Stock Market Day-Trading Discussion Thread

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[quote author="morekaos" date=1228193516]OK, did everyone enjoy that short covering rally? I think it is officially over now. I am just bummed I didn't short Gold the other day at 840....blew it, can't get em all</blockquote>
Maybe because the earnings warnings are gonna keep coming like a freight train (FedEx and TI after the bell today). The question is how long the market wants to keep struggling off these warnings? My answer is, not too much longer especially the cuts are gonna be deep which I think they will be when companies report their 4Q earnings early next year.
 
[quote author="usctrojanman29" date=1228808544][quote author="morekaos" date=1228193516]OK, did everyone enjoy that short covering rally? I think it is officially over now. I am just bummed I didn't short Gold the other day at 840....blew it, can't get em all</blockquote>
Maybe because the earnings warnings are gonna keep coming like a freight train (FedEx and TI after the bell today). The question is how long the market wants to keep struggling off these warnings? My answer is, not too much longer especially the cuts are gonna be deep which I think they will be when companies report their 4Q earnings early next year.</blockquote>


Just my 0.02, I don't consider fundamentals and use technical analysis and human psychology and the past history between a stock and other effects. The charts will tell me what others think so why worry, let the crowd decide.
 
I can't say I don't fail. I fail plenty. However, I think the goal to making money in the stock market is to minimize your failed trades and maximize your successful trades.



Just like poker...know when to fold them and take a small loss vs. chasing the river till you bleed dry.



Anytime I violate this basic rule, I seem to lose a lot of money.
 
Here are some basic tips on how I allocate my capital. (Everybody has their style, I'm not telling you what to do...I'm simply giving you a glimpse of my style)



I always have the following:

A.) 10-20% in cash no matter what. (never moves...for offense and defense)



B.) 5-10% of my capital goes to riskier investments such as small emerging companies and various option contracts. (This part of portfolio is fail most of the time...but once in a while the "gamble" pays off ;)



C.) 60-70% in Cisco Systems, Exxon Mobil, Alcoa. For about 7 years now, most of my money is in these 3 companies. (Big money here)



It is easy to get acquainted with almost every company listed in the stock market. It is very difficult to master them all. I came to this conclusion long time ago and only trade those three companies religiously. I know what they do, what they eat and drink and how their heart beats on a daily basis.

Once you master a few companies, you'll be able to know when to buy and sell on a daily, weekly, monthly and yearly basis. Overtime if you hold these, they won't yield you much, but recycling your cash through them over and over by engineering various financial strategies will yield more than you can imagine. Plus they are safer than most.



Good luck!
 
Quick note...if you do adapt this style of trading...don't pick Bank of America, JP Morgan and Wells Fargo as your three to master obviously.
 
I'm counting my blessings. Tha market moved south, but Cisco and Alcoa, Exxon seem to simply hold ground and trading dead-flat. Thats exactly what I want since I sold calls on these guys. I just need them to hold till end of next week. *Crosses fingers*



I also have about 20 BofA puts I bought for 1.55. They went to 0.00 to 0.05 cents. haha. I held on to them because I didn't care to sell em and wrote it off as a loss. However, recently they moved to 15 cents. YAY! Maybe I get a few pennies back. What a failure.
 
[quote author="blackvault_cm" date=1229129316]I'm counting my blessings. Tha market moved south, but Cisco and Alcoa, Exxon seem to simply hold ground and trading dead-flat. Thats exactly what I want since I sold calls on these guys. I just need them to hold till end of next week. *Crosses fingers*



I also have about 20 BofA puts I bought for 1.55. They went to 0.00 to 0.05 cents. haha. I held on to them because I didn't care to sell em and wrote it off as a loss. However, recently they moved to 15 cents. YAY! Maybe I get a few pennies back. What a failure.</blockquote>
You should have sold Dec 5 Puts on BAC, talk about stealing money (I only wish I would have sold 100 of them instead of 25). I'm looking at picking up Dec 27.50 Puts on Best Buy since I think they'll report dog crap earnings.
 
[quote author="usctrojanman29" date=1229198232][quote author="blackvault_cm" date=1229129316]I'm counting my blessings. Tha market moved south, but Cisco and Alcoa, Exxon seem to simply hold ground and trading dead-flat. Thats exactly what I want since I sold calls on these guys. I just need them to hold till end of next week. *Crosses fingers*



I also have about 20 BofA puts I bought for 1.55. They went to 0.00 to 0.05 cents. haha. I held on to them because I didn't care to sell em and wrote it off as a loss. However, recently they moved to 15 cents. YAY! Maybe I get a few pennies back. What a failure.</blockquote>
You should have sold Dec 5 Puts on BAC, talk about stealing money (I only wish I would have sold 100 of them instead of 25). I'm looking at picking up Dec 27.50 Puts on Best Buy since I think they'll report dog crap earnings.</blockquote>


What is the difference between CGUMA and BYOME (two different Jan 5 puts)? If I were to sell Jan puts on BAC, <em><strong>with the intention of having them expire worthless</strong></em>, why should I (or shouldn't I) sell CGUMA as opposed to BYOME?
 
[quote author="usctrojanman29" date=1229198232][quote author="blackvault_cm" date=1229129316]I'm counting my blessings. Tha market moved south, but Cisco and Alcoa, Exxon seem to simply hold ground and trading dead-flat. Thats exactly what I want since I sold calls on these guys. I just need them to hold till end of next week. *Crosses fingers*



I also have about 20 BofA puts I bought for 1.55. They went to 0.00 to 0.05 cents. haha. I held on to them because I didn't care to sell em and wrote it off as a loss. However, recently they moved to 15 cents. YAY! Maybe I get a few pennies back. What a failure.</blockquote>
You should have sold Dec 5 Puts on BAC, talk about stealing money (I only wish I would have sold 100 of them instead of 25). I'm looking at picking up Dec 27.50 Puts on Best Buy since I think they'll report dog crap earnings.</blockquote>


USC,

There is no such thing as easy money...If money is easy, that means its easily lost as well. I take risks, but you have to understand I make a living off the stock-market. My biggest goal is also capital preservation, especially in times like these. Selling naked puts is something I will never do, but I'm glad its working out for you. I just don't want to take that risk.
 
[quote author="blackvault_cm" date=1229409936][quote author="usctrojanman29" date=1229198232][quote author="blackvault_cm" date=1229129316]I'm counting my blessings. Tha market moved south, but Cisco and Alcoa, Exxon seem to simply hold ground and trading dead-flat. Thats exactly what I want since I sold calls on these guys. I just need them to hold till end of next week. *Crosses fingers*



I also have about 20 BofA puts I bought for 1.55. They went to 0.00 to 0.05 cents. haha. I held on to them because I didn't care to sell em and wrote it off as a loss. However, recently they moved to 15 cents. YAY! Maybe I get a few pennies back. What a failure.</blockquote>
You should have sold Dec 5 Puts on BAC, talk about stealing money (I only wish I would have sold 100 of them instead of 25). I'm looking at picking up Dec 27.50 Puts on Best Buy since I think they'll report dog crap earnings.</blockquote>


USC,

There is no such thing as easy money...If money is easy, that means its easily lost as well. I take risks, but you have to understand I make a living off the stock-market. My biggest goal is also capital preservation, especially in times like these. Selling naked puts is something I will never do, but I'm glad its working out for you. I just don't want to take that risk.</blockquote>
That is true, I misspoke. It was easy money looking back on the trade now. I sold those puts when BofA was around $11/share because I couldn't see BofA trading below $5 this year plus my losses would have been limited because the stock can't go below $0. I do understand about capital preservation, especially now that I got laidoff, and that is exactly why I only sold 25 puts and not 100 puts (too much possible risk). When I made the trade I was employed and trading income that I made was treated as supplemental income so I took calculated risks. I'm gonna be looking to pick up some quality stocks and selling covered calls on them to generate some recurring income. Any thoughts on buying those BBY Dec $27.50 puts? I picked 10 up @ $3.70?
 
[quote author="BLUE FIRE" date=1229390798][quote author="usctrojanman29" date=1229198232][quote author="blackvault_cm" date=1229129316]I'm counting my blessings. Tha market moved south, but Cisco and Alcoa, Exxon seem to simply hold ground and trading dead-flat. Thats exactly what I want since I sold calls on these guys. I just need them to hold till end of next week. *Crosses fingers*



I also have about 20 BofA puts I bought for 1.55. They went to 0.00 to 0.05 cents. haha. I held on to them because I didn't care to sell em and wrote it off as a loss. However, recently they moved to 15 cents. YAY! Maybe I get a few pennies back. What a failure.</blockquote>
You should have sold Dec 5 Puts on BAC, talk about stealing money (I only wish I would have sold 100 of them instead of 25). I'm looking at picking up Dec 27.50 Puts on Best Buy since I think they'll report dog crap earnings.</blockquote>


What is the difference between CGUMA and BYOME (two different Jan 5 puts)? If I were to sell Jan puts on BAC, <em><strong>with the intention of having them expire worthless</strong></em>, why should I (or shouldn't I) sell CGUMA as opposed to BYOME?</blockquote>
I think the CGU series of puts have some kind of cash value associated with them or something unusual like that. I honestly have no idea what the market is gonna do between now and the end of Jan. 2009, but I do think that the market will be heading lower than we are today in 1Q 2009.
 
[quote author="usctrojanman29" date=1229420138][quote author="blackvault_cm" date=1229409936][quote author="usctrojanman29" date=1229198232][quote author="blackvault_cm" date=1229129316]I'm counting my blessings. Tha market moved south, but Cisco and Alcoa, Exxon seem to simply hold ground and trading dead-flat. Thats exactly what I want since I sold calls on these guys. I just need them to hold till end of next week. *Crosses fingers*



I also have about 20 BofA puts I bought for 1.55. They went to 0.00 to 0.05 cents. haha. I held on to them because I didn't care to sell em and wrote it off as a loss. However, recently they moved to 15 cents. YAY! Maybe I get a few pennies back. What a failure.</blockquote>
You should have sold Dec 5 Puts on BAC, talk about stealing money (I only wish I would have sold 100 of them instead of 25). I'm looking at picking up Dec 27.50 Puts on Best Buy since I think they'll report dog crap earnings.</blockquote>


USC,

There is no such thing as easy money...If money is easy, that means its easily lost as well. I take risks, but you have to understand I make a living off the stock-market. My biggest goal is also capital preservation, especially in times like these. Selling naked puts is something I will never do, but I'm glad its working out for you. I just don't want to take that risk.</blockquote>
That is true, I misspoke. It was easy money looking back on the trade now. I sold those puts when BofA was around $11/share because I couldn't see BofA trading below $5 this year plus my losses would have been limited because the stock can't go below $0. I do understand about capital preservation, especially now that I got laidoff, and that is exactly why I only sold 25 puts and not 100 puts (too much possible risk). When I made the trade I was employed and trading income that I made was treated as supplemental income so I took calculated risks. I'm gonna be looking to pick up some quality stocks and selling covered calls on them to generate some recurring income. Any thoughts on buying those BBY Dec $27.50 puts? I picked 10 up @ $3.70?</blockquote>


Sorry I haven't been on much lately, been feeling sick. Not sure I'd play Best Buy. Alot of news has been baked in, fed is supposed to cut rates. I would lean along the lines that the stock doesn't move at all or moves up. In either of these cases, puts will either fall due to no activity or if the stock moves up. Buying puts before earnings usually means that there is extra premium baked into it as well, as people expect big moves on way or another. So if it doesn't pan out, you will lose quite a bit especially close to expiration.



So really its a matter of your own opinion, just remember in order to profit from puts in this case, BBY has to do "extra" bad. Any sign of ok news will send this stock up.

I personally am sticking to writing calls/puts atm.



EDIT: I didn't mean this just for Best Buy either. I meant it really for all stocks. We are stock in a flat period where we are atrading from 8500-8900. About 2 weeks ago, I noticed making money on puts or calls isn't "easy money" anymore. I mean think, for a two month period DOW didn't have a 2 day winning session. Making puts almost an easy way to make money and that has changed.
 
Fed Cut rates...as expected. I bet market will start going south from here and maybe retest 7500. The fed fired its last bullet. Lets face it, each bullet before missed anyways. It was just a psychological way to try and put some confidence in the market.

I wonder if market will start thinking and say...where do we go next? There are no more rate cuts. Just a possible scenario to think about.
 
[quote author="blackvault_cm" date=1229486961]Fed Cut rates...as expected. I bet market will start going south from here and maybe retest 7500. The fed fired its last bullet. Lets face it, each bullet before missed anyways. It was just a psychological way to try and put some confidence in the market.

I wonder if market will start thinking and say...where do we go next? There are no more rate cuts. Just a possible scenario to think about.</blockquote>


I know alot of places may start borrowing from us... even though our ratings name is mudd....

I'm just SOooo happy that my CD's I purchased a while back are doing ok. Even at the paltry % they yeild.



-bix
 
[quote author="blackvault_cm" date=1229486961]Fed Cut rates...as expected. I bet market will start going south from here and maybe retest 7500. The fed fired its last bullet. Lets face it, each bullet before missed anyways. It was just a psychological way to try and put some confidence in the market.

I wonder if market will start thinking and say...where do we go next? There are no more rate cuts. Just a possible scenario to think about.</blockquote>


I dunno, sooner or latter a negative rate of return (t-bills) and 0 return on Money markets are gonna push quite a few off the wall. Estimates run anywhere from 8 - 14 trillion in cash and cash equivalents. Money always looks for a place to go. My door is open
 
[quote author="morekaos" date=1229489016][quote author="blackvault_cm" date=1229486961]Fed Cut rates...as expected. I bet market will start going south from here and maybe retest 7500. The fed fired its last bullet. Lets face it, each bullet before missed anyways. It was just a psychological way to try and put some confidence in the market.

I wonder if market will start thinking and say...where do we go next? There are no more rate cuts. Just a possible scenario to think about.</blockquote>


I dunno, sooner or latter a negative rate of return (t-bills) and 0 return on Money markets are gonna push quite a few off the wall. Estimates run anywhere from 8 - 14 trillion in cash and cash equivalents. Money always looks for a place to go. My door is open</blockquote>


Well I'm sticking to writing calls another month. I see this market bouncing from 8500-9000 for a bit more. Im hoping it stays at the high end of it like right now so I can sell some calls at a higher premium anticipating a drop. We'll see.
 
[quote author="blackvault_cm" date=1229486961]Fed Cut rates...as expected. I bet market will start going south from here and maybe retest 7500. The fed fired its last bullet. Lets face it, each bullet before missed anyways. It was just a psychological way to try and put some confidence in the market.

I wonder if market will start thinking and say...where do we go next? There are no more rate cuts. Just a possible scenario to think about.</blockquote>


There are more ways to print money than just lowering the fed funds rate, but I am confused. To me, lowering the fed funds rate to 0.25% is a sign of desperation and panic. Why aren't investors reading it the same?
 
[quote author="blackvault_cm" date=1229466226][quote author="usctrojanman29" date=1229420138][quote author="blackvault_cm" date=1229409936][quote author="usctrojanman29" date=1229198232][quote author="blackvault_cm" date=1229129316]I'm counting my blessings. Tha market moved south, but Cisco and Alcoa, Exxon seem to simply hold ground and trading dead-flat. Thats exactly what I want since I sold calls on these guys. I just need them to hold till end of next week. *Crosses fingers*



I also have about 20 BofA puts I bought for 1.55. They went to 0.00 to 0.05 cents. haha. I held on to them because I didn't care to sell em and wrote it off as a loss. However, recently they moved to 15 cents. YAY! Maybe I get a few pennies back. What a failure.</blockquote>
You should have sold Dec 5 Puts on BAC, talk about stealing money (I only wish I would have sold 100 of them instead of 25). I'm looking at picking up Dec 27.50 Puts on Best Buy since I think they'll report dog crap earnings.</blockquote>


USC,

There is no such thing as easy money...If money is easy, that means its easily lost as well. I take risks, but you have to understand I make a living off the stock-market. My biggest goal is also capital preservation, especially in times like these. Selling naked puts is something I will never do, but I'm glad its working out for you. I just don't want to take that risk.</blockquote>
That is true, I misspoke. It was easy money looking back on the trade now. I sold those puts when BofA was around $11/share because I couldn't see BofA trading below $5 this year plus my losses would have been limited because the stock can't go below $0. I do understand about capital preservation, especially now that I got laidoff, and that is exactly why I only sold 25 puts and not 100 puts (too much possible risk). When I made the trade I was employed and trading income that I made was treated as supplemental income so I took calculated risks. I'm gonna be looking to pick up some quality stocks and selling covered calls on them to generate some recurring income. Any thoughts on buying those BBY Dec $27.50 puts? I picked 10 up @ $3.70?</blockquote>


Sorry I haven't been on much lately, been feeling sick. Not sure I'd play Best Buy. Alot of news has been baked in, fed is supposed to cut rates. I would lean along the lines that the stock doesn't move at all or moves up. In either of these cases, puts will either fall due to no activity or if the stock moves up. Buying puts before earnings usually means that there is extra premium baked into it as well, as people expect big moves on way or another. So if it doesn't pan out, you will lose quite a bit especially close to expiration.



So really its a matter of your own opinion, just remember in order to profit from puts in this case, BBY has to do "extra" bad. Any sign of ok news will send this stock up.

I personally am sticking to writing calls/puts atm.



EDIT: I didn't mean this just for Best Buy either. I meant it really for all stocks. We are stock in a flat period where we are atrading from 8500-8900. About 2 weeks ago, I noticed making money on puts or calls isn't "easy money" anymore. I mean think, for a two month period DOW didn't have a 2 day winning session. Making puts almost an easy way to make money and that has changed.</blockquote>
Got my ass handed to me on those BBY puts but I balanced that off by buying QLD and picking up some SPY and QQQQ calls for today's Fed day. You feeling better?
 
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