Stock Options
- Thread starter gojo
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offroad said:
Being that we're on this subject, this might make some laugh. To me it's very interesting. Ever heard of Black Jack Card Counting. There's also stock floating shares counting. Float is shares for the public to trade.
I bot. this book at Half Price Book Store, used for a few dollars: Float Analysis..... Very interesting, it works best on small float penny stocks. You count traded shares at the end every day, when it gets near the company's amount of floating shares, you buy. They call this pump and dump, smart buyer, buy all the shares, then they start dumping. Then the greedy inexperience trader sees high volume and start buying thinking this will be the next ebay shock, buying at any price they can get in. Ever see a 50 cent penny stock shoot up to $3.00 or more and then takes a dip back to the old price, that's what's happening. Most of these trader are Market Makers, it's legal for them to do that. If it wasn't for them, there wouldn't be any market. If you know whats going on you can make money on small floating shares.
Float : Number of shares available for trading stocks.
Here's the book I bot.
Shares Outstanding : A company's stock currently held by all share holders, including insiders.
BTW: There's another story about insiders buying.
HarmonicaBruce
Well-known member
gojo said:
Ok gojo, I get it. I've seen it talked about on stock forums. But how are you going to beat the market makers? What's stopping someone from writing a program to do this automatically? I'm going to look for that book, it sounds interesting!
I'm in a strange position now, I have lots of UCO 10$ calls expiring at the end of next week. I kind of want UCO to stay under $10, so I can sell more calls and keep my stock. But, I'm money ahead if it goes back over $10. So no matter what happens, I'm happy!
UCO is definitely not a buy and hold stock. It has a 1% ER and also does not correctly track oil gains long term because it is constantly shuffling futures contracts.
I have never bought it but I can see you could some huge gains short term. Seems funny though, having call options on a already leveraged stock (2x).
I have never bought it but I can see you could some huge gains short term. Seems funny though, having call options on a already leveraged stock (2x).
HarmonicaBruce
Well-known member
IGBT said:
I've thought the same thing. If fact, I wonder if they ever trade their own stock. It does track the price of oil, but why are the premiums for calls so high? I don't get it, but I'll keep doing it as long as it keeps working. OPEC just now said oil will stay under $100 for 10 years. But, I think as soon as ISIS blows up a few oil wells or refineries we'll see the price move up.
HarmonicaBruce
Well-known member
I've got a bunch of $10 calls I sold set to expire on Friday. I'd love to have them expire worthless and keep my stock (UCO), but I'll make more money if it's over $10. It hit $10.40 today, and closed at $9.86. Either way I'm happy, but if it's over $10, I lose my stock, I'll try to wait for it to go down before buying. Hopefully below $10. But, if it closes on Friday just under $10, I can immediately sell more calls, and probably get $1 for a $10 call. So I'm having fun this week watching it.
Oh yes, and SDRL is at $15!
Oh yes, and SDRL is at $15!
Yesterday near closing, bot. BBY,May15- 36.00 PUT, for .25, today sold for .57, a profit of over 100%, excluding commission.
Yesterday near closing, bot. FB, May15- 78.50 Call, for .50, today sold for .75, a profit of 50%, excluding commission.
This is before noon, now I through working for the day.
Yesterday near closing, bot. FB, May15- 78.50 Call, for .50, today sold for .75, a profit of 50%, excluding commission.
This is before noon, now I through working for the day.
offroad
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Gojo - what value are you buying at? If someone bought with $200k would they get $400k back? Or would the stock possibly be overvalued where it would not jump up. Due to too many people selling who want to take profit.
Oh no! I see greed. You wouldn't put a $100K in one trade, would you? I have a limit on buying options. On average I buy 10 contracts, sometimes if I'm up to it, I'll buy 50. This way you can handle losses. I won't buy any that has an Open Interest below 100, but I will buy an average of 10, so I won't have liquidation problems. Near expiration, I like to buy near the money or in the money. If you go to Yahoo Finance and enter your ticker symbol and then click on options, you'll see all the contracts and volume, open interest and other info. I've noticed Yahoo isn't all that accurate. I would rather use my broker.
I could give more details why I made these trades on charts, but I noticed charts is unpopular here. So I'll let it be....
I could give more details why I made these trades on charts, but I noticed charts is unpopular here. So I'll let it be....
HarmonicaBruce
Well-known member
I hope I didn't make you think that, just because I called them tea leaves. Charts are a little controversial, seeking-alpha won't accept articles that go into chart reading. But if it works, I'd like to learn more. And float analysis as well. And "max pain" theory.gojo said:
HarmonicaBruce
Well-known member
Actually, I don't understand how anyone who doesn't have billions of dollars and rooms full of computers can make money trading options. Are we beating them in a game similar to Texas hold-em? I don't understand some of the systems work, but I know how my system works, and my system is real simple and easy to understand. So why does it work? That really bothers me.
Here's another theory. I figured out how to sell calls and make 20% return with very little risk. The people who have control of my money, and my stock while I'm waiting for the calls to expire, have figured out how to make 40% return with other people's money, namely mine. They let me make 20% so they can use my money and make more.
Here's another theory. I figured out how to sell calls and make 20% return with very little risk. The people who have control of my money, and my stock while I'm waiting for the calls to expire, have figured out how to make 40% return with other people's money, namely mine. They let me make 20% so they can use my money and make more.
HarmonicaBruce said:
No, that's not the reason, there's just not any discussions on the subject. The Float Analysis, I never tried it. Thought about trying it on small float stocks because they're easier to count, lol. If you want to find some small float stocks, then go to this site. http://www.lowfloat.com .
Look what Facebook (FB) May15 CALL Options did today. They will expire tomorrow at closing.
79.50 Call 1112.50%
80.00 Call 1750%
80.50 Call 2000%
81.00 Call 3350%
81.50 Call 3800%
82.00 Call 2200%
This was made from todays opening to closing.
gojo said:
Psh, that is nothing if you are playing weeklies on closing day. I have seen options go from $0.10 to $10 in 10 minutes when some news breaks.... 10,000% gain.
I have also heard of people buying a scratch and win ticket for a buck and winning $50k (50,000% gain!)
I am not sure why I should get called out since I never said I placed these near closing date high risk trades?
I am just saying you are pulling examples of extreme wins, like the Facebook option, but there are 1000 losers you may have also picked where you had 100% loss.
I posted one of my possible "trades". Buying a scratch and win ticket and hitting the $50,000 payday. It does happen.
The covered call selling Harmonica was doing is much safer.
I am just saying you are pulling examples of extreme wins, like the Facebook option, but there are 1000 losers you may have also picked where you had 100% loss.
I posted one of my possible "trades". Buying a scratch and win ticket and hitting the $50,000 payday. It does happen.
The covered call selling Harmonica was doing is much safer.
HarmonicaBruce
Well-known member
Well, those calls above 80.00 expired worthless. The 79.50 and 80 calls were down.gojo said:
And the $10 calls I sold expired worthless! I'll be selling some more calls next week, I'd like to see it bounce back a little first.
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