Official Stock Market Investing Thread

[Steve 2.0]

choosing between having fun and making money is like choosing between lobster and cracked crab, why can't everyone have both, like the movie Trading Places. [tropico music playing]

It was just a joke, dude.

[nullnor]

if I had to randomly guess about the motley fool website I would harken back to my days of penny stock websites being paid by penny stock companies to pump and dump a stock. back in the day, when there was this window where the internet's influence was being voir dired, citizens might not have realized it's influence on individual stocks. exuberance. kind of like guys like Cramer even though he is in his own category.

it's kind of like the show Ancient Aliens, it's very titillating, scintillating, it might not be true but along the journey you learn things and tools that are true that you didn't know about.

of course now the influence of social and economic and individual stock opinion on the internet has gone viral and metastasized. pumping a stock is about having strength in numbers. I pay the owners of motley fool 1 million shares of my stock and they recommend and promote it to their members to do the same thing to everyone else. in essence, IBD is the same thing, just on a bigger, safer, more accurate scale.

[Gregg]

Buy Low, Sell High

I bought my first investment grade handgun a couple of weeks ago using this Buy Low and will eventually sell High philosophy.

It is a mint never fired 1974 revolver. It comes with an immediate profit of somewhere between $500-1000 profit if I were to sell it today. It is rare to find one in this condition. We will not shoot it, but it is fun to own.

I have no interest in selling it now. I will re-evaluate it next year. My wife and I have discussed keeping it in the family and passing it down.

It will never be worth less than we paid for it if we keep it mint.

[nullnor]

choosing between making money and having fun is like choosing between KFC and nose picking school during the coronavirus. the motto isn't finger licking good.

[Gregg]

It was just a joke, dude.

Having lobster and crab after pulling some bongs used to be pretty fun...or so I have been told.

[nullnor]

Having lobster and crab after pulling some bongs used to be pretty fun...or so I have been told.

there is a school for that!

[nullnor]

choosing between having fun and making money is like China not invading Taiwan. everyone gets the uProcessors, but China gets most of the benefits. in contrast, taking over the island would halt the innovation and expertise of their silicon foundries; and start a third world war and hurt growth.

[Steve 2.0]

I bought my first investment grade handgun a couple of weeks ago using this Buy Low and will eventually sell High philosophy.

It is a mint never fired 1974 revolver. It comes with an immediate profit of somewhere between $500-1000 profit if I were to sell it today. It is rare to find one in this condition. We will not shoot it, but it is fun to own.

I have no interest in selling it now. I will re-evaluate it next year. My wife and I have discussed keeping it in the family and passing it down.

It will never be worth less than we paid for it if we keep it mint.

Even if it is suffering?

[Gregg]

Even if it is suffering?

Nicely played.

[revo]

Update?

I've discovered the happy medium: buying long-term options. Short-term options have wild swings, often into triple digits (or if unlucky, down 99%), but if you buy options with a 6-12 month timeframe, you get the best of all worlds with stocks -- huge returns, and time to correct if you're down.

I bought GM calls on Friday. Three days later, I'm up 115% in the position already.

OTOH, I bought MSFT June calls, and I'm down 35% in that position -- but with 5+ months to go, I don't have any concern whatsoever.

So lesson learned -- if you want to play with options, give yourself a lot of slack.

[Gregg]

I've discovered the happy medium: buying long-term options. Short-term options have wild swings, often into triple digits (or if unlucky, down 99%), but if you buy options with a 6-12 month timeframe, you get the best of all worlds with stocks -- huge returns, and time to correct if you're down.

I bought GM calls on Friday. Three days later, I'm up 115% in the position already.

OTOH, I bought MSFT June calls, and I'm down 35% in that position -- but with 5+ months to go, I don't have any concern whatsoever.

So lesson learned -- if you want to play with options, give yourself a lot of slack.

What are the definitions of long term and short term options?

[revo]

What are the definitions of long term and short term options?

Short term: under a month
Long term: 6-12 months

And since that post at 9:51, GM options are up another 60%.

[Gregg]

Short term: under a month
Long term: 6-12 months

And since that post at 9:51, GM options are up another 60%.

So if I read this right, you are up now 175% since Friday. But instead of cashing in and taking the profit, you will hold on to this for at least 6 months? What are you hoping to make by holding on to this?

Or when you bought this on Friday do the rules make you hold on to it for 6 months?

[revo]

So if I read this right, you are up now 175% since Friday. But instead of cashing in and taking the profit, you will hold on to this for at least 6 months? What are you hoping to make by holding on to this?

Or when you bought this on Friday do the rules make you hold on to it for 6 months?

You can buy or sell anytime until 4:00pm on the day of expiration. If you hold after, it either expires worthless or you will be awarded the shares at the price of your contract (so you will need the $$ in your account). 99% of the time, you're trading option contracts and not holding them.

These GM calls are for March, 2 1/2 months from now. I bought them because of unusually high volume in that particular expiration/strike price.

And yeah, up 175% since Friday in them.

[Gregg]

You can buy or sell anytime until 4:00pm on the day of expiration. If you hold after, it either expires worthless or you will be awarded the shares at the price of your contract (so you will need the $$ in your account). 99% of the time, you're trading option contracts and not holding them.

These GM calls are for March, 2 1/2 months from now. I bought them because of unusually high volume in that particular expiration/strike price.

And yeah, up 175% since Friday in them.

I am sorry for the ignorance. Can you sell them today? If so will you or do you hope to make more by March?