tryin to buy an nsx
- Thread starter keyser1
- Start date
Even if the underlying stock was up 4 points, the profit would be significantly less than $20K because the volatility dries up after the earnings came up. Volatility is a big part of the $1.6/option premium. $9K might be more like it.
Such is the novice approach to trading earnings releases. A "better" approach would be to do a vertical spread - buy the $37.50 calls and sell the $42.50 calls if you expect the stock to go up 4 or 5 points. This way volatility is entirely removed from the picture because both the $37.50 and $42.50 calls have similar volatility premium and the buying and selling cancel ivol from each other.
Such is the novice approach to trading earnings releases. A "better" approach would be to do a vertical spread - buy the $37.50 calls and sell the $42.50 calls if you expect the stock to go up 4 or 5 points. This way volatility is entirely removed from the picture because both the $37.50 and $42.50 calls have similar volatility premium and the buying and selling cancel ivol from each other.
no trades the last few days.
still have the .10 sell order on the q puts.
i'm gonna let the yhoo calls ride for a bit. i might've even bought some more yhoo itm calls after earnings since i felt it oversold, but no mo free money to do so (that said i might buy some near otm/atm jan 06 yhoo calls in a non-nsx acct if yhoo pulls back some more).
still have the .10 sell order on the q puts.
i'm gonna let the yhoo calls ride for a bit. i might've even bought some more yhoo itm calls after earnings since i felt it oversold, but no mo free money to do so (that said i might buy some near otm/atm jan 06 yhoo calls in a non-nsx acct if yhoo pulls back some more).
Why aim for NSX or for that matter MB E55. Those are boring cars. How about an ENZO? Granted you'll have to work harder but since you're aiming high...
<<<<<I'm going to start out with 5k in an acct. My goal is to make enuf money (in the next year) to get myself an Acura NSX* (or possibly their new sports car since 2005 is the end of the line for the NSX and honda has said there will be a new supercar, although haven't given any details yet).
Since I need the money to grow really quickly, either penny stocks or option trading is going to be my best route. I'm not going to be using margin, and not going to be selling options (hence I cannot lose more than the 5k initial investment).
I need to raise anywhere from 30k - 100k from my initial 5k investment for this to work.
30k gets me a used 1991 - 1993 NSX + insurance + taxes.
100k should gets me a new 05 NSX + insurance + taxes.
Also losing 5k will have no effect on my current lifestyle so I have no fears of going all in.
I'll chronicle all my trades in this thread. If anyone has helpful suggestions I would appreciate it.
FYI: if ya dont know this is the nsx...
http://www.acura.com/models/nsx_wallpaper.asp
*There's also a small possibility that I'll go with the Mercedes E55 instead although in the case of an E55, I would only buy new.>>>>>
After reading your post, I couldn't help but laugh.
Do these two things.
First, for God's sake, PAPER TRADE. People all over these boards say paper trading is worthless. Well to them, it is. To me, it helps me immensely. I paper trade and real trade simultaneously. Just know this. Succeeding in paper trading doesn't mean you will make money for real. But if you can't even succeed in paper trading, then you DEFINITELY won't make real money. It's that simple.
Second, read pages 156 to 159 of Reminiscences of a Stock Operator. This is the greatest trader of all time talking about the sheer folly of trying to get the market to "pay for" something that you want. If you don't even have this book, or have not read it, it is only another reason you shouldn't be trading in the first place.
Since I need the money to grow really quickly, either penny stocks or option trading is going to be my best route. I'm not going to be using margin, and not going to be selling options (hence I cannot lose more than the 5k initial investment).
I need to raise anywhere from 30k - 100k from my initial 5k investment for this to work.
30k gets me a used 1991 - 1993 NSX + insurance + taxes.
100k should gets me a new 05 NSX + insurance + taxes.
Also losing 5k will have no effect on my current lifestyle so I have no fears of going all in.
I'll chronicle all my trades in this thread. If anyone has helpful suggestions I would appreciate it.
FYI: if ya dont know this is the nsx...
http://www.acura.com/models/nsx_wallpaper.asp
*There's also a small possibility that I'll go with the Mercedes E55 instead although in the case of an E55, I would only buy new.>>>>>
After reading your post, I couldn't help but laugh.
Do these two things.
First, for God's sake, PAPER TRADE. People all over these boards say paper trading is worthless. Well to them, it is. To me, it helps me immensely. I paper trade and real trade simultaneously. Just know this. Succeeding in paper trading doesn't mean you will make money for real. But if you can't even succeed in paper trading, then you DEFINITELY won't make real money. It's that simple.
Second, read pages 156 to 159 of Reminiscences of a Stock Operator. This is the greatest trader of all time talking about the sheer folly of trying to get the market to "pay for" something that you want. If you don't even have this book, or have not read it, it is only another reason you shouldn't be trading in the first place.
keyser's last post:
A.D.,
check out this thread --
http://www.elitetrader.com/vb/showt...&threadid=52424
I tried to turn 5k into 260k. So far i'm pretty close to failing, but this is good for you...
Due to the law of averages, if I fail, that means you have a better shot at it.
My advice is to take some really volatile stocks during volatile periods of time (like earnings season) and go all in.
Goodluck,
Keyser
Why doesn't anybody start a thread like: Watch me turn $5,000 into $12.50!
It would be so much easier, and I'd be willing to bet they could do it...
A.D.,
check out this thread --
http://www.elitetrader.com/vb/showt...&threadid=52424
I tried to turn 5k into 260k. So far i'm pretty close to failing, but this is good for you...
Due to the law of averages, if I fail, that means you have a better shot at it.
My advice is to take some really volatile stocks during volatile periods of time (like earnings season) and go all in.
Goodluck,
Keyser
Why doesn't anybody start a thread like: Watch me turn $5,000 into $12.50!
It would be so much easier, and I'd be willing to bet they could do it...
I always though it was not a bad idea to go blind into earnings, I made a lot of bucks there.
But I guess it can be down to luck: a wrong step can cut your legs in one day, and I was very lucky to avoid the likes of yahoo and ebay back in january...
.... I was tempted to pull the long trigger!!
But I guess it can be down to luck: a wrong step can cut your legs in one day, and I was very lucky to avoid the likes of yahoo and ebay back in january...
.... I was tempted to pull the long trigger!!
Actually, now that I think about it, I was long YHOO back on Jauary and lost $4. But I avoided EBAY. And went into GOOG and got around $20.
Successive quarter long with AAPL and lost another $4.
It was last quarter that i thought better than going along with YHOO and GOOG, but lost big opportunity with AAPL again.
All these trades were made just before earnings.
You can do well if you get a couple of nice hits, but when you get it wrong you'll never be able to get out with a small loss.
Successive quarter long with AAPL and lost another $4.
It was last quarter that i thought better than going along with YHOO and GOOG, but lost big opportunity with AAPL again.
All these trades were made just before earnings.
You can do well if you get a couple of nice hits, but when you get it wrong you'll never be able to get out with a small loss.