Crypto thread

Agree..RH is mickey mouse for sure didnt they have massive outage issues during the high volume peak times?  NO WAY would I ever be involved with a firm that I could even remotely have an issue with executing a trade at any and all times.

I’m down $9. Why can’t I just trade these tiny positions? I don’t understand the logic behind these stupid rules. 

If there’s good news from opec tomorrow this USO call could run 

+$180 on this little trade is good enough for me but now I can’t sell it because I’ll be labeled a day trader? 

I don’t like that. But maybe it’s the gods forcing me to hold because this thing is going to the moon? 

There are a few types of option trading accounts.  Usually five.  I do not know how Robinhood works.  But for the first couple types you do not need a margin account.  The rest you will need a margin account.  Some places you will have to open a margin account to trade options.  But the trade you did is not one requiring margin.  Because what you invest is the most you can lose.   That was the point in me saying if you want to short a stock it is better to buy puts.  If you are do a normal shorting of stock — you will need margin and you could theoretically lose a lot more than you invest.  They will not let you even do this unless you are set up and have it funded a certain amount beyond your trade to even start.  This is why I never mention it to you.  It is foolproof this way.  

A pattern trader or day trader classification is determined by how often you buy and sale a stock.  If you buy HD today and sell it today — that is a day trade.   If you do this 4 out of 5 times in a week you will get classified as a pattern trader and have to fund the account — in your case 25K.  I would look at their website and they will give you the rules specific to their site. If not, call them and ask.  

If you are daytrading like this you can also get caught up in a ‘wash sale’ if you are not careful.  This will disallow you to write off losses on capital gains, etc.  

There are a lot of rules.  Some are IRS specific and some are platform specific.  If you plan to do this type of trading on a regular basis then you need to get familiar with them. 

But the way I understood you — you wanted to buy some HD puts and sell them next week.  That is not a day trade and would not need margin.  

Also, if you are worried about taxes — keep in mind the difference between long term and short term capital gains.  Anything less than a year and a day — and anything longer than a year and a day.  

A lot to know if you are going to keep trading this way.  

There are rules. Just ask them what they are.  I imagine you can sale this one.  That would only be two in two days.  Verify the rules. 

Finding a buyer. But that is always going to be an additional problem with options.  That is why I mentioned how much volume yours had the other day.  You usually want to trade high volume options that have a lot of open interest and activity. Etc. 

If you really want to sell them you my have to place your sale order at a slightly lower price to attract a buyer.  You can go and look at what the market ask is for whatever you have — and for sure you should be able to get that price — if you just want to get out of the trade. 

Wow. I wrote that in a hurry and didn’t proofread again. Sale and sell are not interchangeable. Autocorrect — I depend on it too much.  But you get the points I hope. 

You should have seen my taxes last year. I had a good amount in crypto, sold two houses, the houses were rental properties, switched jobs, got a severance, sold stocks and I went to an Asian lady that barely speaks English at Liberty Tax. 

She filled out the paperwork for the bitcoin and called it BIG CORN. 

Did you place the orders to sell this yet?

no I can’t because that warning of being flagged as a day trader came up 

I know.  A lot to keep in mind when tax time comes.  Can get tedious in a hurry. 

Call them.  You should be able to do more than one trade before they flag you.  Just tell them you didn’t know and want to make sure of the exact rules. 

I get real lazy in a bit I will look at their site.  I know a few guys that trade there and they are mostly younger guys.  I have never known them to have this issue.  I have to look at it.  I know they are doing some exotic trades.   And I imagine they didn’t fund it with 25k. I may be wrong. 

If you sell the next day it’s no big deal? It’s just the same day trades that they don’t want you doing? 

I copied his right off of their site:

That part is to me is not more than 3 of these trades in a 5 day period.  Some places have rules about trading the same stock over and over as well.  So ask them if there is anything you need to know about what you plan to do. 

But if you have only done the HD trade yesterday — you are fine to do it today, according to the rules they have posted. 

Yeah they cant stop you from selling a position you have, but they will restrict your account...but if you want to sell it then sell it and then put in the 25k PLUS to get off the restriction list.

Imagine if a bunch of RH rookies decided to short BA on the day it bottomed only to see it climb to 180 within the next few trading days. With inadequate liquidity, that would be a big mess to sort out.

I own 1% of the price of one BTC on RH and that's all (and of course I don't own the BTC, only the promise from RH that they will pay the spot price when I sell). Hearing this news on how they could potentially get stuck would be concerning to me if I was using them as a primary brokerage. I was actually considering sending them over some funds from my checking account but this news makes it a no go for me. 

The Regulation T is in effect even for Robinhood traders — just to prevent things like that. 

OPEC meeting tomorrow 10 AM ET 

Do we secure profits and dump before, or hold and hope they reach an agreement that pumps it to the moon? 

If they agree to cut production I doubt it will be enough to make a difference. The oversupply right now will not end until global business gets back to normal or at least gets past 1st gear.

Whether they do it here or next meeting,  I could care less.. only a trader would care.   The reality is that even these despot regimes must answer to their own people... even though they can afford to play the waiting game much longer than U.S. shale producers.

At the end of the day, they have much more to lose than the shale industry.   Their very powerful is at stake.

So, what's the big takeaway from all this ??  Stick w the big u.s. integrated companies that have the wherewithal to survive the big circus sideshow.   Have I mentioned already that CVX and XOM are the best positioned  ?

*power (not powerful)

Kremlin says Putin has no plans to talk to Saudis or Trump on oil 

That’s a bluff 

And it’s dumping because of it 

Do you have your orders in before the markets open?