^^I still think that's smart, but I do think some short term gain can be made.

4/30/2008 10:13:24 AM

V must stand for "Very nice".

4/30/2008 11:18:32 AM

Sold Apple a little to earlier, but no regrets. Made great $$$ on it.

4/30/2008 11:19:18 AM

that shit needs to drop back down to 120

[Edited on April 30, 2008 at 11:23 AM. Reason : after i sell that is]

4/30/2008 11:23:34 AM

Dear Wall Street:
You are fucking retarded.

GM posts a $3.3 billion loss and you boost the stock 10%, because "that didn't suck as much as we thought it would!"

What.
The.
Fuck.

4/30/2008 11:39:56 AM

What.
The.
Fuck.

4/30/2008 11:50:34 AM

Why the fuck did I get rid of my EWZ at $85?

4/30/2008 3:25:02 PM

Yeah I think apple could be corrected again.

4/30/2008 3:31:47 PM

What happened to ssjamind?

4/30/2008 4:10:13 PM

Suspended yesterday for making this parroty thread in the Feedback Forum:
?topic=524439

I made a thread about it here.
?topic=524552

[Edited on April 30, 2008 at 4:14 PM. Reason : edit: Damnit what is the preferred way to link these days?! ]

4/30/2008 4:13:02 PM

Quote :

"GM posts a $3.3 billion loss and you boost the stock 10%, because "that didn't suck as much as we thought it would!""

Sounds about right.

4/30/2008 8:18:58 PM

For some family interests, I've been tasked to look for some relatively stable stocks that provide a good dividend.

Right now we have a decent bit of XOM but their dividend really sucks, especially if you look at how much money they're bringing in.

SO and PGN both look like what we're looking for -- any other suggestions?

[Edited on April 30, 2008 at 9:29 PM. Reason : ]

4/30/2008 9:28:12 PM

My father and I run a family scholarship investing fund/corporation.

We have made PGN a main part of our "stable investment" portfolio over the past 8 years.

When things go bad, it stays pretty consistent, and helps avoid useless complainers in the family from coming out of the woodwork, had we invested in apple only to see it drop 40%, making the old people nervous.

4/30/2008 10:19:40 PM

Hmm...
V is going way way up. This is crazy. It's going to be extra expensive by the time I have some money moved around to buy it!

5/1/2008 11:49:51 AM

Yeh, I wish I would have put some more into before earnings last week. Oh well, I picked up some more RIG today on the dip. Looking at some XOM too.

5/1/2008 11:58:05 AM

aw snap - i'm back

thanks to those of you who came to my defence in feedback forum


...as i was saying, yeah, we'll see 90 in V before we see 60. and there have been a rash of upgrades on the streeet on V and MA.

also, i think we may be in the 7th inning stretch of the commodities supercycle. 8th and 9th innings commence at the end of this year/next year and go for the rest of the decade and maybe a few more years. this will be accompanied by dollar strength in the next 9-15 months. see Dennis Gartman's commentary/appearances on TV for detail.

lastly

http://youtube.com/watch?v=T4gUSdTY15I

5/1/2008 3:09:14 PM

I just sold some puts on V at 80 for this month.

Options expire really early this May.

5/1/2008 3:12:28 PM

So you think it's going back down?

5/1/2008 3:29:21 PM

No, it was a good premium and I doubt that it will be under $80 in 2 weeks when they expire. I'm basically just pocketing the money betting that it stays above $80.

5/1/2008 3:30:22 PM

How do you pocket money if it goes up?

5/1/2008 3:33:01 PM

I sold the puts at $1.05/share. In doing so I agreed to buy those shares should they be below the strike price of $80 on the third Friday of the month.

If they're under $80 I have to pay $80 for each share, regardless of how far below $80 the stock price is. If they stay about $80, I get to keep the $1.05/share that I sold them for and I'm not obligated to buy anything.

Another cool thing is that because I'm up $1.05/share from the start, the stock can get put to me for as low as $78.95 before I'm actually in the red.

5/1/2008 3:38:32 PM

Damnit, I'll never understand options

5/1/2008 3:40:31 PM

It really took some hands on experience for me to understand them.

It usually makes no sense when you try to explain it.

5/1/2008 3:41:40 PM

How much did the puts cost and at what price was the stock when you bought them?

5/1/2008 3:48:39 PM

I think that V was around $85.40 when I sold the puts. I didn't buy them because then I would have been betting on the stock being below $78.95 in 2 weeks.

The closer the price of the stock is to the strike price the higher the price of the option. If V had been at say $82 when I sold the puts I'm sure the price would have been much higher. The prices are also inflated by volatility as more traders are trying to bet on it's performance. V is a newer stock that hasn't stabilized into a certain price range yet, so the option premiums are higher than for other similar stocks.

5/1/2008 3:53:25 PM

Don't you have to buy something first before you can sell it?

5/1/2008 3:54:34 PM

[Edited on May 1, 2008 at 4:03 PM. Reason : eh]

5/1/2008 4:01:42 PM

No, the term "selling" can be a bit confusing. Basically I'm being paid to agree to a contract to sell all of my shares at $80 should the price be below $80 when the contract expires.

Should V continue to rise, the premium would drop below $1.05 and I would be able to buy it back and still have made money off of it, while not being obligated to sell any stock. This type of option trading can be very lucrative, but very risky at the same time.

A year or so ago I bought calls on COH the day before their earning report was released. I did so betting that COH would increase considerably post earnings (I think that I mostly based that on the recent reports of other retailers). I ended up being right and the next day I sold the calls and made over a 100% return in something like 16 hours. Of course if I had been wrong (I don't tell people those stories) I could have potentially lost the majority of the money that I had spent on buying the calls.

5/1/2008 4:01:52 PM

Quote :

"I'm being paid to agree to a contract to sell all of my shares at $80 should the price be below $80 when the contract expires. Should V continue to rise, the premium would drop below $1.05 and I would be able to buy it back and still have made money off of it"

Ok, so when do you lose money?

5/1/2008 4:08:11 PM

Options are easy to understand in concept, but pricing them and using them effectively in assessing timing and risk is complicated. In essence, a call is the right to buy, and a put is a right to sell. Pricing is a function of the fundamentals of the underlying asset married with market volatility. The basic pricing formula is known as the Black-Scholes model (there is a thematic variation for Black-Scholes in Europe) -- it from starts there and the market takes over from then on. It all depends on how volatile the asset is relative to the market, and what time frame you want to place your bet on.


If you had season tickets, and I wanted to go to the State Carolina game, but wasn't sure I could make that date. How much I'm willing to pay you for holding the the ticket for me and only me is the price of my call option. Seeing as how the game is months away (t), there is a risk i might be travelling (beta or rate "r"), its in Chapel Hill and i may just not want to go there (phi or theta), i might not pay you $30 right now to hold the ticket for me, but i might pay you $20.

Now, i would be paying for the right to buy without the obligation to buy. If you were buying a put, its the inverse. You're buying the right to but not the obligation to sell me the ticket on by a certain date. By that date, the buyer and seller is each hoping the the rights to the asset are priced favorably towards them.

There should be some guide to options on motley or some other free site you can find. However, getting your feet wet is probably the best way to begin to understand them.

Start by browsing around here and see what makes sense:

http://finance.yahoo.com/q/op?s=V

5/1/2008 4:08:31 PM

You are paying for the right to buy it at the price it was at several weeks ago, right, not the current price?

5/1/2008 4:10:45 PM

no, you're paying for the right to buy it at a certain price within a time frame between now and whenever the strike date is.

5/1/2008 4:14:57 PM

Quote :

"Ok, so when do you lose money?"

In that scenario I'm already up $1.05 per share. If the stock dropped below $80 I would have to buy it. Thanks to the $1.05 I could buy the stock for as low as $78.95 before I would be losing money.

Another option is to buy to close. I would basically be buying the same option that I had sold and letting the two cancel out. The problem is that as the stock price went lower, the cost of the put would increase (of course the time variable comes into play here as well). On the Friday that options expire the premium is almost exactly the difference between the stock price and the strike price because time is close to 0. So if the stock dropped to $77 I could buy to close for $3, leaving me down $1.95 per share, but not getting stuck with any.

One of the safeguards I could use would be to sell the put at $80 for $1.05 and buy the next put at $75 for $0.25 for a net gain of $0.70 per share. Should V absolutely tank and drop to $40/share, I would only be losing $4.30 per share because I would be buying them at $80 and then selling them at $75 (less the $0.70). V is a bad example in this case because the don't have an option at $77.50 this month.

5/1/2008 4:30:06 PM

Quote :

"I could buy the stock for as low as $78.95 before I would be losing money. "

I thought with a put you wanted it to go down.

5/1/2008 4:32:57 PM

I do if I buy the put. If I thought that V would drop to $75 in the next 2 weeks I would buy naked puts at $80 for $1.05. When the contract is assigned I can buy them at $75 (or whatever the cost is) and then sell them at $80 to whoever sold the put, giving me a net gain of $3.95 per share.

By selling the put I'm betting that the stock will stay above the strike price.

5/1/2008 4:42:20 PM

^ "naked" meaning buying just the option not the asset

5/1/2008 4:49:34 PM

Right. One of the better parts of my investment strategy is selling covered calls on almost all of my dividend paying stocks. I think that doing so gets me something like 15% annually on my BAC.

The only problem is that if you don't watch your portfolio attentively you can end up with a basket of underperforming stocks after all of your good ones are called away.

5/1/2008 4:52:57 PM

Well I finally opened up a scottrade account so I can start trying to grow my money a little bit hopefully. I dont have much to work with at the moment mainly because well I have no idea what I am doing. Hopefully I can pickup all this stuff in time and join the rest of you fools making bank.

5/1/2008 5:00:09 PM

read a book, it'll help alot, The Intelligent Investor is a good start

5/1/2008 5:23:58 PM

Not sure The Intelligent Investor is where you want to start.

It kinda runs under he assumption that you know what the hell you're doing

(Great book, but learn the basics first)

5/1/2008 5:42:21 PM

since we're talking about books, those of you that are more interested in options and other equity derivatives, check out the stuff Natenberg writes:

http://tinyurl.com/5sjxl7



[Edited on May 1, 2008 at 6:22 PM. Reason : [Edited on May 1, 2008 at 6:22 PM. Reason : tinyurl]]

5/1/2008 6:10:46 PM

^ Looks like sleeping material to me.

Woohoo another good day for V. Bad day for XOM though.

I want to make sure I understand this:
XOM brings home $10.9 billion. Stock falls 3.62%, because "they didn't make enough money this quarter."
GM LOSES $3.3 billion, stock rises 10% because "That didn't suck as bad as we thought!!"

The markets never cease to amaze me.


I also love how people say that the oil companies are making more money due to higher oil prices. Wrong...
Hell, they have a very small margin. Revenue for this past quarter was $116.9 billion, profits were $10.9 billion. 9.3% profit margins.

5/1/2008 6:32:21 PM

holy fucking cow my portfolio is $25 from being in the GREEN!! woo!!!

5/1/2008 6:45:16 PM

i'm a half percent in the green!

(down from up 26-28% last summer)

5/1/2008 6:50:42 PM

I'M GOING TO TAX YOUR WINDFALL PROFITS SIR

[Edited on May 1, 2008 at 11:53 PM. Reason : 75% of 0.5% sounds about right]

[Edited on May 1, 2008 at 11:54 PM. Reason : i'm also assuming green indicates a gain...and confuses me]

5/1/2008 11:53:16 PM

haha, i meant "in the black".

I'm so used to saying that gauges in the airplane are "in the green", it was sort of a force of habit thing.

5/2/2008 1:10:02 AM

shawty had them apple bottom genes...

5/2/2008 2:40:45 AM

boots with the fur?

I'm drunk.

5/2/2008 3:15:26 AM

the whole trading floor was looking at hurrr

5/2/2008 9:08:16 AM

Good buying opportunity on V? Looks like people are locking in some profits before the weekend.

5/2/2008 2:14:50 PM