I'm out of the market now.

[Leaira]

Well, I decided to cash in the rest of my stocks, gain or loss (mostly losses) cuz the market is taking another plunge today.  I pretty much lost all profits I made this year in the last 2 weeks.     I'm right back to where I was at Christmas time.

I don't think I'm gonna trade stocks anymore.  I'm gonna focus mainly on options.  I just started paper-trading them, and I'm up over 150% on the RYL June $55 put option.  I'm gonna take Market Essentials with BetterTrades in a few weeks, and they are awesome with teaching option trading.  Some of their students make millions per year.

Good luck to everyone on this board!

Leaira

[hermanpu]

best of luck to you. hope to see you back in the future.

[pappytom]

I am not out of the market.   However I did sell all my stocks with large gains heading into the May thru summer bad stock market period.   I will now take the present stock market decline to compare earnings reports with a eye on buying the big revenue growers with good earning around the 50dma.

I believe while cash is king for now one should also prepare for the next move up by buying the best opportunities during this decline.

[Livana]

Best of luck to you Leira. I'm sure you'll recover in no time.

About BetterTrades.com. Have you ever taken any of the classes/workshop offered?
I was just looking at their site and they have a bunch of free online classes... I'd like to try one to see what it's worth.

[echo]

Good luck Leaira. Don't forget you won the contest. You had success. I don't think many people are making money in this market currently. I wish you well and hope you come back to us.

[Leaira]

Livana,

Yes, I have taken several of the online free classes.  The best ones are those taught by Markay Latimer.  Her style is "trend-trading".  She buys options (not stocks themselves, but options) when the chart suggests that the stock is beginning a new trend.  Next to Markay, I would recommend Darlene Nelson who trades LEAPS options.  You can stay in those longer than short-term ones and not lose much time value.

Good luck!
Leaira

[rickjust]

hi,
wow! i am interested to know why you are not going to trade stocks anymore?
you were doing so well and would do so again . what about short trading or staying in cash until the market goes long again? why options? just curious.
thanks for your input here at 3sof,
maxi

[Leaira]

Because, as they teach you in Better Trades (and I've found out for myself), you can make at least the same profit (sometimes a lot more) with options with a lot less money at risk than if you were trading the stocks themselves.

Example (right from the free online classes): 

Let's buy 1000 shares of Boeing (BA) in early February.  Price was $71.  We put $71,000 at risk.  Most people don't have this much capital to trade with, and even if they did, you never want to put all your money onto one stock.  No more than 8%.  Hold the stock until early May at $88.  We've made a profit of 17 points, or $17,000 on the stock.  That's a 24% return.

Now, instead, let's buy 10 contracts of Boeing.  Since a contract is 100 shares, we would be controlling the same 1000 shares of stock.  Buying in-the-money $70 calls may have cost around $2.50 per share (or $250 per contract) for one with a long expiration date.  We've put $2500 at risk instead of $71,000.  In May, when the stock was at $88, the contracts would have been worth about $18.00 per share, or $1800 per contract.  The intrinsic value is the stock price minus the strike price.  Now we have a profit of $15,500 (a little less than 17,000), but don't forget we only started with $2500.  That's a 620% return!

Would you rather make 620% return, or just 24%?


Leaira

[AussieTrader]

Good luck Leaira, I trade options and for sure the gain potential is very good, but as with everything still with risk. Your Boeing example comes from the 'perfect trade' type of example, often times options can move strangely against a stock price movement or insanely ahead of it there is a lot of behind the scenes mathmatics that complicate the deal (the Greeks etc). Also choosing the right option (in the money, near the money, out the money, which strike price, which expiration date etc) also dramatically affects potential return.
Also if you buy $71K of Boeing you are not risking $71K you will be risking whatever your stop loss is + slippage and commissions (and that can be as little or as much as you want it to be).
Anyways good luck and I will look at Better Trades site as haven't come across it before.

[wchankent]

Sorry to hear you've decided to cash out of all your stocks, Leaira.

I don't yet do much trading but I still get 3sof emails once in a while and check up on the message boards now and then. When you won the stock picking contest your interview really encouraged and motivated me to spend more time studying the market and technical analysis. So thank you. 

Best of luck with options. Hopefully after a successful stint you'll be back trading stocks too.

[Lucas Scott]

Aussie - you should have mentioned our mutual friend "Serven", an options-trading guru and a legend in his own mind, who started an options trading website/service just over a year ago. By August his portfolio was down 80%. By September the site was gone.  By October the domain name was available for purchase. Options trading is a tough business. The premiums and time decay are tough opponents to beat. I've traded options from time to time, but I much prefer stocks.

[AussieTrader]

Aussie - you should have mentioned our mutual friend "Serven", an options-trading guru and a legend in his own mind, who started an options trading website/service just over a year ago. By August his portfolio was down 80%. By September the site was gone.  By October the domain name was available for purchase. Options trading is a tough business. The premiums and time decay are tough opponents to beat. I've traded options from time to time, but I much prefer stocks.

Far out, I had sort of erased that from my mind. Thanks for the reminder, it was an amazing display of someone ('legend in his own mind') imploding before our very eyes.  Yes options played incorrectly = bigger propensity for ruin than equities.

[Leaira]

That's interesting..  Sounds like Serven should take whatever money he has left and enroll in the Better Trades trading school.  If you follow the instructors carefully, do exactly what they tell you, and don't break their rules, then you won't end up like that.  The instructors are consistently profitable with options, and they make much more money than they ever could with stocks, as far as how much money they are willing to put into any trade.  On www.bettertrades.tv, you can find a sales seminar (like they put on infomercials) and that's the best place to enroll.

Since I cashed out of all my stocks Monday, the last 2 trading days have been the first 2 in two weeks that I haven't lost any money!

Aussie: On the Boeing example, if you buy the stock, you are still risking $71k cuz the company could report bad news overnight and lose 40-50% the next day.  A stop won't help you there.  In that case, a protective put would.  Puts act as insurance for stocks that you own.


Leaira

[AussieTrader]

Aussie: On the Boeing example, if you buy the stock, you are still risking $71k cuz the company could report bad news overnight and lose 40-50% the next day.  A stop won't help you there.  In that case, a protective put would.  Puts act as insurance for stocks that you own.

Leaira

Yep, that is a married PUT and I have used them before and no doubt will again.

[usedcasting]

I must say that I am very leery  about all this!
Have been for a while.
When something is to good to be true it generally is.

Good Luck!

uc.