Brian Earl Spilner said:
That said, still sitting on way more cash than usual in case it does happen.
That's where I'm at and I'm frustrated that I'm doing this while the market explodes.
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Last: 1 hr ago by Heineken-Ashi
That's where I'm at and I'm frustrated that I'm doing this while the market explodes.
You need to seriously have a come to Jesus moment about your love for leveraged plays. Long term they are punishing more than they are good.Brian Earl Spilner said:
Right now it's the FOMO that's getting the best of me. It's so hard to sit on the sidelines while we just keep making new highs. But I nibble on days like yesterday.
Tough to know what stops to set for leveraged plays like TNA, TQQQ, and SSO.
Amen. These are not investable instruments. They are intended to be ultra-short-term trading vehicles or hedges.Heineken-Ashi said:You need to seriously have a come to Jesus moment about your love for leveraged plays. Long term they are punishing more than they are good.Brian Earl Spilner said:
Right now it's the FOMO that's getting the best of me. It's so hard to sit on the sidelines while we just keep making new highs. But I nibble on days like yesterday.
Tough to know what stops to set for leveraged plays like TNA, TQQQ, and SSO.
For most, just stay away.
no kidding...I'm halfway kidding, but I'd rather sell naked calls on TQQQ then own that ETF at these levels...
How are they different than options though?Heineken-Ashi said:You need to seriously have a come to Jesus moment about your love for leveraged plays. Long term they are punishing more than they are good.Brian Earl Spilner said:
Right now it's the FOMO that's getting the best of me. It's so hard to sit on the sidelines while we just keep making new highs. But I nibble on days like yesterday.
Tough to know what stops to set for leveraged plays like TNA, TQQQ, and SSO.
I never hold them long term.
Quote:
LETFs are typically used by day traders speculating on an index or other targeted sets of assets. It is difficult to hold long-term investments in LETFs because the derivatives used for the leverage are not long-term investments. As a result, traders often hold positions in LETFs for day trading.8
These ETFs should not be used for long-term strategies since they're anchored in techniques for returns within a trading day, not a longer time, and the daily reset means the fund can't build on itself.
Leveraged ETFs: The Potential for Bigger Gainsand Bigger Losses (investopedia.com)Quote:
An LETF applies derivatives to magnify the exposure to a particular index or other targeted asset (stocks, cryptocurrency, commodities, etc.).10 It does not aim to amplify the monthly or annual returns of the target assets but instead tracks daily changes, resetting each day.8
The leverage in LETFs comes from several sources. First, it can come from borrowing. For instance, the fund that aims to have twice the return of the targeted assets might take your invested funds and then borrow the same amount to effectively double how much is invested.11 LETFs also employ derivatives like forward contracts, futures contracts, total return swaps, and, less frequently, options:
Options results mirror the underlying. They are absolutely risky which is why you should only employ them in high probability setups. LETF's are not meant to go up over time. They are merely meant to try to maximize each day's move. As such, if you are holding them over night, you are exposing yourself to massive potential decay that outpaces options decay. Better be right over 75% of the time.
Right, decay is a factor, thus why I never hold long term. But it seems to me options are equally risky.
In fact my understanding is leveraged ETFs are using options to leverage the underlying index.
I guess I'm not understanding why you feel trading options daily is any less risky than leveraged plays.
In fact my understanding is leveraged ETFs are using options to leverage the underlying index.
I guess I'm not understanding why you feel trading options daily is any less risky than leveraged plays.
LETF's use derivatives of all types, not just options. They are literally meant for day trading to amplify a move. Whereas an option can still recover from a drawdown, an LETF might not as the basket of derivatives is punished hard in a draw down and then reset the next day.Brian Earl Spilner said:
Right, decay is a factor, thus why I never hold long term. But it seems to me options are equally risky.
In fact my understanding is leveraged ETFs are using options to leverage the underlying index.
I guess I'm not understanding why you feel trading options daily is any less risky than leveraged plays.
As for me, I don't trade options daily. I trade options when I see setups I like. Might go weeks without trading any. But I know it's going to match the underlying and I know where my targets are and when it fails. I don't know that with LETF's. And by the time the underlying fails, the LETF has lost double or triple. Because it doesn't track the underlying. Again, it's using debt to magnify a potential daily move before reset.
So I'm a sprinkler head . . . CXM that is . . . been a good, steady play coming out of a bad December. Slowing growth was mentioned for 2024. Thanks for the heads up on this one.Heineken-Ashi said:It's not. Risk management is key. But no reason to stop playing as long as you have your R/R identified.Philip J Fry said:
This market just doesn't feel sustainable.
South Platte said:So I'm a sprinkler head . . . CXM that is . . . been a good, steady play coming out of a bad December. Slowing growth was mentioned for 2024. Thanks for the heads up on this one.Heineken-Ashi said:It's not. Risk management is key. But no reason to stop playing as long as you have your R/R identified.Philip J Fry said:
This market just doesn't feel sustainable.
My approach is trade only what I understand and can explain to The Rib. I have felt FOMO for too long, but now getting some good experience thanks to you guys! There is also FOMM (Fear Of Making Mistakes) that comes from inexperience, so I'm playing small ball for a while.
My biggest question is mainly where best to park cash while it sits on the sidelines in 401k's and Roth IRA's. Has to be highly safe from a major event, and the talk of banks being in precarious positions earlier makes me stop and think.
Like Bonfire explained a couple days ago, go talk to your bank president. Ask about their CRE exposure and what % is at risk. Ask about their treasury mark to market exposure in times of liquidity crunch. Ask what their rates are on cds.
Here's my issue and I'm not sure what the solution is besides simply investing with confidence and sticking to the plan.
I have about 50K in my etrade account that I consider savings outside of retirement. It's fun money for when I want to buy a new house or upgrade our kitchen. Of the 50K, 25k Is in QQQ and SPY and my plan is to add $500 weekly to one of these regardless of what the market is doing. Now for the other 25K…
More times than not, I will pick a winning stock position. I'll play with small 500 dollar investments (stocks only. I have a mental block with options). I'll have a few 10-20% winners and convince myself I know what I'm doing. So I'll risk a little more and find I simply cannot stomach a 5% loss. Even though I know timing the exact bottom is foolish. I'll end up setting my stop loss too tight to it'll allow it some breathing room. Something I don't do with the smaller buys. Almost guarantees a loss with such a tight stop loss.
I have almost the opposite problem when it goes up. I'll be too quick to exit to secure my profits and proceed to watch it take off.
Off the top of my head:
DNN, SMCI, APP, STNG, MARA (back when it was $3.), WHD (when it was 35 2 years ago and shot up 57.)…there's at least 4 more I can't think of at the moment.
Pretty much any one of these were 2X or more moves than I actually timed right, but chickened out prematurely.
I have about 50K in my etrade account that I consider savings outside of retirement. It's fun money for when I want to buy a new house or upgrade our kitchen. Of the 50K, 25k Is in QQQ and SPY and my plan is to add $500 weekly to one of these regardless of what the market is doing. Now for the other 25K…
More times than not, I will pick a winning stock position. I'll play with small 500 dollar investments (stocks only. I have a mental block with options). I'll have a few 10-20% winners and convince myself I know what I'm doing. So I'll risk a little more and find I simply cannot stomach a 5% loss. Even though I know timing the exact bottom is foolish. I'll end up setting my stop loss too tight to it'll allow it some breathing room. Something I don't do with the smaller buys. Almost guarantees a loss with such a tight stop loss.
I have almost the opposite problem when it goes up. I'll be too quick to exit to secure my profits and proceed to watch it take off.
Off the top of my head:
DNN, SMCI, APP, STNG, MARA (back when it was $3.), WHD (when it was 35 2 years ago and shot up 57.)…there's at least 4 more I can't think of at the moment.
Pretty much any one of these were 2X or more moves than I actually timed right, but chickened out prematurely.
Thanks, but was thinking more in terms of the cash positions at the etrades, fidelity, etc.
As far as banks, I'm in the "too big to fail" types. Not sure if I can sit down with their presidents. Perhaps I need to move to somewhere smaller.
As far as banks, I'm in the "too big to fail" types. Not sure if I can sit down with their presidents. Perhaps I need to move to somewhere smaller.
How many stocks are on your primary focus list that you monitor everyday?Philip J Fry said:
Here's my issue and I'm not sure what the solution is besides simply investing with confidence and sticking to the plan.
I have about 50K in my etrade account that I consider savings outside of retirement. It's fun money for when I want to buy a new house or upgrade our kitchen. Of the 50K, 25k Is in QQQ and SPY and my plan is to add $500 weekly to one of these regardless of what the market is doing. Now for the other 25K…
More times than not, I will pick a winning stock position. I'll play with small 500 dollar investments (stocks only. I have a mental block with options). I'll have a few 10-20% winners and convince myself I know what I'm doing. So I'll risk a little more and find I simply cannot stomach a 5% loss. Even though I know timing the exact bottom is foolish. I'll end up setting my stop loss too tight to it'll allow it some breathing room. Something I don't do with the smaller buys. Almost guarantees a loss with such a tight stop loss.
I have almost the opposite problem when it goes up. I'll be too quick to exit to secure my profits and proceed to watch it take off.
Off the top of my head:
DNN, SMCI, APP, STNG, MARA (back when it was $3.), WHD (when it was 35 2 years ago and shot up 57.)…there's at least 4 more I can't think of at the moment.
Pretty much any one of these were 2X or more moves than I actually timed right, but chickened out prematurely.
When I have the free time to look at candidates, 3-4.
Thanks, I was asking because I was hoping you didn't have 100 on your primary focus list because that's way too many. Some people try to follow a lot and spread themselves too thin, that leads to losses.Philip J Fry said:
When I have the free time to look at candidates, 3-4.
Have a good weekend everyone. I'll have some weekend reading tonight or tomorrow about trading indicators and studies as promised.
Thanks to H-A and ProgN. They have helped me make some money in the last 2 years or so. As did OA.
Let's BTHO UF!
Let's BTHO UF!
Futures are easier than options, just FYI.
Heineken-Ashi said:$5.35. Below that and it starts to enter into territory that chopped around last year.AgCPA95 said:bhanacik said:Similar to Prog's callout on POWL; I'm seeing that Blackrock increased their holdings of BIG to 7.9% on 1/26. They have earnings on 2/29, so might be something to watch.Heineken-Ashi said:
BIG has entered the buy zone. Stop $5.35. Would wait for a low to form and a move off of it that looks constructive.
Target min - $10.25
Target mac - $15.50
Are we seeing support on $BIG around $5.60?
BIG = Big Lots?
There's another BIG but it's a technology company.
Pop quiz fam, what's your take away from the big red candles and jump in selling pressure the last 30 mins of the day? The SPX was more than likely going to hit 5,000 with a strong close, but reversed hard when news came out we bombed Iran proxies who had a 5 day warning we decided to respond to Iran for killing 3 soldiers. If anyone was killed or anything of importance was destroyed then they deserve it for being f'ing morons. They had 5 days to get out and take anything of value. It was theater, it wasn't a response. A real response would've been immediate and without warning.
The selloff wasn't algos because it wasn't severe enough. I'm curious what you interpreted and I'll post mine after others provide theirs.
The selloff wasn't algos because it wasn't severe enough. I'm curious what you interpreted and I'll post mine after others provide theirs.
Are you referring to $BIGC ?Bird Poo said:Heineken-Ashi said:$5.35. Below that and it starts to enter into territory that chopped around last year.AgCPA95 said:bhanacik said:Similar to Prog's callout on POWL; I'm seeing that Blackrock increased their holdings of BIG to 7.9% on 1/26. They have earnings on 2/29, so might be something to watch.Heineken-Ashi said:
BIG has entered the buy zone. Stop $5.35. Would wait for a low to form and a move off of it that looks constructive.
Target min - $10.25
Target mac - $15.50
Are we seeing support on $BIG around $5.60?
BIG = Big Lots?
There's another BIG but it's a technology company.
Perhaps. Someone mentioned earlier that Blackrock increased their position in BIG. Just wanted to make sure they were referring to Big Lots because I can't find that news anywhere.
Ah, that wasn't me but I somewhat remember seeing a post like that.
High volume of call sales?
Also retraced back to the support level from earlier in the afternoon
Also retraced back to the support level from earlier in the afternoon
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I've been noticing over the last few months that the market will reverse just shy of the big targets or s/r lines. I don't know if it's retail front running targets, mm front running retail, or just a general sign of a skittish market, but it seems to happen a lot recently. In yesterday's case we aaaaalmost hit es 5000 then gave up what, a buck fifty? I didn't think the selling action seemed severe enough to be a reaction to news
$30,000 Millionaire said:
Futures are easier than options, just FYI.
As a rookie and trying to soak up knowledge, could you please elaborate?
I think it's just a matter that after the end of the quarter, with a lot of instability over this particular weekend (and tons of negative economic data to worry various folks), a lot of both institutional and private investors wanted to withdraw some from the market at the end of the week (consolidate gains/minimize risk prior to monday opening).ProgN said:
Pop quiz fam, what's your take away from the big red candles and jump in selling pressure the last 30 mins of the day? The SPX was more than likely going to hit 5,000 with a strong close, but reversed hard when news came out we bombed Iran proxies who had a 5 day warning we decided to respond to Iran for killing 3 soldiers. If anyone was killed or anything of importance was destroyed then they deserve it for being f'ing morons. They had 5 days to get out and take anything of value. It was theater, it wasn't a response. A real response would've been immediate and without warning.
The selloff wasn't algos because it wasn't severe enough. I'm curious what you interpreted and I'll post mine after others provide theirs.
Bird Poo said:
Perhaps. Someone mentioned earlier that Blackrock increased their position in BIG. Just wanted to make sure they were referring to Big Lots because I can't find that news anywhere.
It was Big Lots $BIG, and I read that news on the Schwab news a couple of days ago. The actual filing was on 1/26
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EnronAg said:$30,000 Millionaire said:
Futures are easier than options, just FYI.
As a rookie and trying to soak up knowledge, could you please elaborate?
Uses leverage to make explosive gains off small moves. No time decay like options.
Futures don't work dollar for dollar. For example, /MES is traded in increments of $0.25 with every increment being worth $1.25. So while a $1 move in SPX is worth $1. A $1 move in /MES is worth $5.
Here's a link to the actual filing if anyone is interested:bhanacik said:Bird Poo said:
Perhaps. Someone mentioned earlier that Blackrock increased their position in BIG. Just wanted to make sure they were referring to Big Lots because I can't find that news anywhere.
It was Big Lots $BIG, and I read that news on the Schwab news a couple of days ago. The actual filing was on 1/26
https://archive.fast-edgar.com/20240126/A3V5E22CZ22J22Z922292WZAK2LAZZ22Z262/us0893021032_012624.txt
I primarily write about this in OA's service but I decided to take two trading combines and I passed both, one with take profit trader, and more recently with top step.
Your minimum cost to get a $150K funded account is going to be $300, but it is a viable way to build capital. There are a couple of catches to this though.
1) extreme discipline required
2) all intraday trading
They allow you to trade up to 15 ES, NQ, CL, and GC, but I think that is crazy risk for the most part, especially NQ. 10 points blows your account if it moves against you.
Your minimum cost to get a $150K funded account is going to be $300, but it is a viable way to build capital. There are a couple of catches to this though.
1) extreme discipline required
2) all intraday trading
They allow you to trade up to 15 ES, NQ, CL, and GC, but I think that is crazy risk for the most part, especially NQ. 10 points blows your account if it moves against you.
Does OA1 only post on his own forum nowadays?
Options and futures are both leveraged products, but the Greeks don't apply to futures, so it's much easier to manage.
Options are time based contracts with an intrinsic value, extrinsic value, and have factors that influence their pricing including delta (option price change relative to move in underlying), theta (decay based on time), gamma (change in delta), and Vega (IV change). There are second order options derivatives too like vanna and charm, but that's for another day. The ones you really need to understand are delta and theta.
The most you can lose with long options is normally premium paid. Short options are another story, especially naked short calls. Don't ever do that unless you can buy the underlying.
Futures very simply are long and short but you can lose more than your account value if the position moves against you, so discipline and stops are crucial. If you shorted 15 NQ at yesterday's low without a stop, you're feeling real pain now, it would be a $30,000 loss. Futures also trade 23 hours a day and they are generally more liquid. It's also a bit easier to hedge and have pair trades. You can be long NQ and short ES for example waiting on a range break.
Options are time based contracts with an intrinsic value, extrinsic value, and have factors that influence their pricing including delta (option price change relative to move in underlying), theta (decay based on time), gamma (change in delta), and Vega (IV change). There are second order options derivatives too like vanna and charm, but that's for another day. The ones you really need to understand are delta and theta.
The most you can lose with long options is normally premium paid. Short options are another story, especially naked short calls. Don't ever do that unless you can buy the underlying.
Futures very simply are long and short but you can lose more than your account value if the position moves against you, so discipline and stops are crucial. If you shorted 15 NQ at yesterday's low without a stop, you're feeling real pain now, it would be a $30,000 loss. Futures also trade 23 hours a day and they are generally more liquid. It's also a bit easier to hedge and have pair trades. You can be long NQ and short ES for example waiting on a range break.
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