Liberal Forum

LowIQTrash » 11 Sep 2024, 12:01 pm » wrote: ↑

11 Sep 2024, 12:01 pm

I play OTM but I should be doing at least 50/50.

Yes, I imagine I am no longer a beginner…I would never do one of those WallStBet type plays where they gamble everything on earnings and then either brag about +300% in one day or post losses of 90% 

I would say the biggest lesson I’ve learned is to wait for the price to drop to an area I predict and then wait for confirmation for a reversal before entering. If I hastily rush into something out of frustration it almost always ends badly

For example, right now crude oil is taking a beating, but I do not think this will continue for much longer (Price of oil almost always drops before an election, go figure).

Crude will make new highs in 2025 (my prediction), lifting all oil sector stocks.

So I have a price target around $42 for OXY, an excellent entry point.

If 50/50 is what you know you should be doing,  why not follow that parameter? Could you explain why you should be doing 50/50? You have absorbed plenty of information and advice over the last year or so, some good, some bad.
Just wondering what makes a trader not follow what he knows is a reasonable guideline.

I like the OXY play. These guys agree from an investment position.
https://www.fool.com/investing/2024/09/ ... eum-stock/

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Fuelman » 11 Sep 2024, 2:48 pm » wrote: ↑

11 Sep 2024, 2:48 pm

If 50/50 is what you know you should be doing,  why not follow that parameter? Could you explain why you should be doing 50/50? You have absorbed plenty of information and advice over the last year or so, some good, some bad.
Just wondering what makes a trader not follow what he knows is a reasonable guideline.

I like the OXY play. These guys agree from an investment position.
https://www.fool.com/investing/2024/09/ ... eum-stock/

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When money is involved there is always going to be a deluge of emotion. Disentangling emotion is difficult.

Nobody wants to spend hours or days doing research, only to enter at a slight imperfection in time and see their options lose 20% despite the stock only going down 3.5%, and then have to constantly second guess if their hypothesis was wrong all along.

For example, I already have an idea of how September will play out but I will only size a small % of options in. This is because the reward is moderate and I don’t want to miss the forest (the “melt up” coming in).

There is also the issue of timing an exit. If your calls are up 45%, do you just sell or hope for 200%?

As for OTM / ITM, I always have the optimistic view it will hit my target. Whether I end up holding -30% swings to +150% is another matter…

I like the litmus test: If you can sleep at night and not think about the options you bought, it’s likely a good buy. 

(Selling options on the other hand is far safer and is designed to generate passive income, but works better with portfolios > $700K) 
 

LowIQTrash » 11 Sep 2024, 6:18 pm » wrote: ↑

11 Sep 2024, 6:18 pm

When money is involved there is always going to be a deluge of emotion. Disentangling emotion is difficult.

Nobody wants to spend hours or days doing research, only to enter at a slight imperfection in time and see their options lose 20% despite the stock only going down 3.5%, and then have to constantly second guess if their hypothesis was wrong all along.

For example, I already have an idea of how September will play out but I will only size a small % of options in. This is because the reward is moderate and I don’t want to miss the forest (the “melt up” coming in).

There is also the issue of timing an exit. If your calls are up 45%, do you just sell or hope for 200%?

As for OTM / ITM, I always have the optimistic view it will hit my target. Whether I end up holding -30% swings to +150% is another matter…

I like the litmus test: If you can sleep at night and not think about the options you bought, it’s likely a good buy. 

(Selling options on the other hand is far safer and is designed to generate passive income, but works better with portfolios > $700K)

It's one of the hardest things for beginners to overcome, the emotional attachment to that money. It's not easy to come up with that initial deposit into a trading account. It would be nice to get the mind to just write that money off in the beginning, easier said than done!

I have no idea how many calls you are buying at any given time but if they are up 45%, I would exit a portion of them and let the rest ride if you still believe in the position. Capital preservation means you live to trade another day.

Hope you kill it going into the end of the year, I would be happy with another 10% boost for this year.

Impressive comeback on the Dow yesterday.
 

Fuelman » 12 Sep 2024, 9:29 am » wrote: ↑

12 Sep 2024, 9:29 am

It's one of the hardest things for beginners to overcome, the emotional attachment to that money. It's not easy to come up with that initial deposit into a trading account. It would be nice to get the mind to just write that money off in the beginning, easier said than done!

I have no idea how many calls you are buying at any given time but if they are up 45%, I would exit a portion of them and let the rest ride if you still believe in the position. Capital preservation means you live to trade another day.

Hope you kill it going into the end of the year, I would be happy with another 10% boost for this year.

Impressive comeback on the Dow yesterday.

There are too many little details for me to explicate. It's really mind boggling.

I encountered this very useful post by someone on Twitter:

=============================================

- bitcoin miners only shares, never options
- for put selling semiconductors/FAANG names only
- software buy 20/30% dips, and sell after similar size rips
- fintech will always be trash, but excellent for scalps
- best market beta risk evaluation name watch is $AMD
- 90% of biotech, and individual small cap names are garbage, direct indices play better for most
- you're too stupid for metals and industrials, skip these sectors
- healthcare way too boring, don't touch
- regardless of what I wrote and what you do, in the end you will always come back to semiconductors and software, no matter how much you don't want to

=============================================

And indeed, he is correct. Playing indices or software/tech/semiconductors is the best option for most people, esp. beginners. Much more predictable. 

Turns out metals is one of the worst sectors for people without an insane amount of experience. I had extraordinary luck with Silver, the good luck ran out...

Good luck is actually a curse - once it runs out then you're in deep doodoo.    

A life lesson you probably already knew!


 
 

Fuelman » 12 Sep 2024, 9:29 am » wrote: ↑

12 Sep 2024, 9:29 am

It's one of the hardest things for beginners to overcome, the emotional attachment to that money. It's not easy to come up with that initial deposit into a trading account. It would be nice to get the mind to just write that money off in the beginning, easier said than done!

I have no idea how many calls you are buying at any given time but if they are up 45%, I would exit a portion of them and let the rest ride if you still believe in the position. Capital preservation means you live to trade another day.

Hope you kill it going into the end of the year, I would be happy with another 10% boost for this year.

Impressive comeback on the Dow yesterday.

Hmm…

 


https://m.youtube.com/watch?v=IhcTyVOEm-0&pp=ygULQ3VkZGx5IGJlYXI%3D
 

LowIQTrash » Today, 3:38 am » wrote: ↑

Today, 3:38 am

Hmm…

 

https://m.youtube.com/watch?v=IhcTyVOEm-0&pp=ygULQ3VkZGx5IGJlYXI%3D

    Awe, cute little bears just waiting to rip your throat out and take some of your monopoly money !

Impressive open in the markets this morning!

I hope you were ready for this, cha-ching!

Fuelman » Today, 9:11 am » wrote: ↑

Today, 9:11 am

Impressive open in the markets this morning!

I hope you were ready for this, cha-ching!

I was. Never size big when the market’s at an inflection point…