Bunch of novices? Maybe. BUT....the annual trading volume for the S&P 500 has been declining for the past twenty years. Might be why many hedge funds are closing up shop and liquidating.
I suspect you will be gambling with less "investors/traders" than you have been. Not sure who is going to sell to you since Ma and Pa left the casino a long long time ago. We even have huge public pension funds demanding a seat at the directors table to try and make management take more risky investments to increase the pension plans yield..
You sure know how to make a thread quite complicated for the average reader who doesn't need to know this stuff to get a elementary look at put options..
the angle of the dangle is equal to the square of the mass divided by the cube of....
"If I'm up a pile of $ in an investment and I want to insulate myself from a possible pullback I BUY puts."
Why would you not sell CALLS? That way YOU are pocketing the commission instead of paying out via buying puts? If the stock is called because of the underlying stock going up, so what? Now you got paid for the call and the sale of the stock? WHY PUT CAPITAL OUT WHEN YOU CAN BRING IT IN? And you still collect the divvy unless the stock gets called away before expiration ...........usually to get the divvy. Unlike European options that only get called or PUT on the day of expiration. The US Wall Street Alpha thugs just make more money the US version.
I'm trying to get you to understand there is another way to make money
I'd rather collect the $3500 in the example. How long will it take to collect $3500 of distributions with the same amount of allocated funds?
as requested by paladin and hanna on May 5 & 6
Most investors/gamblers lose money trading options. Why? Because most buy DEEP OUT OF MONEY CALLS and puts. So my #1 rule is never buy calls or puts.
The way to make money in options is to sell calls and sell puts. Preferably COVERED so one can sleep. Covered means you either own the stock with calls or you have enough capital in your account to cover the PUT option if the stock is put to you. And never sell puts on stocks you do not want to own. Just a few simple rules nets good and sometimes very fast money.
Let's say I sold 10 june 17 puts strike price $30.00 (1000 shares expiring 17 June of this year……. 1 PUT = 100 shares) on XYZ for $3.50 netting me before commissions $3500.00. Say XYZ is trading at $30.00 share so if the stock is PUT TO ME on or before expiration my cost is $26.50 a share. THAT'S assuming the stock is trading at $30 or under otherwise no one would exercise the option to PUT the stock to me. If it were PUT to me and I don't want it, just sell the stock immediately and get out of the position otherwise keep the stock at a cost basis of $26.50.Of course you can always go back into the market and close out the option by buying it back. Place order " buy to close" put position.
In any case I KEEP THE $3500.00
I hope this is a good explanation for investors on this board who want to learn a little about options trading.
Yeah! Yellen having tea with POTUS in the White House convinces me that the Federal Reserve Bank and banksters are running the country and own just about every Congress critter as well as the Supremes.
BOW DOWN TO THE INVINCIBLE POWER OF THE INVISIBLE HAND
One would think with this terrible jobs report this morning that the Dow would have collapsed.
BOW DOWN TO THE INVINCIBLE POWER OF THE INVISIBLE HAND
I will put something together this weekend for hanna and for you paladin on put options.
Even with the golden cross, the technical indicators are still pointing down. Once this correction is over, then it might become a good trade.
What is so unfortunate is that we now have a Fascist government who controls every aspect of the US economy. The whole world comes to a standstill when Grandma Yellen gets to speak. I suspect the FED now controls the President, The Congress and the Judicial. Suspect? Hell the FED does control everything as the country is bankrupt and the people of America pay interest to the bankers.
"Lamp posts pine longingly for decoration with the political class all over the nation.
The lamps are wise, like Ents, they know it's been too long, far too long.
Future generations will come to think of them as "liberation trees"."
And how many on his board expected DNLG to trade at $7.00 in January
I stick by my projection that dnlg will trade at $11.75 soon.
I would be a buyer at $9.75. And I think it will get there in the next 3 weeks or sooner. DLNG went too far too fast.
"If I didn't own so much already, this would be a buying opportunity for me as every pull-back has been hit with more buying"
NOT THIS TIME. This is probably heading back to close that gap at around $11.50.
DLNG considers all cash distributions as taxable dividends and has elected for tax purposes to issue 1099's to each shareholder. Makes it a little easier to hold in a IRA with no tax consequences.
Oh come now. Please don't tell me that charts do not work. I have been trading by charts for years. They tell me WHERE THE STOCK HAS BEEN and the indicators tell me where it is possibly going. Those indicators sometimes make fast money that I can take time away from this casino and take vacations.
I've already banked over $16.7K in the last 2 weeks selling puts on DLNG and other energy company's. I also banked another $4683.00 on Friday when my open order to sell more puts got executed 40 min before market close.
How long will it take you to bank that much money ( over 20K) collecting dividends????
and the higher DLNG goes the more puts I will sell.
Technically DLNG is extremely overbought. It's banging up against the upper Bollinger band for 11 days and the RSI has been way overbought since April 11th. Since the up move began, DNLG has run 60% +. That's since April 2. That's a hell of a move in a short period of time.
I think the next move is a long rest or a 30-50% correction of the move up. Possibly around $11.50-$13.00
THEN AGAIN I COULD BE WRONG which is why I like selling puts.
Good luck moakeybear. If you feel uncomfortable with this latest buy then sell against calls against it.
I sold calls against my total position in DLNG. I also sold puts on DLNG and sold another 10 dec 32.50 GEL for $4700.00. Lots of money going in my account on the positive side. Now over $16740.00 in puts and calls.
I think DLNG has run way too fast and far and time to take some money off the table. It would take me years holding against the distribution relative to the puts and calls income.
The coal companies were/are being put out of business because of the guy occupying the oval office. With 8 + months left in his term you won't recognize the landscape on Jan 20 2017.
BTW, George Soras is buying up the bankrupt coal company's courtesy of Obama. no doubt he and Michelle will leave the WH quite wealthy
Just buy a stock that goes up most of the time and stay away from #$%$ companies that are close to bankrupt. This company is on its last breath
I sold some puts today and made just over $3300.
I'd be a buyer in that gap around $11.55 Gaps always get filled. Tomorrow, next week , next month but they almost always get filled.
But I do think oil is going to trade under $30 if not lower by years end..