CalGal_IHB
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Researching stocks is very time consuming. :shut:
PANDA's CHALLENGE
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I would hope so. In a way that is what I wanted to learn from this... why you did that, why didn't you do that kinda thing. So ask away, and I hope your questions get answered.
As for why I bought Goldman Sachs? You don't bet against Goldman. They prolly were short LEH on Friday and made a killing come Monday.
I like your picks. You would be diversified in Cramer's "am I diversified" contest.
I want to learn how to do the puts and calls - but I'm too nervous until I fully understand what to do.
Maybe when we see how Awgee's and Skek's turned out, we could use that as a tutorial.
You're right about GS - I was considering buying it myself, but I'm trying to stay away from any financial companies right now.
P.S. I can't stand Cramer's show. All the bells, whistles and Booyahs drive me crazy.
I like Ten's picks, but I was curious as to why he purchased Urban Outfitters. I would think their stock would go down with the economy.
But don't copy me! :coolmad: %-P
It's better that you make the mistakes with play money than your own money.
It's all fun.
Not a problem... er... well... I will do my best to make it all make sense, but no promises.
Options are essentially a bet, a bet where you can lose all your investment, unlike stocks where you lose only the difference in price from what you bought it at. I will stick with buying options vs. writing options since the game will only allow you to buy them and not write them. When you write options you can lose even more than your "investment" money.
Options are a contract, a right (call) to buy, or (put) to sell a stock. One contract is for the right of 100 shares of the stock. So a contract for the $27.50 strike BAC OCTOBER puts was trading at a price of $1.50, but one contract would cost $150.00. I bought 10 contracts (hopefully) costing me $1500.00.
Lets first discuss trading options, then at a later time I will explain exercising them. A put is a bet the stock will go down, and a call is a bet the stock will go up. So if BAC drops in price, in theory, the value of my put contracts should go up. Lets say BAC drops pretty hard tomorrow and the $27.50 October puts now trade at $2.00. If I sold my contracts for $2.00, I would have sold them for $2000.00, making me a gross profit of $500.00. If BAC runs up tomorrow, and my puts go to $1.00, then I would lose $500.00 if I sold them. Now, if I got greedy or thought that BAC was going to still go down I could wait for another day to see where my puts are trading at and sell them at a later time. If it never goes down and as time passes, then the value of the contract erodes, and this is what is know as time decay. So if BAC stayed at the same price as it is today, the puts would go down in value by the expiration date of October 17th (third Friday of the month). If they were trading at $0.08, then I would just let them expire and lose my $1500.00 plus the commission of the buying trade.
All a call is, is the opposite and hoping it will go up and not down.
I hope that helps, and feel free to ask more questions. It took me about a year of studying before I felt comfortable trading options. So you get a free crash course in a sense if you trade them.
graphrix_IHB
New member
CalGal said:
I would hope so. In a way that is what I wanted to learn from this... why you did that, why didn't you do that kinda thing. So ask away, and I hope your questions get answered.
As for why I bought Goldman Sachs? You don't bet against Goldman. They prolly were short LEH on Friday and made a killing come Monday.
I like your picks. You would be diversified in Cramer's "am I diversified" contest.
CalGal_IHB
New member
I just placed some more buy orders. Tonight I bought 3M, Monsanto, and Halliburton. I rummaged through my husband's magazines and read up on some companies, did some research, and bought away.graphrix said:
I want to learn how to do the puts and calls - but I'm too nervous until I fully understand what to do.
Maybe when we see how Awgee's and Skek's turned out, we could use that as a tutorial.
You're right about GS - I was considering buying it myself, but I'm trying to stay away from any financial companies right now.
P.S. I can't stand Cramer's show. All the bells, whistles and Booyahs drive me crazy.
I like Ten's picks, but I was curious as to why he purchased Urban Outfitters. I would think their stock would go down with the economy.
CalGal_IHB
New member
Click on their screen name.PANDA said:
But don't copy me! :coolmad: %-P
CalGal_IHB
New member
Hey, I'm up $1,600! :coolsmirk:PANDA said:
CalGal_IHB
New member
Check your PM. I sent you the password.PANDA said:
CalGal_IHB
New member
I was trying to figure out what you were doing. :coolgrin:skek said:
It's better that you make the mistakes with play money than your own money.
It's all fun.
CalGal_IHB
New member
Skek, I don't understand puts at all.
In a nutshell, can you explain what this is:
2008/09/20 Put on HALLIBURTON CO at $30.00
Does it mean that you will buy Halliburton at $30, but the order gets cancelled on 9/20 if it doesn't get down to that price?
In a nutshell, can you explain what this is:
2008/09/20 Put on HALLIBURTON CO at $30.00
Does it mean that you will buy Halliburton at $30, but the order gets cancelled on 9/20 if it doesn't get down to that price?
CalGal_IHB
New member
LOLskek said:
CalGal_IHB
New member
Thanks, but in this market it could be blood red tomorrow. :coolgrin:skek said:
graphrix_IHB
New member
Well... I put in some serious anti-panda orders today in after hours. UUP dollar bull, DTO double short oil, DRR double short euro, and EEV ultra short emerging markets. I also have a limit order on SDS, and I placed an order for the OCTOBER 27.50 puts on BAC. Unlike skek, I realize that it is 2008 not 2007, and that options expire on third Friday of the month. ;-P But, at least we get to learn with play money.
CalGal_IHB
New member
Graph, can you dummy down an option order placement so I can understand what you did.
If possible, can you give me one example of the option order and what you hope happens with that order.
Thanks!
My husband said he won't help me because he said I won't let him live it down if something turns the wrong way (he's probably right). 8-/
If possible, can you give me one example of the option order and what you hope happens with that order.
Thanks!
My husband said he won't help me because he said I won't let him live it down if something turns the wrong way (he's probably right). 8-/
graphrix_IHB
New member
CalGal said:
Not a problem... er... well... I will do my best to make it all make sense, but no promises.
Options are essentially a bet, a bet where you can lose all your investment, unlike stocks where you lose only the difference in price from what you bought it at. I will stick with buying options vs. writing options since the game will only allow you to buy them and not write them. When you write options you can lose even more than your "investment" money.
Options are a contract, a right (call) to buy, or (put) to sell a stock. One contract is for the right of 100 shares of the stock. So a contract for the $27.50 strike BAC OCTOBER puts was trading at a price of $1.50, but one contract would cost $150.00. I bought 10 contracts (hopefully) costing me $1500.00.
Lets first discuss trading options, then at a later time I will explain exercising them. A put is a bet the stock will go down, and a call is a bet the stock will go up. So if BAC drops in price, in theory, the value of my put contracts should go up. Lets say BAC drops pretty hard tomorrow and the $27.50 October puts now trade at $2.00. If I sold my contracts for $2.00, I would have sold them for $2000.00, making me a gross profit of $500.00. If BAC runs up tomorrow, and my puts go to $1.00, then I would lose $500.00 if I sold them. Now, if I got greedy or thought that BAC was going to still go down I could wait for another day to see where my puts are trading at and sell them at a later time. If it never goes down and as time passes, then the value of the contract erodes, and this is what is know as time decay. So if BAC stayed at the same price as it is today, the puts would go down in value by the expiration date of October 17th (third Friday of the month). If they were trading at $0.08, then I would just let them expire and lose my $1500.00 plus the commission of the buying trade.
All a call is, is the opposite and hoping it will go up and not down.
I hope that helps, and feel free to ask more questions. It took me about a year of studying before I felt comfortable trading options. So you get a free crash course in a sense if you trade them.