently the out of money options are getting from $1.30 to $1.72 a week out. At a month out that's $1.80 to $3.35. So I get $150 to $335 for the contract. That's paid up front and I keep it regardless of what the contract does. So at least $600 a week. That doesn't suck. I won't know if this was a good idea until I actually do it but the plan is solid.

 

First last and best rule of options...DON'T sell naked puts...or un-covered calls. That's suicide. I sell covered calls like @theesotericone was just describing. I use to do it for NRZ I would sell the 1 month or so $17.50 covered (Meaning I own the shares so if the option is exercised I have the shares COVERED) calls, especially if the $0.50 dividend was coming...And for some reason people would often forget the dividend is coming. That $0.50 drop would be instant 2x bonus for the contract price...I would sell calls with DIS as well, but my stop loss for 1/2 my shares hit the other day and that means no more selling calls...
A call is the right to buy shares at a price. You either buy the right to buy the shares or sell the right to buy the shares (and if you sell the right to buy 100 shares at $100 you damn well better own $100 shares...because if it goes to $120 and someone has the right to buy at $100 you are responsible for buying 100 shares at $120 to COVER the call)
A put is the right to sell a stock at a price you buy a put or sell a put. The same rule applies to selling a put..If a stock is trading at $120 and you sell the $100 put you better have 100 shares because if the stock drops to $90 you are responsible toast and on the hook for the extra $10/sharex100 shares, $1K.
You buy puts if you expect a drop
You buy calls if you expect a rise.
Puts profit is limited to the strike price...say a $30 put...The most a stock can drop is to zero (bankrupt) so the put is worth $30x100 shares, $3000.
A Calls profit is unlimited (as is the loss if you don't have shares to cover) because as $30 call on a stock trading at $20 and then the company cures corona virus (come on Sorrento) and the stock shoots to $100 a share you've made a shit ton...

Options let you make the equivalent of 100 shares per contract + time. Time is VERY important. That's why when I buy a contract I always set an immediate good till cancelled sell to close at an acceptable profit...just in case I flake or something.
You don't want to be holding an in the money contract when options expire because your broker can either sell off your assets to cover the exercised cost of the option...say that $20 call on a stock that is now at $30...You need $2,000 to cover the contract and exercise it. It's almost always a better move to sell to close than exercise.
Here is a GREAT book on it Options for Dummies. I read it years ago. Loved it.
online.slidehtml5.com/azff/nyuw/nyuw.pdf