The Money Situation

R

rgilbert93

Hello everyone,

I've had a lot of unexpected expenses (as well as my parents- I'm 17) lately. Because of this, I drained my trading account (not really my choice) and I don't have much to invest at all. Anyways, I have about $500 saved up to get back into it (I trade mostly options)

With my broker, I'm looking at 5 dollar option commissions, plus about $.65 per contract. So in all, only a $12-15 break even goal.

Investing 40-80% of my total account, is it viable that I could even grow this money? I think it is but some tips would be appreciated. Had any experiences investing with little cash? Please share.
 
Only with perfect timing and OTM options that will multiple many times the premium. The odds are very low but it is possible. Another possibility is micro-lot forex but it will take longer and the risk of ruin is a lot higher due to volatility and leverage.

Better save the money IMO in case you need it in the future and when you put aside more you start again.
 
Quote from startraitor:

Banking a min wage job you could have $4000+ by summer. Delay your gratification for a few months and study some charts.
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Well I appreciate your suggestions, don't get me wrong, but I don't have the time or inclination to work a minimum wage job. I applied for some a while ago and was never responded to. It wasn't because I lacked in any area, it's just because everything is pretty scare where I live.

What do you mean by study charts? Technicals? Candlesticks? Price patterns?
 
I hope I'm not telling you why you're wrong when I was the one who wanted an answer but I would like your input on something:

If I invest 400$ (80% of my capital) in one trade, buying 4 long calls for $1.00 each at a strike price of $2 on an underlying stock of $3.

The stock price goes up 5% to $3.15 and my options increase to $1.15 each (I think this is right- assuming they expire the next month. Now to simplify, I'm going to leave out the decay of time value and spreads.)

The 4 calls are valued at $4.60 in all, so I gain $.60 on a $4.00 investment.

Principal - $400

Unrealized Gains - $60 (15%)

Realized Gains (Minus $15 Commission Total) - $45 (11%)

So, I mean, it could be done. It would be risky as hell, but hey, at 17 I can afford to take on a lot of risk.
 
Quote from intradaybill:

Only with perfect timing and OTM options that will multiple many times the premium. The odds are very low but it is possible. Another possibility is micro-lot forex but it will take longer and the risk of ruin is a lot higher due to volatility and leverage.

Better save the money IMO in case you need it in the future and when you put aside more you start again.
More...

I don't like the highly leveraged forex idea. Or any forex for that matter, at this time. I'm going to use deep ITM options because I personally don't like intermediate term options - it reminds me too much of gambling (don't ask how). Why would you suggest OTM options though, because they are very cheap?

Thanks though for the ideas though, I'll definitely consider them.
 
Quote from startraitor:

In a few years you'll burn much more than $400 on a fun night, don't get too worked up about it.
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Very good point. I enjoy investing and working on my website more when I'm actually making trades, obviously. And if $400 is the means to keep me interested, then I'm cool with risking it.
 
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