Are You Trading or Gambling?

Post by wlll » Mon, Mar 01, 2021, 6:51 PM UTC

aphextron wrote: post #349

wlll wrote: post #345

Earlier quoted context omitted.

> You buy lots of the underlying stock of something that's trending and start selling OTM "lottery ticket" contracts to the hapless fools (of which you used to be), and you finally start winning. I'm relatively new to the stock market and still learning, can you confirm I understand? You buy (say) n * 100 of the underlying, then you just sell OTM options. There's no link between the the underlying and the option, it'…

>"Your upside is that you make the premium + the strike price. You lose out if the share goes up past the strike + premium, but you win if it goes down, or not up enough?" You still "lose" in the short term if the underlying goes down more than your premium covers. That's the risk you take on writing calls; the underlying can technically go to zero. But so long as it's a decent company with real earnings or growth po…

Post by kortilla » Wed, Mar 03, 2021, 2:31 AM UTC

staticman2 wrote: post #264

kortilla wrote: post #217

Earlier quoted context omitted.

> I care if they use it to buy legislation to replace pensions with 401ks. Pensions are terrible (at least based on performance so far). Not only do they provide worse returns, many are incentivized to lock you into a specific company for many years. An friend of mine retired in 2013 and had pensions from the first 3/4 of his career and a 401k from the last 1/4. The 401k grew so much it paid out more than all of the…

You have to compare the amount of money your buddy paid into the pension plan vs 401k to even begin to do an alalysis. (With or without the 401k/ employer pension match) I have a pension and if I maxed out a 401k it would grow "bigger" but that means I'd be saving more than the pension plan payments that come from my salary require me to save.

Post by ric2b » Sat, Mar 06, 2021, 5:30 PM UTC

tekknik wrote: post #384

solosoyokaze wrote: post #323

Earlier quoted context omitted.

Hopefully less than in Feb 2021. I think a better question would be, how many BTC will it take to buy a house in 2050? I think the three things that have experienced the most drastic inflation are: housing, healthcare and education. It would be interesting to measure Bitcoin's long term value next to those highly inflating costs. Say a house now costs 10 BTC/$500,000 and in 2050 10 BTC/$2,000,000.

> Hopefully less than in Feb 2021. Financial planning -> window, cause my base currency keeps moving around and won’t hold still long enough for me to even finish the equation.

Post by ric2b » Sat, Mar 06, 2021, 5:33 PM UTC

auc wrote: post #246

BelenusMordred wrote: post #144

Earlier quoted context omitted.

You forgot no share dilution in this offtopic tangent. Every stock out there can double their issuance if they want to.

Yeah, but if they did this, they would be raising cash to deploy. Presumably in an attempt to grow their business and create actual value.

Post by benibela » Wed, Mar 10, 2021, 5:40 PM UTC

xwdv wrote: post #391

benibela wrote: post #381

Earlier quoted context omitted.

I have started doing that as well this month with CSP But the disadvantage is the limited upside. If you just buy the stock, you could have unlimited profit if the price goes to the moon, but the option only gives 1%. And you could still lose everything, if the price goes to zero

I wouldn’t advise CSPs over holding stock. Hold stock and sell covered calls. Only sell CSPS on down days below key support points in price. Back your CSPs using your margin power so your not tying up capital and have 100% equity investment in stocks, so you only go into margin if your CSP is assigned, and then you can just sell it off when the price recovers above cost basis, only costing you the interest of your ma…