Quote from TM_Direct:
Mr. Market
It sound like you did your due dilli on LCi but here's my question:
Suppose you buy 1000 shares of it at 20.
You are targeting 23 and change so that's a 3000 profit in six weeks.....with imminent war and other dangerous world events possible, why should one take the RISK in this market of holding a position overnight? Let's say for example that they report tonight on CNN that there was a terrorist bomb on the columbia...you would be hurt big. Given the fact that this is a trading board for active traders, I would think most traders would rather go in and out for a few hundred bucks on a daily basis, knowing that it is in an upward trend as you say....wouldn't it behoove us to buy and sell a few times during the day and take NO overnight risk? 3000 / 6 weeks is only $500.00 per week....hardly seems worth the risk of 20,000 overnight in this political/economic and possibly war filled environment.
I commend you on your strategy. Like the song goes, you say tomay-toe and I say to-mah-toe...doesn't mean we both won't make money. I'll still answer your good question more specifically:
....2 reasons:
#1. I have a day job
#2. I am almost always right and, if the fish are biting, you use the same bait.
Thanks for your intelligent question and your well thought out post.
....but on a serious note, risk reward ratio isn't really there either unless it hits your target......and worse is the fact that you could be in a meeting and POOF! there goes the $$ ( that happened to me)....If I was going to hold 6 weeks to get 3000.00.....Id buy a call...This way if im wrong, im out a grand or two...if im right. i make my 3000+....what is the advantage of buying the stock versus a 3 month call?