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 3 years ago '08        #2381
o7media 34 heat pts34
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$26,055 | Props total: 3908 3908
Strong finish on NRG. I may re enter with a calendar spread at the end of the month depending on how it closes.
 3 years ago '04        #2382
LikeABoss38701 4 heat pts
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$1,986 | Props total: 270 270
What's the best site to use to trade stock?

Where do I go to get a clear understanding of investing?
 3 years ago '08        #2383
o7media 34 heat pts34
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$26,055 | Props total: 3908 3908
 LikeABoss38701 said:
What's the best site to use to trade stock?

Where do I go to get a clear understanding of investing?
There are a lot of brokerages to choose from. The more popular ones are Etrade, TDAmeritrade, Schwab, etc. I'm with etrade.

Check out for educational info.
 3 years ago '08        #2384
o7media 34 heat pts34
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$26,055 | Props total: 3908 3908
I also grabbed ED April 52.50x puts earlier today at .35. Huge buyers came in on it. Should re test the $53 support within the next 2 weeks.
 3 years ago '13        #2385
Gman8677 1 heat pts
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$354 | Props total: 0 0
would investing money into oculus rift stocks be wise? for those that dont know, oculus rift is a virtual reality headset that could change the game forever. video games, pr0n, movies, etc.
 3 years ago '08        #2386
o7media 34 heat pts34
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$26,055 | Props total: 3908 3908
 Gman8677 said:
would investing money into oculus rift stocks be wise? for those that dont know, oculus rift is a virtual reality headset that could change the game forever. video games, pr0n, movies, etc.
They're not publicly traded so...

But I personally think it's ahead of its time
 3 years ago '08        #2387
o7media 34 heat pts34
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 o7media said:
I also grabbed ED April 52.50x puts earlier today at .35. Huge buyers came in on it. Should re test the $53 support within the next 2 weeks.
ED downgraded from overweight to equalweight at Barclays this morning. That explosion in NY yesterday was because of a gas leak by ED's line.

Gapping down below yesterday's low. I'll look to take profits on my puts today if I see .50 - .55.
 3 years ago '08        #2388
o7media 34 heat pts34
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$26,055 | Props total: 3908 3908
Sold ED at .55 from .35 for +57% ... got up to .70 after I sold
 3 years ago '08        #2389
o7media 34 heat pts34
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$26,055 | Props total: 3908 3908
Grabbed some KR calls. Huge buyer last Friday on the April 46's.
 3 years ago '08        #2390
o7media 34 heat pts34
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 o7media said:
I also grabbed ED April 52.50x puts earlier today at .35. Huge buyers came in on it. Should re test the $53 support within the next 2 weeks.
Got down to $53.12 and bounced ..not bad
 3 years ago '04        #2391
unphaseable338 
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o7......what would you advise... I got $1,000 gift that I want to pretend I never received. What I mean is I just want to put it away for a whole and let it work for me. I plan on moving in august and will put the money towards that and thought about just putting it into a savings account or a short term CD but rates are so low these days it's not even worth it. What would you advise I invest in? Or do you even think that's a good idea? Would a index fund or mutual fund be the wisest option? Thanks for any knowledge you can provide!
 3 years ago '08        #2392
o7media 34 heat pts34
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 unphaseable338 said:
o7......what would you advise... I got $1,000 gift that I want to pretend I never received. What I mean is I just want to put it away for a whole and let it work for me. I plan on moving in august and will put the money towards that and thought about just putting it into a savings account or a short term CD but rates are so low these days it's not even worth it. What would you advise I invest in? Or do you even think that's a good idea? Would a index fund or mutual fund be the wisest option? Thanks for any knowledge you can provide!
Gonna be a long read...

Like you said putting it in a savings account or CD isn't worth it with rates below 1%. Honestly putting it in any type of fund you won't make much either on $1k even if the markets performed the way they did last year (about a 30% return).

If I were you I'd buy a cheap stock that is optionable, something you can get at least 100 shares of with $1k and then write covered OTM (out-of-the-money) calls against it. So basically look at stocks under $10 in order to get at least 100 shares. It's literally free money.

But again with such a small investment you won't make much short term, however you could turn it into a decent amount long term if you do this strategy every week/month.

So basically how it works is for every 100 shares of a stock you own you can write (sell) 1 call contract which is covered, meaning you own the stock. So take AMD for example (Advanced Micro Devices), it's currently trading at $3.80. With $1k you could buy about 260 shares giving you the power to sell 2 option contracts with the 60 shares left over.

Because AMD's stock is so cheap and isn't that volatile the premiums on the options are low too, so you will collect very little with only 2 contracts. AMD has weekly and monthly options also for you to choose from to write, but will likely have to go with monthly's to make any money after commissions.

AMD April 19th $4 calls are worth about .18 now ($18). So you could sell 2 contracts at $18 and collect $36 in premium minus about $10 in commissions. So you'd make about $26 on those.

Here's why there's no risk in it. If the stock expires above $4 by expiration you would have to sell your 200 shares at $4 per share no matter what the current price of the stock is. If AMD's stock is trading at $5 by April 19th then you still have to sell your shares at $4 and you lose the $1 per share on 200 shares... BUT, you own the stock at $3.80 so you would still make .20 cents per shares. You wouldn't take a loss, you just wouldn't make as much if you hadn't written the calls, plus you still get to keep that $36 premium (minus fees).

On the other hand if the stock finishes below $4 by April 19th then you simply let those calls expire worthless and you collect the full premium of them ($18 per contract you write). If the stock falls below your buy price ($3.80) then obviously you'd lose on your initial investment but you can keep writing calls to make that money back.

So say it finishes below $4 by April 19th then you collect the $36 minus fees and then you can write 2 more covered calls and collect another $36 or whatever the premium is going for at that time and you can keep doing this as long as you own the stock. So over time it will add up.

With those profits from the covered calls you can also just buy more AMD stock and build your stock position up to where you can write more and more calls. To write 3 calls you'd need 300 shares, 4 calls 400 shares, etc etc. and you'd make more money each time from there on out when you write the calls.


Research covered call writing and read up a bit on it if what I said wasn't clear. Also if you're looking for a cheap stock that has options here is a quick screener I setup on Finviz to weed them out for you. It's set at stocks trading between $5 - $10 that are optionable:

 3 years ago '04        #2393
unphaseable338 
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Wow. that is some amazing information. Thank you so much man, i really appreciate that.

a couple questions..so, going with the same example you had used, if the stock does fall below the $3.80 and i allow the call to expire, would I lose all but the premiums paid? you stated that I would still own the stock so does that just change my strike price if i decide to write another call?

would you suggest incorporating a put as well to defend against a lose or is that not recomended for such a small amount?
 3 years ago '08        #2394
o7media 34 heat pts34
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 unphaseable338 said:
Wow. that is some amazing information. Thank you so much man, i really appreciate that.

a couple questions..so, going with the same example you had used, if the stock does fall below the $3.80 and i allow the call to expire, would I lose all but the premiums paid? you stated that I would still own the stock so does that just change my strike price if i decide to write another call?

would you suggest incorporating a put as well to defend against a lose or is that not recomended for such a small amount?
No problem..

No if the stock falls below $3.80 you lose money on your stock position because you own it at $3.80. You make 100% profit on the calls that you wrote/sold if it stays below $4 by the expiration date. The calls will expire worthless, that's what you want. The buyer who bought them from you will lose 100% of his investment.

For the calls to have any value by expiration the stock needs to be above the strike price ($4) if it's below $4 they're worthless.

You can sell the calls at any strike price you want. The closer the strike price is to the current price of the stock, the more the call option is worth as it has a greater chance of going ITM (in-the-money) which means going above the strike price. So if the stock falls to $3 you could sell the $3.50 calls next time instead of $4 calls because you wouldn't make much on the $4 calls.

However, if you sell a call with a lower strike price than your entry point on the stock then you risk the chance of losing money on your stock's principal. So if you sell the $3.50 calls while owning the stock at $3.80 and it goes ITM then you'd have to sell your shares at $3.50 and take the .30 cent loss per share on your stock. But again you'd keep the premiums from the sale of the calls so it wouldn't be a complete loss. And if you do it for a few months you'd cover losses in the event that you did take a loss on the stock.

Also no I wouldn't recommend buying puts for downside protection because you don't have an expiration date on the stock, it doesn't matter if it sells off short term because you can continue to keep writing calls and collecting money from that. Over time you'll make enough to cover your initial $1k investment in the stock so it's like owning it for free.


Last edited by o7media; 03-18-2014 at 12:24 PM..
 3 years ago '04        #2395
unphaseable338 
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 o7media said:
No problem..

No if the stock falls below $3.80 you lose money on your stock position because you own it at $3.80. You make 100% profit on the calls that you wrote/sold if it stays below $4 by the expiration date. The calls will expire worthless, that's what you want. The buyer who bought them from you will lose 100% of his investment.

For the calls to have any value by expiration the stock needs to be above the strike price ($4) if it's below $4 they're worthless.

You can sell the calls at any strike price you want. The closer the strike price is to the current price of the stock, the more the call option is worth as it has a greater chance of going ITM (in-the-money) which means going above the strike price. So if the stock falls to $3 you could sell the $3.50 calls next time instead of $4 calls because you wouldn't make much on the $4 calls.

However, if you sell a call with a lower strike price than your entry point on the stock then you risk the chance of losing money on your stock's principal. So if you sell the $3.50 calls while owning the stock at $3.80 and it goes ITM then you'd have to sell your shares at $3.50 and take the .30 cent loss per share on your stock. But again you'd keep the premiums from the sale of the calls so it wouldn't be a complete loss. And if you do it for a few months you'd cover losses in the event that you did take a loss on the stock.

Also no I wouldn't recommend buying puts for downside protection because you don't have an expiration date on the stock, it doesn't matter if it sells off short term because you can continue to keep writing calls and collecting money from that. Over time you'll make enough to cover your initial $1k investment in the stock so it's like owning it for free.

I cant thank you enough for the info. I am definitely going to do some more research and make a decision on what stock to try this approach with . Thanks again my man!
 3 years ago '08        #2396
o7media 34 heat pts34
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 unphaseable338 said:
I cant thank you enough for the info. I am definitely going to do some more research and make a decision on what stock to try this approach with . Thanks again my man!
 3 years ago '08        #2397
o7media 34 heat pts34
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$26,055 | Props total: 3908 3908
NRG sold too early
 3 years ago '08        #2398
o7media 34 heat pts34
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$26,055 | Props total: 3908 3908
NRG almost $31 ..hope some of y'all still have it
 3 years ago '08        #2399
o7media 34 heat pts34
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Letting my short GDP March 17.50x calls expire worthless for a .10 credit. Still long with the April calls, holding over the weekend.
 3 years ago '08        #2400
o7media 34 heat pts34
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$26,055 | Props total: 3908 3908
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