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james1844 posted:I think how dividends are treated under short trades can be complex from an income tax point of view. So, if you're moving any volume of shares its tougher to calculate risk and return. Can definitely complicate your taxes, especially if you hold a short over the end of the year.
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Dec 20, 2014 02:12
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tbp posted:Just out of curiosity what is stopping you? The idea of going against all of the natural momentum of stocks over time. The tailwinds of inflation are aiding you in a long position; the opposite is true of a short position. Plus you have dividends to fight against and margin to hold, and the margins could tighten up and force you pile more cash in. So not only do you need to be right, you need to be right in the right amount of time. This is also why I rarely purchase options and instead sell them. Since options are naturally decaying with time, when you buy, you need to be right and be right soon, whereas when selling, like a long position, time is your ally. It's the wrong kind of risk for me. I like the idea of being right *eventually* and making money. And if I'm wrong, I'm wrong, so be it. But when I have to be right *soon* or I lose money, I don't like it. But...then there are these companies man...and everything about their valuations insult my sensibilities and I want to short them into the depths of hell.
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Dec 20, 2014 04:32
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What happens when you're wrong and writing an option? What's the difference in risk of being wrong when selling an option rather than buying one? I don't get how you go from your perspective about not wanting to have to be right soon, to writing options.
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Dec 20, 2014 04:45
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ohgodwhat posted:What happens when you're wrong and writing an option? What's the difference in risk of being wrong when selling an option rather than buying one? District Salesman may be referring to selling OTM options, but his explanation isn't quite clear. As time progresses, an option may be less likely to go ITM, but time decay doesn't really affect you since you've already collected premium and aren't affected by the effects on theta on the premium. Josh Lyman fucked around with this message at 05:03 on Dec 20, 2014 |
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Dec 20, 2014 05:00
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He's probably selling option calls on stocks he already owns and collecting the premiums, if my beginning understanding of options is helping me to understand this thread and others a little more. On that note, I have been meaning to ask the thread..500 dollar options account, good idea or bad idea, but the more I learn and the more I see how complicated options are and how many factors need to coincide to make money, it's probably very unlikely to make money within those 10 or so chances I have to make a good trade. I'm right about this aren't I? Yea I am. But has anyone here been successful with a small options account? Like, balls to the wall r/wallstreetbets type short term swing trading, not passive investing or hedging. I have a fair amount of experience day trading but I've never really made it out of the sludge and so it's not good for much. edit the biggest hamper seems to be that the account wouldn't be eligible for margin so I couldn't take ownership of ITM stock even if I wanted to. But isn't selling an ITM option before expiration generally profitable in its own right? But then there's those pesky commissions..Robinhood, save us degens the worst thing is fucked around with this message at 05:39 on Dec 20, 2014 |
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Dec 20, 2014 05:30
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ohgodwhat posted:What happens when you're wrong and writing an option? What's the difference in risk of being wrong when selling an option rather than buying one? Easy. When you buy an option and you're wrong, you lose the money you paid for it. When you write an option and you're wrong, you can lose many, many times more.
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Dec 20, 2014 05:36
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For me, if I'm not currently holding a long term sizable SPY or QQQ put at this point I feel like a dumbass. (I'm probably actually a dumbass for spending all my money on these puts and watching the market keep going up, up, up.)
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Dec 20, 2014 06:02
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nebby posted:For me, if I'm not currently holding a long term sizable SPY or QQQ put at this point I feel like a dumbass.
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Dec 20, 2014 06:04
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Yeah, I have a decent amount of cash tied up in illiquid private equity so I can justify the puts as a hedge, and not what they really are, a bet on the Don't Pass.
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Dec 20, 2014 06:07
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I sold 80% of my portfolio (which happened to be VOO) a few weeks ago because every other index was retracing and S&P was barely eking out gains. I repurchased two days ago and honestly there was probably only a few per cent in it.
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Dec 20, 2014 07:03
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a posting ghost posted:He's probably selling option calls on stocks he already owns and collecting the premiums, if my beginning understanding of options is helping me to understand this thread and others a little more. You could start with that, but you're going to be fairly limited in your trades to a bunch of deeply OTM contracts or a few ATM/ITM contracts. You could make some money but you're basically betting on a home run. I think a mistake a lot of new options traders make is buying up cheap OTM contracts with a strike price way far off of the current without calculating how much the underlying would actually have to move. quote:edit the biggest hamper seems to be that the account wouldn't be eligible for margin so I couldn't take ownership of ITM stock even if I wanted to. But isn't selling an ITM option before expiration generally profitable in its own right? But then there's those pesky commissions..Robinhood, save us degens In general, people trade the contracts themselves and never actually exercise the options.
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Dec 20, 2014 07:59
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Any reccos on a good energy ETFs to watch? Specifically oil? I've been looking at RJN, it's run down over 40%, there has to be a bottom in there somewhere.
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Dec 20, 2014 08:12
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I should have clarified, I'm writing OTM covered calls. Sometimes I write slightly in the money calls when I want to exit a position. I never write naked calls (my account isn't even setup for it, just to avoid temptation). I do write partially cash naked puts from time to time, if that's the right term. So I'll write puts that might require $8k but I only have $4k in cash in my account.
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Dec 20, 2014 16:59
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Yeah, I got the wrong impression that you were writing naked options. Your clarification brings it all together. Some people are really bad with options, I'm sorry I assumed you might be one of them. For example, we interviewed a guy who wanted to put all of his money into delta 5 strangles... A+ for risk tolerance, I guess?
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Dec 20, 2014 21:19
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Aren't puts naked unless you are also short the underlying?
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Dec 20, 2014 21:49
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You can write cash covered puts. Basically have enough cash on hand to buy the underlying if it drops below strike price.
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Dec 20, 2014 22:17
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Anyone else in GILD? Possible 2-3 billion drop in revenue because the largest pharmacy benefit manager in the US dropped them.
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Dec 22, 2014 18:58
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anyone have an idea why i can't buy any CSIQ in Robinhood? all other stocks i've tried work, but there's no "buy" option on the CSIQ card it's listed on NASDAQ so there's no way it's an exchange thing... e: for reference-  
Stuntastic fucked around with this message at 02:35 on Dec 23, 2014 |
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Dec 23, 2014 02:04
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Stuntastic posted:anyone have an idea why i can't buy any CSIQ in Robinhood? all other stocks i've tried work, but there's no "buy" option on the CSIQ card 
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Dec 23, 2014 09:39
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Josh Lyman posted:maybe they don't have any institutional clients on the other side of the trade lol
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Dec 23, 2014 09:46
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Portfolio return calculation question: Let's say I have a portfolio with a value of $10k at 12/31/2013. On 12/31/2014 I have a portfolio value of 20k, but includes a $5k cash contribution on 6/31/2014. When I calculate the yearly return, you obviously deduct the $5k from your annual dollar return (as it wasn't from the market), but how would you handle the six months of returns on that money? For example: 20-10 = $10k change in value. When calculating your dollar return you would then do 10-5=$5k return. While that accounts for your change in cash value (non-market contribution), can you say that the initial $10k returned 50% when in reality it was $10k for the first half of the year and $15k for the second half? This would potentially increase your overall percentage return (or loss). However, another way to look at it is that you are increasing your cost basis by deducting the $5k (even though it is separate), so it is acting like you had $15k all along. This would in fact dampen your overall stock return as the cash doesn't return anything for the first half of the year. Trying to benchmark even an annual return with a portfolio containing varying cash contributions is a pain in the rear end. Cheesemaster200 fucked around with this message at 01:01 on Dec 24, 2014 |
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Dec 24, 2014 00:58
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The internal rate of return might be what you're looking for, if you want some kind of average return for your portfolio. There's an excel function (XIRR).
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Dec 24, 2014 01:29
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slap me silly posted:The internal rate of return might be what you're looking for, if you want some kind of average return for your portfolio. There's an excel function (XIRR). IRR requires cash flows, and while you could probably interpolate unrealized annual capital gains as such, it would be a bear to do so when you factor in dividends, etc. I have never used it for stock returns. How would that even work too, as the capital gains would never return a positive investment in a single year (which is what I am trying to evaluate)
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Dec 24, 2014 02:45
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I guess I don't know what you're after. Maybe you just have to track basis, price, and dividends on a per-lot basis.
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Dec 24, 2014 02:52
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slap me silly posted:I guess I don't know what you're after. Maybe you just have to track basis, price, and dividends on a per-lot basis. I believe you are right with XIRR in excel. Should look like the below. 
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Dec 24, 2014 03:23
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bassadilla posted:I believe you are right with XIRR in excel. Should look like the below. Compiling transaction dates is a pain in the rear end though, and again it takes some thought to convert unrealized gains into cash flows.
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Dec 24, 2014 05:25
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It's still not clear to me what you're trying to calculate, but it's definite that you can't account for the transaction dates without accounting for the transaction dates.
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Dec 24, 2014 05:31
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The most accurate way is to compute your periodic return before the cash contribution, compute your period return after the cash contribution, multiply them, and then annualize the product.
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Dec 24, 2014 07:21
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Cheesemaster200 posted:Trying to benchmark even an annual return with a portfolio containing varying cash contributions is a pain in the rear end. I was trying to find something like this today and came up short. It's crazy how there seems like no way to take your portfolio, containing buys and sells and dividends and dividend reinvestments all on varying dates, and show some graphs with your performance. You'd think this would be a standard broker feature, but... Dr. Eldarion fucked around with this message at 10:01 on Dec 24, 2014 |
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Dec 24, 2014 09:58
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I had a friend discuss his medium-term plans with me. He's a Randian market-worshiper, but is an analyst for a Big Name Nationally in SLC and apparently makes a decent go at it. He's been posting a lot of graphs about crude/ruble recently, and I'm wondering what his angle is, but his approach seems much more conservative than the bunker-builders I've talked with in the past. He's mid-late 20's and seems to be planning okay? I don't even know with the investment stuff.quote:I don't think interest rates are going anywhere and I don't need the money any time soon so I'm staying the course, 100% equities. It'll drop, but it'll come back too. When Jan rolls around I'll put about half my Roth limit into oil & gas if it's still low and dollar cost average the rest into the S&P biweekly over 2015. I might shift into bonds but it'll take more than a correction to convince me. I'm not sure if the Fed will ever raise rates, Japan kept ZIRP for almost two decades. Plus energy supply & demand would suggest low non-core inflation for a while which helps keep CPI nice & low. Options aren't cost effective for my portfolio size or investment horizon (retirement) and leveraged inverse ETFs are sketchy as gently caress so no hedges for me. My house is my inflation hedge & I'm banking on the modern financial system still existing in 40 years (fingers crossed) so I'm gonna take my time rebalancing into fixed incomes. i say swears online fucked around with this message at 10:28 on Dec 24, 2014 |
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Dec 24, 2014 10:25
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The fed has to raise rates soon..they stopped all QE. I thought thats how it worked Since part of QE was the zero interest rates
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Dec 24, 2014 11:28
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Cheesemaster200 posted:Compiling transaction dates is a pain in the rear end though, and again it takes some thought to convert unrealized gains into cash flows. I understand why contributions/withdraws should not impact your performance, but why would you try to back out dividends and unrealized gains to count as cash flows?
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Dec 24, 2014 15:02
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Dr. Eldarion posted:I was trying to find something like this today and came up short. It's crazy how there seems like no way to take your portfolio, containing buys and sells and dividends and dividend reinvestments all on varying dates, and show some graphs with your performance. You'd think this would be a standard broker feature, but... I feel like if every time people logged in, they saw a high quality estimate of how they were doing compared to a couple of simple non-trading portfolios, brokers might lose business
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Dec 24, 2014 15:11
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bassadilla posted:I understand why contributions/withdraws should not impact your performance, but why would you try to back out dividends and unrealized gains to count as cash flows? I think the way the XIRR function works in excel, you have to have cash flows for it to calculate anything.
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Dec 24, 2014 15:17
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Is it possible that Robinhood makes money by worst-pricing you? I just bought shares and got filled a cent higher than the stock ever touched. Fuckers.. Lesson to me, don't use market orders with these guys.
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Dec 24, 2014 15:47
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a posting ghost posted:Is it possible that Robinhood makes money by worst-pricing you? I just bought shares and got filled a cent higher than the stock ever touched. Fuckers.. Lesson to me, don't use market orders with these guys. Zero Commission, not zero profit heh. Hopefully you didn't buy over 1000 shares or you got hosed big time.
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Dec 24, 2014 15:54
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Elephanthead posted:Zero Commission, not zero profit heh. Hopefully you didn't buy over 1000 shares or you got hosed big time. You knew this already.. I was wondering what their deal was. Just a hidden commission for people who don't know what a limit order is. I bought 56 shares and lost 2 dollars to them. Just a lesson learned is all. Edit - it was GTIM, i checked a few other stock apps and theres a 3 cent spread and i got filled at the ask of 6.23. Robinhoods app only shows 6.22 though. Never mind i think its just their poo poo app I would buy 1000 shares of this if i could. Im hot on the hunt for the next chipotle the worst thing is fucked around with this message at 16:10 on Dec 24, 2014 |
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Dec 24, 2014 16:01
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slap me silly posted:I feel like if every time people logged in, they saw a high quality estimate of how they were doing compared to a couple of simple non-trading portfolios, brokers might lose business That was my first thought, too, but I didn't want to immediately get all cynical. 
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Dec 24, 2014 16:26
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a posting ghost posted:You knew this already.. I was wondering what their deal was. Just a hidden commission for people who don't know what a limit order is. I bought 56 shares and lost 2 dollars to them. Just a lesson learned is all. I looked this up for fun as it's boring on the market today, and yeah your shares were executed at $6.23. Some brokers will internalize offsetting orders though and it won't show up on the official tape. code:
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Dec 24, 2014 17:01
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Cheesemaster200 posted:Portfolio return calculation question: I'd calculate your 6 month IRR on 6/30/2014 against your $10k initial investment, your 6 month IRR on 12/31/2014 on the $15k of capital you'd put up at that point, and then average the two.
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Dec 24, 2014 17:51
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