If you can turn a put that is 32% in the red into a 50% profit, by the minor changes you listed above, then I'd say your trade potential is still in very good shape.
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Option trade idea on YHOO
- Thread starter hajimow
- Start date
Primary goal is to break even, OTOH: I also could do average down... and probably will indeed do so... will see...Quote from Put_Master:
If you can turn a put that is 32% in the red into a 50% profit, by the minor changes you listed above, then I'd say your trade potential is still in very good shape.
He would have told us if he did.Quote from metameta:
Did hajimow cover his short, he said he was selling puts too so made money there, but it just seems to slowly climb every day wondering if he covered the 49,000 short shares.
I had more than one discussion with him about the risk of over concentrating funds in just one stock, but he was sure he knew the stock.
I know plenty of investors who do the same thing.
Eventually they all got killed.
One guy actually killed himself after the market killed his account.
I even mentioned that in an earlier post.
The one thing all investors who over concentrate in one stock have in common is,.... they are all on margin as well.
That is just part of the mentality of over concentrating in just one stock.
I guarantee he is on margin as well, depending on the type of trade he is doing at a particular moment in time.
It's the part of being on margin that kills the over concentrators.
Because they are over concentrated, their brokerage firms eventually call them when things go sour, and inform them they are increasing the margin requirements for their account.
They are informed they must put additional cash in the account, or they will close some trades to raise cash.
And so the spiral begins.
Hopefully he is not in that position yet, as YHOO is only off about 2 points,... although I don't know what exact price he shorted at. Do you know?
Given that the market has been weak lately, he could still come out of this ok.
If he does, i hope he alters his strategy of over concentrating in one stock, as doing that ALWAYS results in the investor losing his "objectivity", when evaluating stocks and trades.
the last i read on this post he was short 49,000 on oct 25th when yhoo was 16.61. he mentioned he sold puts to in order to "maximize gain". i'm sure my math is off but based on just what he posted here he would be underwater $58,000 from that date not counting any gains from puts sold.
but he mentioned yhoo stock is in his blood so i'm sure he is absolutely fine.
but he mentioned yhoo stock is in his blood so i'm sure he is absolutely fine.
He will not be updating.Quote from metameta:
i hope the op updates with a 'i got out long time ago' this thing keeps moving up. i actually think yhoo is a good short but its movement is hard to argue with even without any catalyst.
He didn't invest in YHOO.
He had an emotional attachment to it.
He married her!
He married her, and then the bitch divorced him, and took his money.
There were plenty of other hot, beautiful, and seductive stocks, with "sexy shapely charts" out there.
He should have diversified and played the field.
DON"T MARRY A STOCK!!!
Love um... and then leave them!
Yahoo: Bernstein Says Value Could Top $25 A Share
I found hajimow on another board about portfolio margin and tried to get an update on his short position still no response. Any day now it could fall and the fiscal cliff could bail him out if the whole market falls and YHOO collapses with it. I hope he sold puts to buy calls to limit his losses. Just taking what he said he was short and the approx price he would be down over $120,000 mark to market right now not counting put income. he stated he was up 100% ytd this might take a little of that back.
I found hajimow on another board about portfolio margin and tried to get an update on his short position still no response. Any day now it could fall and the fiscal cliff could bail him out if the whole market falls and YHOO collapses with it. I hope he sold puts to buy calls to limit his losses. Just taking what he said he was short and the approx price he would be down over $120,000 mark to market right now not counting put income. he stated he was up 100% ytd this might take a little of that back.
It's disappointing that he abandoned the board because of a bad trade.
It speaks of his character and his intellectual honesty.
It speaks of his character and his intellectual honesty.
Quote from newwurldmn:
It's disappointing that he abandoned the board because of a bad trade.
It speaks of his character and his intellectual honesty.
I think it speaks more to his poor risk mangement.
Over concentrating in one stock is so stupid and so reckless, that I'm sure he was also investing on excessive margin as well. It just comes with the type personality that over concentrates.
Bottom line.... it's usually not stocks going the wrong way that kills investors. It's when they are on excessive margin when that occurs.
That combination does it every time.
I'm not anti margin. I use it all the time. I'm just anti excessive margin.
Hence the reason I don't like credit spreads as a sole strategy for ones investing account. Waaaaaay to much margin risk for ones account via that strategy.
For the occasional risky stock, sure. But not as an overall strategy preference.
I'm 100% sure he was on excessive margin, and probably got a margin call. When you are over concentrated, the normal margin rules do NOT apply to you.
To protect themselves from reckless investors, the brokerage firm will raise their margin requiirements on investors who over concentrate.
Hence, he probably got a margin call sooner then he anticipated.
The problem with over concentrating, besides the obvious, is that it's too easy to lose your investment "objectivity". It tends to get replaced with investment rationalizations.
Hopefully he has learned his lesson, and will structure a less reckless and more disciplined style going foward.