[Tamanon]

I've been reading very intensively about options trading. I know it's portrayed as a tricky thing that should only really be handled by professionals, but I like the idea of paying a little bit upfront and having that be the most money you can possibly lose on the transaction. The trouble, as I see it, is that you have to have someone on the other side taking the opposite position, earning a little bit upfront but with a potential for unlimited loss.. and that will be reflected in the price.

You'd be surprised at how many people offer short positions on options. Almost anything you'd want to buy, people are selling.

It's more about who gets the sucker bet.

[besiktas1]

I'm up for the game as well, sign me up too.

P.S. If I had money I'd invest in T2 while it's down and hope for Bioshock to do something then GTA, and EA for Madden then rockband.

P.P.S.
I understand nothing in stock trading

[Tarazet]

You'd be surprised at how many people offer short positions on options. Almost anything you'd want to buy, people are selling. It's more about who gets the sucker bet.

Well, I do see the appeal in short positions as well especially for stable large-caps that don't move very much. You get a certain amount of money up front, and then you just sit and pray you don't lose more than you earned. But I don't think the basic E-trade options package will allow the average Joe to do that because of the unlimited risk thing.

[Tamanon]

Well, generally, the first level of options trading you can get is to short covered calls. That can be a pain for the initial investor because that let's you sell call options only on stock that you own enough of. They have you fill out a questionaire if you want to trade options, asking for your various levels of experience with different types of investments. Then they approve or deny you on the various levels.

[Tarazet]

Well, generally, the first level of options trading you can get is to short covered calls. That can be a pain for the initial investor because that let's you sell call options only on stock that you own enough of. They have you fill out a questionaire if you want to trade options, asking for your various levels of experience with different types of investments. Then they approve or deny you on the various levels.

That could be a problem, because the only stock I have more than 100 of is trading at $1.65. From what I understand, with the standard options rules, options only come in $2.50 increments.

[Tamanon]

Just means you can short a call on that. You definitely don't want to do uncovered shorts at all if you're not financially stable and savvy.

But, longing calls and puts is possible, just might mean you fudge your options experience a little bit on the questionaire:P

[Tarazet]

Just means you can short a call on that. You definitely don't want to do uncovered shorts at all if you're not financially stable and savvy. But, longing calls and puts is possible, just might mean you fudge your options experience a little bit on the questionaire:P

I was thinking of doing long calls. That way everything I lose is what I put in at the beginning - I can't lose more than that, and even if the company goes bankrupt I just let it expire worthless and don't incur any more fees. I've lost money, but not as much as if I had invested in the company with a stock, and it won't take any more out of my pocket than what I've already spent.

[yayaba]

I'm still waiting for TD Ameritrade to activate options on my account. I sent in all the information weeks ago too...

[Tarazet]

What is a "covered" short call, anyway? From the name I'd assume it puts a cap on how much money you can lose, but I would think it would be hard to cap a stock price.

[Tamanon]

Covered means you own the stock you're selling the option on. So you have 100 shares of that stock for each option you sell.

The reason is so that people don't just sell a crapload of stuff they don't have any way of paying for.

[Tarazet]

Covered means you own the stock you're selling the option on. So you have 100 shares of that stock for each option you sell. The reason is so that people don't just sell a crapload of stuff they don't have any way of paying for.

So the "unlimited risk" in this case is, the more the stock goes up, the more you miss out on the profits since your sale price is fixed. Yes?

[xsarien]

Unless you believe in unicorns, buying Apple right now won't make you an instant fortune.

(If you bought it just as recently as a year ago, you might have made a nice chunk of cash, though.)

[koam]

You make money by buying stock 2 ways - an appreciation in your share value (price of your stock goes up), but you will only make money if you sell it (book value increases, but money in your pocket does not, unless you sell). The other way is through dividends. Both of these components - share appreciation and dividends make up your capitol gain on a stock (or capital loss). A dividend is an amount of money set by management of a company that they decide to return to shareholders. Companies typically pay dividends on a quarterly, semi-annual, or annual basis. Some companies don't pay a dividend at all - doesn't mean they're a bad company or in trouble, they could be doing other things with their money like re-investment in the company instead of paying dividends. You'll always want to check a company's history to see if they pay dividends and how often they pay dividends. You'll want a good understanding of their dividend policy up front. Dividend policies of company's typically don't change. Once they set a dividend amount to pay and its frequency, they seldom deviate from it, unless they need that money for reinvestment. As an example, if a company pays a quarterly dividend of .38 cents per share and you own 100 shares, then you will get a check from them for 38 bucks every quarter. Some quarters they may decide not to pay a dividend, but again, it doesn't mean they are in trouble, it could mean that they have to make some major capital purchases in the short-term.

Excellent, first post updated

Unless you believe in unicorns, buying Apple right now won't make you an instant fortune. (If you bought it just as recently as a year ago, you might have made a nice chunk of cash, though.)

That's not true. Apple fluctuates $2 to $4 a day. You can keep buying and selling and making money if you know how to do it :p Instant furtunes = fairy tales anyway.

[Tarazet]

The Fed is going to announce an interest rate decision at 14:15 EST today, so this is going to be a crazy day. Both of my stocks are hosed right now, but that could change in about two hours.

[Tamanon]

Excellent, first post updated That's not true. Apple fluctuates $2 to $4 a day. You can keep buying and selling and making money if you know how to do it :p Instant furtunes = fairy tales anyway.

And if you buy enough to lower the commissions appreciably or rather the cost/share of commisions at least:P

[Tarazet]

Right now: 300 JOB @ $1.6499 5 KLAC @ $57.60 Just to put my toes in the water and see how the market is really.

JOB = $1.57
KLAC = $57.17

Net loss: $65.81 if I sold now. Obviously, I don't want to sell now. :(

[painey]

my stocks went up 6.25p today (3.83%) which is a bloody result :)

I really want to buy TakeTwo shares but I have no idea how to go about buying them online in the UK

[lil smoke]

my stocks went up 6.25p today (3.83%) which is a bloody result :) I really want to buy TakeTwo shares but I have no idea how to go about buying them online in the UK

ttwo looks to be slowly rebounding from the fall to 13.38.
I have a few @ 14.45.

[koam]

PANL is awesome, bought them at $14.98 at this time yesterday, they're at $16.74 right now.

Currently, i'm up $300 with my holdings. Which isn't bad considering that 2 of them are brand new and the other two weren't so hot last week.

Overall
Initial investment: $6000.
Current Worth: $7500.
First investment: April 2007.
Change: +25% :D:D:D

[Tarazet]

No change in interest rates. All of the indexes instantly went into negative territory.

[Incognito]

Just purchased 20 shares of Brk.A. (Berkshire Hathaway).

[lil smoke]

Just purchased 20 shares of Brk.A. (Berkshire Hathaway).

Good luck!

[koam]

Just purchased 20 shares of Brk.A. (Berkshire Hathaway).

yeah i'm sure you did :p That's 2.2 million dollars :p

PANL went up another buck again.. $300 in 2 days, fantastic :p

[koam]

A friend of mine bought PANL after my recommendation and profited $12,000!! I'm so pissed off, i only made $350 in the end :(

I need more money to invest damnit.

I've sold two of my shares today, need new ones to profit on. Any suggestions now that stocks are on sale?

[painey]

Well I just bought my first stocks, 100 Take-Two shares @ $14.38.. now up to $14.50 already :lol Gunna be hard to maintain my current profit/loss as im not just fighting the DOW market but also the £/$ conversion

[Tarazet]

That was a harsh day, my mutual fund took a bit of a hammering so I took the opportunity to throw another $500 into it and balance out my position.

NTDOY - $56.86
AAPL - $124.59
TTWO - $13.59 (down 4.56%)

Not invested in any of those thankfully. :)

[koam]

That was a harsh day, my mutual fund took a bit of a hammering so I took the opportunity to throw another $500 into it and balance out my position. NTDOY - $56.86 AAPL - $124.59 TTWO - $13.59 (down 4.56%) Not invested in any of those thankfully. :)

diversify!

3 Tech stocks = not good.

I sold off a mining one today. Think i'll pick up a bank one but still undecided cause they're still dropping.

[Tarazet]

diversify! 3 Tech stocks = not good. I sold off a mining one today. Think i'll pick up a bank one but still undecided cause they're still dropping.

The only stock I'm invested in right now is a small-cap temp agency. It's a gamble, because it had just come out with poor earnings statements and seen its value drop harshly, but I didn't put much money in it. I mentioned those three because they seem to be hot buttons with the newbies here and I wanted to show them you can quickly get owned like painey just did.

[koam]

Meh, I buy my stocks on their way down. I love days like today when the market drops, everything is on sale. I'll buy the same stock 4-5 times during the day as it drops so that i can keep lowering my book value. At the end of the day, I only get charged once because it's still the same stock and my book value is averaged a lot lower.

Over the next few days, the stock rebounds and i'm happy and sell at a profit. :)

[Tarazet]

Meh, I buy my stocks on their way down. I love days like today when the market drops, everything is on sale. I'll buy the same stock 4-5 times during the day as it drops so that i can keep lowering my book value. At the end of the day, I only get charged once because it's still the same stock and my book value is averaged a lot lower. Over the next few days, the stock rebounds and i'm happy and sell at a profit. :)

Really? I didn't know you could trade the same stock multiple times in a day and pay only one commission fee. I would've taken advantage of that.

[koam]

Really? I didn't know you could trade the same stock multiple times in a day and pay only one commission fee. I would've taken advantage of that.

Yup! I found out not to long ago and got confirmation. Make sure your broker supports this, I checked three canadian ones and they all said yes.

Beware, it has to be the same type of transaction. I.e 5 buys = 1 trade. Mixing and matching doesn't working (i.e buying + selling)

[Tarazet]

Yup! I found out not to long ago and got confirmation. Make sure your broker supports this, I checked three canadian ones and they all said yes. Beware, it has to be the same type of transaction. I.e 5 buys = 1 trade. Mixing and matching doesn't working (i.e buying + selling)

Aha. I'll look into that in my own time, I know E*Trade has much lower commission fees so they might not waive anything due to their lower profit margins.

[koam]

I have some questions/comments or whatever for canadian traders.

1) Anyone have any good canadian companies to invest in? I got $5000 or so after some sales today and need a new canadian company to invest in. Don't feel like converting cash.

2) For you canadian traders, you may want to look into CIBC's Investor's Edge account. $395 for 50 trades and then $6.95 for each additional ones.

As for e*trade, i believe they count it as one trade. I think I read it on their site but you'll have to double check.

[koam]

RIM.TO (Ressearch in Motion TSX) had a 3:1 split this morning. Their stock is affordable now!

[Tarazet]

The deal with E*Trade seems to be that broker-assisted trades are charged a single commission across multiple lots in the same day. But broker-assisted trades cost $45. The standard trades don't seem to have this fine print attached to them.

[koam]

Is there a good site that can track all that stuff for you? I'd like to play around without any actual risks.

Yes, www.fool.com

Sorry i missed this post.

Motley Fool is excellent. You can create an account and choose a bunch of companies and speculate. You're also rated overall versus everyone else who has an account.

[Tarazet]

Yeah, standard E*Trade commissions are one-offs and collected instantly, not at the end of the day. So if you sell half of a stock at 2 pm and the other half at 3:59 pm on the same day, you pay two commissions. That's what I expected since the commission rates are so much lower than TD Waterhouse.

On the plus side, from reading the fine print I found out that I'll be getting a refund check for all trades I place in the first 30 days.. so I might go ahead and bail on this loser stock if it comes back to break-even point and restore my liquidity. I don't think I'll ever want to subject myself to the minute by minute stresses of serious trading unless I have massive amounts of cash to play with and can actually make a living day trading.

[koam]

Yeah, standard E*Trade commissions are one-offs and collected instantly, not at the end of the day. So if you sell half of a stock at 2 pm and the other half at 3:59 pm on the same day, you pay two commissions. That's what I expected since the commission rates are so much lower than TD Waterhouse. On the plus side, from reading the fine print I found out that I'll be getting a refund check for all trades I place in the first 30 days.. so I might go ahead and bail on this loser stock if it comes back to break-even point and restore my liquidity. I don't think I'll ever want to subject myself to the minute by minute stresses of serious trading unless I have massive amounts of cash to play with and can actually make a living day trading.

Wait Waterhouse? You're in Canada?

[Tarazet]

Wait Waterhouse? You're in Canada?

No, but you mentioned your commission fees and they are higher than E*Trade. I was just making the comparison as if there was no geographic limitation.

[Justin Bailey]

I will once again pimp out Zecco.com for their $0 commission trades.

[yayaba]

Damn this market! Damn it!!!

[Tarazet]

Damn this market! Damn it!!!

I know.. *cries* Bears all around. I'm not looking forward to losing another $25 out of my mutual fund.

[LaneMeyer]

With all the talk about Take-Two stocks, I just saw this article

http://news.com.com/SEC+may+file+cha...-0-5&subj=news

[Tarazet]

With all the talk about Take-Two stocks, I just saw this article http://news.com.com/SEC+may+file+cha...-0-5&subj=news

That's actually old news, if you read the article two head guys already pled guilty to the charges last month.

[teh_pwn]

Damn this market! Damn it!!!

I really don't understand why so many people didn't see this coming. There were clear flags:

1. Many tech companies P/E ratios have been getting too high on the basis of unrealistic expectations. Unrealistic at least at the total market level. Not every company can be forecasted to be wildly successful.

2. Housing market isn't steady. So many homes are being built, the average family size is 1.8, and a bunch of baby boomers are about to retire into assisted living. Warren Buffet made the comment that the market will be bad for a while, just like he did in 1998 with tech stocks.

3. The USD is spiraling downward.

[xsarien]

diversify! 3 Tech stocks = not good. I sold off a mining one today. Think i'll pick up a bank one but still undecided cause they're still dropping.

3 tech stocks is fine as long as you have other stocks surrounding them.

However, three tech stocks that represent flavor-of-the-month companies is never smart. Especially Take Two. Remember the last company that more or less tied their whole business to one franchise?

[koam]

3 tech stocks is fine as long as you have other stocks surrounding them. However, three tech stocks that represent flavor-of-the-month companies is never smart. Especially Take Two. Remember the last company that more or less tied their whole business to one franchise?

Well that was my point, he made it sound like he only had those 3 stocks.

[painey]

I bought 100 TTWO @ $14.38 and 55 @ $12.50.. i cant quite believe its up $2+ in two days, currently at $14.95. I just hope its constantly on the rise :D

[Tarazet]

This week has been very quiet compared to last. If the Fed's intention was to stabilize the market, then it seems to be working. At this rate my losses from last week will be erased by tomorrow.

[koam]

God damnit, i should have bought rim.to like i wanted to. After the split, they were at $68.. right now they're fetching at 88.18.