Stocks and Trading Thread - Channeling your inner Mono

[Tamas]

I would like to highlight to everyone reading that despite Yi's carefree attitude there are significant risks when playing with options.

[Admiral Yi]

There was no such speech, and I bought the call on a Wednesday with it expiring on Friday.

Wait, you bought the call or sold it?

[Admiral Yi]

I would like to highlight to everyone reading that despite Yi's carefree attitude there are significant risks when playing with options.

We've been over this.  There are huge risks buying options.  Selling them your risks are hypothetical.

[Tonitrus]

There was no such speech, and I bought the call on a Wednesday with it expiring on Friday.

Wait, you bought the call or sold it?

Sold. 

This is why I agree with Tamas.  There are indeed risks, and I will likely only ever do covered calls, and then only in cases where I am prepared to sell the stock anyway.

[Admiral Yi]

Selling cash covered puts is nice too.

[Tonitrus]

It is probably pompous, but there is a part of my psyche that thinks anything approaching short-selling is somewhat unethical. 

[crazy canuck]

The thing with the stock market is also what your objective is. An ex of mine's parents put money away for her education in some sort of conservative market vehicle. Unfortunately, she went to university right as the market cratered and she got very little out of the money her parents had diligently been putting away for a decade+ (significantly less than the principal IIRC).

If they'd sat on the investment for another five or ten years or whatever it would've turned around and they'd be ahead, most likely, but that didn't help her pay her way through school.

That's when you consider taking a loan rather than liquidating assets (not that it matters this far removed, but people should remember that taking loans is the other side of the money management coin).

They likely invested in a Register Education Savings Plan.  In concept it is a great idea because the government matches contributions up to a certain maximum.

The down side is you need to use the accumulated money for the child's post secondary education which obviously occurs during a set and small period of time.  People who thought equities were a sure bet could get badly burned.  The better approach is to take advantage of the governments subsidy and invest in a way that preserves the principle amount without too much concern for making bets on the upside.

Any funds which are unused are fully taxable in the parent's hands.  So it would not make much sense to hold on to the capital rather than spending it on its intended purpose.

[Habbaku]

With the caveat that I've not looked into that program at all, why would it not make sense to invest in equities, collect the subsidy, then, if the market is down, pay the taxes on the amount when the time comes? You've then gotten the matching on an otherwise-taxable account, which is...still pretty nice. Am I missing a detail here?

Obviously, if you can't afford to pay the taxes, that nixes the idea, but that's how I'd plan on doing things if I had access to it. 

[crazy canuck]

With the caveat that I've not looked into that program at all, why would it not make sense to invest in equities, collect the subsidy, then, if the market is down, pay the taxes on the amount when the time comes? You've then gotten the matching on an otherwise-taxable account, which is...still pretty nice. Am I missing a detail here?

Obviously, if you can't afford to pay the taxes, that nixes the idea, but that's how I'd plan on doing things if I had access to it. 

The tax is paid on the whole amount of the principle, not just the gains, if it is not used for its purpose.  And also in the hands of the parent with the highest taxable income.

Now for a low income earner the calculation might be different, especially if they are not paying tax anyway.  But for most, it would not make much sense. 

[Admiral Yi]

It is probably pompous, but there is a part of my psyche that thinks anything approaching short-selling is somewhat unethical. 

When you sell a put your counterparty is the one going short.  They are betting on a fall in price.  You are technically long, since you are contractually bound to buy the stock.

Although, your view of short selling is pretty goofy too.

[Tonitrus]

"Unethical" might be the wrong word.  I suppose I see the market as a place one should (well, make money, of course) be going to invest in companies in order to support growth/progress. 

Just going around making bets on who is going to fail, to me, feels like little more than being vulture-like.

But really, I know it's mostly a grand game...it still feels a little dirty.

[Admiral Yi]

I understand the sentiment, because I see the exact same thing at the craps table.  A lot of players get pissed when someone bets the don't pass line, especially if they're throwing.  As if that don't bet somehow affected their roll.  Jinxed them.

[Admiral Yi]

Sold 3 SQ 3/26 calls @292.50 for $845

Sold 7 NNDM 3/19 calls @20 for $81.97

I wanted to sell calls against my Viacom B and my Uber, but the bid/offer is humongous so I took that as a sign to stay away.

I talked to a bar buddy who sells a lot of options, and he says he aims for 1% return a month.  He has a Motley Fool subscription, so I imagine that's where he picked it up.

Maybe I'll see what's going on with CGC and Skechers.

[Admiral Yi]

Nope, those two are no good either.

[Tamas]

It's really annoying how hard it is made to be to anything other than basic stock buying as an europoor.

Even if I could convince myself not to gamble stupidly with my mini CFD account, I'd still like to keep it around for some shorting - I could potentially short-sell some European stocks on my regular brokerage account, but first of all who the hell wants to bother with that, and secondly, I won't do margin transactions on my account out of general principle and self-aware gambler survival instinct.

But even the CFD providers are giving you ridiculous commissions. There were no commissions just a tiny spread with the Italians I used earlier but the GME fiasco made me leave them. So I went to markets.com pretty much the only one I have found without commissions. Until now. They have introduced them for "equities" (as if this is anything else than a bet with them) and I am not even sure of the percentage (according to their support they have introduced without first updating the online documents or even letting people know) but the minimum amount is like £14. Which is just ridiculous at the play-money amounts I intend to play around with. I mean, my actual bloody stock purchases where I actually purchase something have like £0.5 commission.

So now I can try and find another provider again.