Stocks and Trading Thread - Channeling your inner Mono

[MadImmortalMan]

Yep. The buyer bought the rights to the profits beyond the strike price, essentially. I am holding the stock, which can go down in value. I'm fairly sure that doing this is only worthwhile for stocks that you believe will not move much in price. I wouldn't do it with Apple or anything like that. Too volatile.

[MadImmortalMan]

I'm an expert on this.   I'm about to take my fourth investment exam.  Well, technically I'm taking the same exam for the fourth time, but still.

4th time is the charm! 

[Admiral Yi]

Yep. The buyer bought the rights to the profits beyond the strike price, essentially. I am holding the stock, which can go down in value. I'm fairly sure that doing this is only worthwhile for stocks that you believe will not move much in price. I wouldn't do it with Apple or anything like that. Too volatile.

Except that presumably call options for Apple would cost more to reflect the volatility, jah?

[DGuller]

Yep. The buyer bought the rights to the profits beyond the strike price, essentially. I am holding the stock, which can go down in value. I'm fairly sure that doing this is only worthwhile for stocks that you believe will not move much in price. I wouldn't do it with Apple or anything like that. Too volatile.

But volatility is priced in, the option costs more with higher volatility.

[MadImmortalMan]

Yep. The buyer bought the rights to the profits beyond the strike price, essentially. I am holding the stock, which can go down in value. I'm fairly sure that doing this is only worthwhile for stocks that you believe will not move much in price. I wouldn't do it with Apple or anything like that. Too volatile.

Except that presumably call options for Apple would cost more to reflect the volatility, jah?

Yes.

[Ed Anger]

I'm pleased as punch that TOT is over 60.

[citizen k]

Jim Cramer just said the UK is the most investable country on Earth thanks to the budget cuts.

[MadImmortalMan]

[Tonitrus]

So is that suggesting that silver is going to drop like a bitch in a couple years? 

[MadImmortalMan]

It bears noting that the 1980 event was a market manipulation of some sort. I can't remember exactly. Somebody cornered it or something.




Edit: found it - http://en.wikipedia.org/wiki/Silver_Thursday

[Barrister]

It bears noting that the 1980 event was a market manipulation of some sort. I can't remember exactly. Somebody cornered it or something.

Aye.  A quick summary I found with 15 secs of googling.

http://en.wikipedia.org/wiki/Silver_Thursday

All I could take from the graph is that the price of silver and the USD are entirely unrelated.

Edit: Damn you MIM!

[MadImmortalMan]

All I could take from the graph is that the price of silver and the USD are entirely unrelated.

At least since 2007 it isn't the case. They traded pretty much as mirror images once the economy got choppy until QE2 in November--when silver broke away. To me, that suggests a trend break. People trading it on Quantitative Easing (as in fact I did myself you'll recall). I think that same thinking is going to make it drop once QE is over.

[DGuller]

http://en.wikipedia.org/wiki/Silver_Thursday

The wonder of free and efficient markets. 

Trading silver now seems to me like timing an exit in a bubble.  You're not dealing with fundamentals anymore, you're dealing with what you think other people think about what other people think.

[Tonitrus]

Meh, either way, I took MiM's advice and sold off PSLV this morning at 22.90.  95%-ish percent profit is nothing to cry over.

[Caliga]

Today is a good day to own Ford.