Re: [AFMUG] OT - stock market

[Bill Prince]

We have friends who had made a small fortune on margin and they bought a sail boat to go on an 8-week cruise. Excrement hit the fan while they were gone, and when they returned, they had to sell both their house and their sail boat to recover.

bp
<part15sbs{at}gmail{dot}com>

On 7/1/2020 12:29 PM, Ken Hohhof wrote:

There are many option strategies, some are actually pretty conservative.  When I was much younger, I used to sell covered calls to generate extra income on stocks I was long that had appreciated.  Worst outcome was the stock got called away at a price I was willing to accept.  Most of the time the options expired worthless and I pocketed a few bucks and did it again.

 

There are also strategies like straddles and spreads that are not high risk.

 

You can also buy options, and should be prepared to lose what you spent on them if you guess wrong.  But you can’t lose more than you spent.  If you guess right, you can make a lot.  It’s like Vegas, if you buy $500 of chips, that’s the most you can lose.

 

Really risky is buying on margin, or short sales, or selling naked options.  Yes, I don’t have the guts for those.

 

 

From: AF <af-boun...@af.afmug.com> On Behalf Of ch...@wbmfg.com
Sent: Wednesday, July 1, 2020 2:05 PM
To: AnimalFarm Microwave Users Group <af@af.afmug.com>
Subject: Re: [AFMUG] OT - stock market

 

I don’t have the guts for options.  But I did make a nice pile off of Tesla over the past few months. 

 

From: Tushar Patel

Sent: Wednesday, July 1, 2020 12:49 PM

To: AnimalFarm Microwave Users Group

Subject: Re: [AFMUG] OT - stock market

 

Interesting, yesterday I ran into someone and she started talking about how people are making a lot of money in options. She went on to say her friend made $3.5M in Tesla options. 

 

Tushar

 

On Jul 1, 2020, at 1:12 PM, Ken Hohhof <af...@kwisp.com> wrote:



I spent about an hour on the phone yesterday with my guy at Morgan Stanley, basically cutting my exposure to equities in my IRA in half.  Went from 60/40 to 30/70.  Also got rid of one real estate ETF.

 

But the interesting factoid I wanted to pass along was he said a lot of individual small investors are currently speculating in the market including in options basically as a form of entertainment.  And that is helping to boost some irrational exuberance.  Even some big name stocks that have done well during the pandemic have been bid up to some pretty crazy PE ratios.

 

I guess if you can’t go to a movie, concert, bar, or casino, there’s Wall Street.  But people at a casino aren’t necessarily looking to make a profit, just have a good time while losing their money.

 

It also turns out he knows the family of the kid who committed suicide because he thought erroneously that he lost almost a million dollars on some millennial focused stock trading app.

https://www.cnn.com/2020/06/19/business/robinhood-suicide-alex-kearns/index.html

 

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