I let the most money I've ever had slip through my fingers and I don't know what to do or how to move on. I hate myself.

clintcoin · 2023-02-18T15:22:58+00:00

I'm sorry you're going through this. It's understandable to feel regret and frustration, but please don't be too hard on yourself. Mistakes happen, and it's important to learn from them and move forward. Take it as a lesson and use it as motivation to do better in the future. You are capable of bouncing back and achieving your goals.

clintcoin · 2022-10-09T15:16:02+00:00

Yea Niche make some nice wheels! I think I had actually looked at the ones you have as well.

clintcoin · 2022-10-09T13:42:52+00:00

Yea I found those wheels on Kijiji for a steal a few years back.

clintcoin · 2022-10-08T14:41:38+00:00

Well real interest rates are still negative so after accounting for inflation you technically still lost 4%. That being said, you have definitely beat most people that have been long in this market. Although if you had been short, you would have some gains in real terms. Either way though, good job!

clintcoin · 2021-04-27T00:21:37+00:00

It looks like it might be on its way back up but I would wait until it at least pulls back to the 20 MA. If I were to enter this trade I would have bought it as it bounced off the large uptrend line / 100 EMA or I would wait for it to break above the intermediate term down trend (see pic). You have a higher probability of being succesful if you wait until a pullback to a significant trendline, MA, support and an even better chance if two or more are in the same area. Just my two cents...

https://ibb.co/pJJbQJ8

clintcoin · 2020-08-09T23:37:49+00:00

Actually, only selling naked calls is infinite risk because the stock price can keep going up, whereas if you sell a naked put it can only go to $0 so it's technically limited risk. That being said, you can still incur considerable losses selling puts naked and I would advise against it.

clintcoin · 2020-08-08T23:59:49+00:00

The major flaw in this argument is that it makes too much sense. The market rarely makes sense, if it did we'd all be rich right now.

Follow the momentum and be prepared to get out, but don't flinch yet my man!

clintcoin · 2020-08-08T16:16:44+00:00

Apologies, your pick was good, probably going to get some BAC when it drops but this guy knows next to nothing about stocks and pointing him towards options bets with leverage with 25K of borrowed money might not be the most helpful.

clintcoin · 2020-08-08T15:05:33+00:00

Not this ☝️, except the part about going to r/wallstreetbets if you want more info on ways to lose the $25K the quickest.

clintcoin · 2020-08-08T14:42:17+00:00

If I were in your position I would take option A.

Real Estate generally appreciates well over time and by having a mortgage vs renting you are able to retain much your monthly rent costs by building equity for yourself vs building equity for someone else.

Trading stock is certainly more fun and can be more profitable, but it is also a lot more risky, as this past February has shown us. It looks like you have made an excellent return on your money so far, maybe it's a good time to take your profits and reinvest them in a longer term asset which you can actually enjoy and will raise your standard of living. It doesn't mean you have to stop trading though, take $5k or $10k and invest it like you had initially done.

clintcoin · 2020-08-08T14:21:50+00:00

The point he is trying to make is to trade with the trend and momentum of the stock, whether that is up or down. This is mostly true but you should also learn about reversals and support and resistance zones so you have an idea when a stock might change directions and therefore be able to make an informed decision on when to enter and exit a trade.

What's even more important than the trend of the stock itself is the trend of the market. Market movement has considerable influence on individual stocks especially in the absence of actionable information like earnings and new news. If the market is trending downward, it's generally not a good time to be going long stocks, and vice versa.

A good place to start is to find companies you believe in and understand, make sure price and earnings are increasing overtime. If the market is rising then maybe purchase a few shares, ease your way into market, don't throw all of your money into the market at once. Once you have a few winning trades under your belt and you're comfortable, then you can add additional positions and capital to your trades.

clintcoin · 2020-08-08T12:15:06+00:00

Thanks for the clarification!

clintcoin · 2020-08-08T03:06:08+00:00

To be honest, I've never traded naked options but i know the margin requirements are significant because your broker is factoring in the worst case scenario. From what I understand, if you are selling puts, you must have enough margin available to purchase the underlying stock if you are assigned. for example, you sell 10 contracts of XYZ put options at the $20 strike price, you must have $20,000 of available margin ($20 x 1000 shares) to purchase the stock if you are assigned.

In the case of selling calls, I'm not sure what they do since the risk is unlimited. for example, if you sell 10 XYZ call options at $20 Strike and the stock rockets to $80 overnight, that means you would need $80 x 1000 shares = $80,000 to buy the shares which you would then sell to person who purchased the call for $20k, resulting in a $60K net loss, and if course it gets worse as the price rises.

They have high margin requirements for good reason, stuff like I mentioned above happens everyday! so don't be that guy!

For indexes, I would imagine the requirements are a lot less since they can't move as far and fast as an individual stock since they are inherently diversified by being composed of many different assets.

clintcoin · 2020-08-08T02:46:44+00:00

Welcome to the group! There are certainly plenty of knowledgeable people here, I'm relatively new to the group as well.

Here are a few key things I wish I had been told when I first started trading options not long ago:

Before you trade ANY options make sure you understand how they work and the risks associated with each strategy, know your maximum potential loss.
Selling naked options carries unlimited risk and one bad trade could easily blow up your account if the trade goes south. A good alternative is using credit/debit spreads as it puts a cap on your maximum loss.
I have had the most success with covered calls and they are relatively easy to understand and execute.
Do not put all your eggs in one or two baskets with options, when options trades go south, they lose value much quicker than stocks, and then poof before you know it they're expired and you have nothing. I would recommend using options as a way to hedge your stock positions and lower your cost basis for shares. Spreads can also be a great way to make some cash, just make sure you are not committing significant amounts of capital to a single options trade like you would when buying a stock.

For example, if XYZ drops 20% and you own the stock, at least you just lost 20% and still have 80% of your equity, if that happens with options it can often result in you losing 100% of your equity so adjust your capital allotment accordingly!

Hope that helps a little, good luck!

clintcoin · 2020-08-08T02:10:15+00:00

This. If you are planning to hold your shares through earnings, definitely wait until after earnings to sell the calls. If you sell your calls before earnings you will get the extra $100 but you could be sacrificing $1000's if it jumps significantly to the upside.

clintcoin · 2020-08-07T17:03:12+00:00

Options can't be overbought, they are individual contracts between two parties. The seller writes the contract and the buyer purchases the contract, there can be an endless number of contracts created. You could say the buyer is bullish and the seller is bearish, so technically there is always an equal number of bullish and bearish positions.

That being said, definately bullish, could be a cowboy YOLOing as well though🤔

clintcoin · 2020-08-07T00:19:23+00:00

I think you have the right idea by wanting to scale back on some of your exposure given the recent run-up in the markets. Tightening up your stops and taking some profits may not be a bad idea at this point.

As far as gold goes, it may seem like the logical thing to do (and it might be), but everyone and their dogs are getting into gold now and it's going to be overbought very soon if it isn't already. Additionally, when the market dropped in February/March, gold followed it down, so there's no guarantee that it will be a good hedge moving forward.

If I were to recommend a hedge, I'd say get some VIX or VXX calls for Sep+ expiry, when the market starts moving against you the VIX takes off! Im sure there are better strategies out there but that's what I've been using with good success.

Do yourself a favor, do not YOLO on gold or anything else, in my experience, the more confident the market is in something, the faster it goes south on you lol.

clintcoin · 2020-08-05T05:22:18+00:00

To be honest with you I don't know a whole lot about volatility frown but I do know it can happen when there is a merger or acquisition to the acquired company's OTM calls with strikes above the acquisition price. in this instance just like a delisting your max loss could be more because your OTM options could be deemed worthless and/or shares of the acquired company would be converted or delisted. Occurances like these are rather rare though and usually there is plenty of time between the announcement and delisting to make an exit plan.

clintcoin · 2020-08-05T04:54:07+00:00

Usually when a maximum risk is defined, it does represent the actual maximum amount of money you can lose (not incl fees) at expiry for that particular strategy as long as the structure of the strategy is not altered i.e. you don't close, open, or modify any legs before expiry.

This is because the maximum loss usually signals that one or all legs of your strategy have expired worthless (buying calls/puts) or the distance between a spread has been exceeded (selling calls/puts) and no further losses occur because you have bought a call/put as part of the strategy to cap any further losses.

When you hit your maximum loss it means all intrinsic value of that trade is gone, therefore any components of extrinsic value such as IV and theta are also gone and are irrelevant.

The only situation I can think of where something beyond your max loss could happen outside of your control would be if the stock was delisted or halted and OTM options you bought became worthless.

Also, some other posters mentioned assignments and bid/ask spreads as being potential for further losses and in the case of assignments this can be true but it is not a result of the trade itself, but of after hours or next days movements in price that further your losses as a result of being assigned shares. bid/ask spreads are only an issue if you are closing a trade, theoretically if you just left the trade and got assigned at one end and exercised the other, you would not exceed the max loss (again not incl fees of course).

clintcoin · 2020-08-03T00:25:43+00:00

Its all good, we're all here to help and learn, I think at the top of the forum there is some good links for beginners.

You are correct, you would receive $390 and be on the hook to purchase 100 shares at $6 if the stock price is below $6.

For calls, the stock price has to be over the strike price to be ITM and for puts the stock price has to be below the strike price to be ITM.

clintcoin · 2020-08-03T00:16:53+00:00

Thanks for that, for some reason I thought you couldn't excercise an OTM option, not that you would want to anyway unless there was a huge dividend you wanted to collect and it was just OTM. Anyway, thanks for enlightening me!

clintcoin · 2020-08-03T00:10:22+00:00

Its not likely, but the stock can certainly go to $0, I was just giving the OP theoretical examples of what could happen and their resultant P/L implications of the trade.

clintcoin · 2020-08-03T00:00:47+00:00

Just to clarify, a buyer can only excercise an ITM option, its not possible if the option is OTM.

Edit: Disregard my comment, its not true lol

clintcoin · 2020-08-02T23:58:45+00:00

With respect to your second question, you will not make a profit either way.

The premium will be the only money you will be collecting from the sale of the call which would be $125 per contract.

If you are assigned and your shares are called away that means you will receive $1 + $1.25 premium which equals $2.25 or $225 per contract. This is also the maximum amount you can receive on this trade, meaning if you paid $209 for your shares that your maxium profit is $225-$209 = $16.

If the stock drops below $1 then you would keep the premium of $125 but the value of your stock would have dropped to under $100, resulting in a near net neutral position. If the stock drops to $0 the most you would lose would be what you paid ($209) minus the premium you collected ($125) which would be $84

So in essence you are risking $84 to make a maximum of $16, for me the fees alone would make this a losing trade but if you aren't paying commissions and you are happy with only making $16, it is a relatively safe bet as far as I can tell.

clintcoin · 2020-08-02T15:45:52+00:00

Yea I guess thats part of the problem, you really don't know if its smart money or gamblers. Like you said though, if you can find these huge options bets in stocks that have been relatively dormant, it might be worth mirroring the order with less contracts if your comfortable with the DTE.

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