OT: Stock trading

[HuskyHawk]

Options are not complicated, they’re actually quite simple. Both “put” and “call” options are contracts that give the trader the option to either sell his holdings at a price above the current market price (a put), or to purchase shares at a price that’s quite a bit under the current market price.

What part of my MBA level finance class at UConn on them made you think I didn’t know that? Valuing them is not simple.

 

[uconndogs]

I can think of no greater flaw when investing or trading than hubris.

 

[husky429]

Options are not complicated, they’re actually quite simple. Both “put” and “call” options are contracts that give the trader the option to either sell his holdings at a price above the current market price (a put), or to purchase shares at a price that’s quite a bit under the current market price.

You answered "what is an option?," not "how to trade options."

 

[HuskyHawk]

I can think of no greater flaw when investing or trading than hubris.

You answered "what is an option?," not "how to trade options."

One would think the short squeeze on GameStop would illustrate this point. Intrinsic valuation metrics would have produced a radically different result than what we saw. The markets are no longer rational and have gotten less rational over time since online trading opened them to the masses (which was a good thing). Joe investor isn't calculating the present value of future earnings and dividends then adjusting for risk. He is saying, "Coke seems like a solid company with decent dividends" or "I bet this company will do well as we make more EV batteries". Or for GameStop, that enough small investors working collectively can artificially inflate any asset as long as they don't fear the losses. No model can predict that.

I used options as simple leverage back in the late 90s and 00s, because I lacked the funds to buy shares. I once knew how to build complicated spreads that guaranteed a return, but those required massive capital for relatively small ROI. Big players with supercomputers own that space. They still work as leverage, and for short positions, but I no longer need to accept the additional risk that comes with that. If others do, go for it.

 

[CONN78SEJ]

What part of my MBA level finance class at UConn on them made you think I didn’t know that? Valuing them is not simple.

Actually valuing them is quite simple, they are just a reflection of the underlying stock price and all you need is an understanding of simple technical analysis and resistance and support levels to predict the short term trends. If you’re holding calls on Stock ABC and the price of the stock goes up a lot on heavy volume then that option is like gold.

 

[HuskyHawk]

Actually valuing them is quite simple, they are just a reflection of the underlying stock price and all you need is an understanding of simple technical analysis and resistance and support levels to predict the short term trends. If you’re holding calls on Stock ABC and the price of the stock goes up a lot on heavy volume then that option is like gold.

That is simply "leverage". That's the most simplistic view of them as a leveraged proxy for the underlying stock. Stock drops and your call can be worth zero, which is why it carries greater risk than holding the shares.

But that's not how professional traders look at them. There are millions of little micro adjustments in those option prices that don't always track the stock. The goal is to exploit those. Used to be people with calculators doing that math, but now I'm sure sophisticated programs do all of it.

 

[CONN78SEJ]

That is simply "leverage". That's the most simplistic view of them as a leveraged proxy for the underlying stock. Stock drops and your call can be worth zero, which is why it carries greater risk than holding the shares.

But that's not how professional traders look at them. There are millions of little micro adjustments in those option prices that don't always track the stock. The goal is to exploit those. Used to be people with calculators doing that math, but now I'm sure sophisticated programs do all of it.

Yes, the risk is greater but so are the rewards. Then again if you’re long the stock and think it might drop buy some puts then you could still sell it at a good price or you could just sell the put option at its fair market value. What’s key here is the ability to read a short term chart and recognize selling pressure or buying pressure. I’m old style and it still works.

 

[Dogdeacon]

That’s precisely why now’s the time to buy them. With interest rates going up bonds and treasuries are attractive. Or like I told the other dumb dumb just find over bought stocks and sell them short. You do know how Joseph P Kennedy made the family fortune? It wasn’t bootlegging either.

Lol, the stock market has basically gone straight and to the right since 1940. Look at the numbers. Yes there are short downturns, but you can draw a line straight up and to the right. Plot that against the inflation adjusted value of the dollar and tell me how you plan to keep up with rising costs if you don’t invest in stocks.

"Of course it’s gone straight to the right unless you’re living in a time machine. Lol. Time does move forward last I checked."
Obviously he mistyped and didn't put in UP and to the right, don't be daft.

Joseph P Kennedy? Gold and silver... I don't think we can rule out the possibility that you are 120 years old.

 

[CONN78SEJ]

"Of course it’s gone straight to the right unless you’re living in a time machine. Lol. Time does move forward last I checked."
Obviously he mistyped and didn't put in UP and to the right, don't be daft.

Joseph P Kennedy? Gold and silver... I don't think we can rule out the possibility that you are 120 years old.

Good luck to you in your trading.

 

[wingsfan055]

Options can be used for hedging, speculation, or incremental revenue, depending on your strategy. That's the beauty. It's a way of managing risk. It requires a bit of homework to learn the different strategies, but there are free tools, webinars and videos today, that didn't exist 10 years ago. I own a bunch of stock for the dividends or LT holdings, but most of my 1099 profits is from options trading. I make more from this than my job I love.

 

[temery]

Anyone here use Ascensus? Vanguard just gave my account to Ascensus. I'm logged in but nothing makes sense. No link to see holdings, trades, etc.

 

[CONN78SEJ]

Options can be used for hedging, speculation, or incremental revenue, depending on your strategy. That's the beauty. It's a way of managing risk. It requires a bit of homework to learn the different strategies, but there are free tools, webinars and videos today, that didn't exist 10 years ago. I own a bunch of stock for the dividends or LT holdings, but most of my 1099 profits is from options trading. I make more from this than my job I love.

Couldn’t you just write the options yourself, be it puts or calls, and sell them? There’s definitely a market for them.

 

[thekollieman]

I have a general investing question maybe someone can help me with:

Years ago I worked for my local board of education and put in to a retirement plan (I think it’s a 403(b), but I’m honestly not sure) during my time there. Now that I don’t work there anymore, is it true that I can no longer contribute to the account? Can/should I move that money over to a new personal retirement account so I can continue adding into it?

Thanks in advance to anyone who takes the time to answer this.

 

[temery]

I have a general investing question maybe someone can help me with:

Years ago I worked for my local board of education and put in to a retirement plan (I think it’s a 403(b), but I’m honestly not sure) during my time there. Now that I don’t work there anymore, is it true that I can no longer contribute to the account? Can/should I move that money over to a new personal retirement account so I can continue adding into it?

Thanks in advance to anyone who takes the time to answer this.

Was likely a 457 plan. I started coaching before teaching and the school system said I had to contribute to the 457 or pay SS.

 

[thekollieman]

Was likely a 457 plan. I started coaching before teaching and the school system said I had to contribute to the 457 or pay SS.

It was voluntary. I was a full-time paraprofessional there and definitely also had SS (assuming that’s social security) taken out of all my paychecks. I didn’t have the retirement plan initially but ultimately contributed to it for about a year and half before I left that job to go back to school.

 

[Minicoop69]

I have a general investing question maybe someone can help me with:

Years ago I worked for my local board of education and put in to a retirement plan (I think it’s a 403(b), but I’m honestly not sure) during my time there. Now that I don’t work there anymore, is it true that I can no longer contribute to the account? Can/should I move that money over to a new personal retirement account so I can continue adding into it?

Thanks in advance to anyone who takes the time to answer this.

Could be a 403b, 401A, or many others. I have both of those through my school Corp.

You can't contribute to that account anymore because you no longer work there. You can rollover the account to another account so you can keep adding money to it. Hey should of the new account company and talk to them. They know how to do it. Usually just fill out a piece of paper with all the information on it and it will take a couple of weeks.

I just did this with an account from an older school Corp I used to work for. No problems at all.

 

[HuskyHawk]

Anyone here use Ascensus? Vanguard just gave my account to Ascensus. I'm logged in but nothing makes sense. No link to see holdings, trades, etc.

They seem like one of the larger independent plan managers. I wouldn't expect the full suite of offerings you'd get with Vanguard or Fidelity. Seems likely that your former employer switched to them from Vanguard (they're bound to be cheaper). I had an employer move our plan from UBS to Fidelity (thankfully).

If you have other stuff still at Vanguard, you could always move it back in a rollover. My wife inherited a 401k and we just moved it to Fidelity in an inherited rollover IRA. The company that was managing it was awful. Ascensus is probably better than they were.

 

[B1GEast]

I have a general investing question maybe someone can help me with:

Years ago I worked for my local board of education and put in to a retirement plan (I think it’s a 403(b), but I’m honestly not sure) during my time there. Now that I don’t work there anymore, is it true that I can no longer contribute to the account? Can/should I move that money over to a new personal retirement account so I can continue adding into it?

Thanks in advance to anyone who takes the time to answer this.

Correct. You can no longer contribute to the account.

You can move the funds to another retirement account to an advisor that will manage your account or you can transfer the funds into a self managed brokerage like Charles Schwab.

There are plenty of firms that would be more than happy to help you. More than likely, you have a friend or family member that you are unaware of that can help you.

There's nothing more awkward that going to a family event after the fact and having someone ask you, "why didn't you ask me"...

I'm a big supporter of helping family and friends, but some people also want to keep their financial info private and I get it. Good luck

 

[thekollieman]

Correct. You can no longer contribute to the account.

You can move the funds to another retirement account to an advisor that will manage your account or you can transfer the funds into a self managed brokerage like Charles Schwab.

There are plenty of firms that would be more than happy to help you. More than likely, you have a friend or family member that you are unaware of that can help you.

There's nothing more awkward that going to a family event after the fact and having someone ask you, "why didn't you ask me"...

I'm a big supporter of helping family and friends, but some people also want to keep their financial info private and I get it. Good luck

That’s a great point. This has on the back burner of my things to do in the near future. I’ll definitely ask my dad before making any moves.

 

[husky429]

I have a general investing question maybe someone can help me with:

Years ago I worked for my local board of education and put in to a retirement plan (I think it’s a 403(b), but I’m honestly not sure) during my time there. Now that I don’t work there anymore, is it true that I can no longer contribute to the account? Can/should I move that money over to a new personal retirement account so I can continue adding into it?

Thanks in advance to anyone who takes the time to answer this.

As others said, do a rollover. I'd also add that the fees on those things (looking at you, Equitable) to rollover can be ABSURD. May not even be worth it--I'd do some digging into the fine print or call someone.

 

[Jay-Bone]

How can the fed be so bad at their jobs? Totally reactive instead of proactive.

 

[CONN78SEJ]

Correct. You can no longer contribute to the account.

You can move the funds to another retirement account to an advisor that will manage your account or you can transfer the funds into a self managed brokerage like Charles Schwab.

There are plenty of firms that would be more than happy to help you. More than likely, you have a friend or family member that you are unaware of that can help you.

There's nothing more awkward that going to a family event after the fact and having someone ask you, "why didn't you ask me"...

I'm a big supporter of helping family and friends, but some people also want to keep their financial info private and I get it. Good luck

Schwab is ok, but more to follow, I’ve had an account with Ameritrade for years, and they were recently acquired by Schwab.

 

[temery]

Anyone have a thought on CRISPR?

 

[HuskyHawk]

Anyone have a thought on CRISPR?

Last Thursday it was a good short term buy.

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[KemBuckets21]

Powell industries gents. Excellent forward PE signaling it’s still undervalued even though it’s surging. Would love for a pullback so I can find a spot to buy back in