I never understood the fascination with day trading/puts/calls and options. Not only do you need to be luckier (and smarter) than the typical investor, you are competing against the algos to get to the trades first. 95% will fail at that task alone. If you find your niche and you can somehow beat the algos to the trade consistently, you are rewarded by having to sit in front of a computer screen all day and pay higher short term trade taxes on your success.
I have come across many people in my life that have attempted some form of this and not one has been able to stick with it for long before going bust. Greed, poor money management, and that spectacular bad run of trades seems to wipe them out every time.
Gamble for entertainment, invest for wealth!
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I never understood the fascination with day trading/puts/calls and options. Not only do you need to be luckier (and smarter) than the typical investor, you are competing against the algos to get to the trades first. 95% will fail at that task alone. If you find your niche and you can somehow beat the algos to the trade consistently, you are rewarded by having to sit in front of a computer screen all day and pay higher short term trade taxes on your success.
I have come across many people in my life that have attempted some form of this and not one has been able to stick with it for long before going bust. Greed, poor money management, and that spectacular bad run of trades seems to wipe them out every time.
Here's a good recent interview with Burton Malkiel, the famed economist credited with writing A Random Walk Down Wall Street nearly 30 years ago.
I found it ironic he brought up the notion that he thinks many young people are replacing their sports betting with market betting. I had mentioned this just last week, when talking about the poor soul who took his life on Robinhood with his options bet.
Here's a good recent interview with Burton Malkiel, the famed economist credited with writing A Random Walk Down Wall Street nearly 30 years ago.
I found it ironic he brought up the notion that he thinks many young people are replacing their sports betting with market betting. I had mentioned this just last week, when talking about the poor soul who took his life on Robinhood with his options bet.
I never understood the fascination with day trading/puts/calls and options. Not only do you need to be luckier (and smarter) than the typical investor, you are competing against the algos to get to the trades first. 95% will fail at that task alone. If you find your niche and you can somehow beat the algos to the trade consistently, you are rewarded by having to sit in front of a computer screen all day and pay higher short term trade taxes on your success. I have come across many people in my life that have attempted some form of this and not one has been able to stick with it for long before going bust. Greed, poor money management, and that spectacular bad run of trades seems to wipe them out every time.
Maybe this is rhetorical...
But the fascination part is easy to understand from a psychological standpoint.
You can make a lot of money, very quickly. You can only lose what you ‘invest’ generally. And people like the allure of becoming independently wealthy — and this looks like an easy way to do it, from home or wherever you have your smartphone at the time.
It is like someone that plays a slot machine for the first time and hits a jackpot — they are ‘hooked’ now. Or when your friend tells you how he is making so-and-so amount in day trading. You want to try it out and you think you can do it as well.
It is the reason people play the lottery.
It is the reason people play a 5-team parlay in sports. They know they are better playing single play in the long run — but they want to hit the homerun, and quick.
Etc., etc.
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Quote Originally Posted by gambleholic63:
I never understood the fascination with day trading/puts/calls and options. Not only do you need to be luckier (and smarter) than the typical investor, you are competing against the algos to get to the trades first. 95% will fail at that task alone. If you find your niche and you can somehow beat the algos to the trade consistently, you are rewarded by having to sit in front of a computer screen all day and pay higher short term trade taxes on your success. I have come across many people in my life that have attempted some form of this and not one has been able to stick with it for long before going bust. Greed, poor money management, and that spectacular bad run of trades seems to wipe them out every time.
Maybe this is rhetorical...
But the fascination part is easy to understand from a psychological standpoint.
You can make a lot of money, very quickly. You can only lose what you ‘invest’ generally. And people like the allure of becoming independently wealthy — and this looks like an easy way to do it, from home or wherever you have your smartphone at the time.
It is like someone that plays a slot machine for the first time and hits a jackpot — they are ‘hooked’ now. Or when your friend tells you how he is making so-and-so amount in day trading. You want to try it out and you think you can do it as well.
It is the reason people play the lottery.
It is the reason people play a 5-team parlay in sports. They know they are better playing single play in the long run — but they want to hit the homerun, and quick.
I have a list of several statistics I always present to people that want to start day trading. So, I want to list — just a few (I have many more) — before I say what I want to say about them:
80% of all day traders quit within the first two years.
Among all day traders, nearly 40% day trade for only one month. Within three years, only 13% continue to day trade. After five years, only 7% remain.
The average individual investor underperforms a market index by 1.5% per year. Active traders underperform by 6.5% annually.
Day traders with strong past performance go on to earn strong returns in the future. Though only about 1% of all day traders are able to predictably profit net of fees.
Traders with up to a 10 years negative track record continue to trade. This suggests that day traders even continue to trade when they receive a negative signal regarding their ability.
Profitable day traders make up a small proportion of all traders – 1.6% in the average year. However, these day traders are very active – accounting for 12% of all day trading activity.
Within each income group, gamblers underperform non-gamblers.
Investors tend to sell winning investments while holding on to their losing investments.
Trading in Taiwan dropped by about 25% when a lottery was introduced in April 2002.
During periods with unusually large lottery jackpot, individual investor trading declines.
Within each income group, gamblers underperform non-gamblers.
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I have a list of several statistics I always present to people that want to start day trading. So, I want to list — just a few (I have many more) — before I say what I want to say about them:
80% of all day traders quit within the first two years.
Among all day traders, nearly 40% day trade for only one month. Within three years, only 13% continue to day trade. After five years, only 7% remain.
The average individual investor underperforms a market index by 1.5% per year. Active traders underperform by 6.5% annually.
Day traders with strong past performance go on to earn strong returns in the future. Though only about 1% of all day traders are able to predictably profit net of fees.
Traders with up to a 10 years negative track record continue to trade. This suggests that day traders even continue to trade when they receive a negative signal regarding their ability.
Profitable day traders make up a small proportion of all traders – 1.6% in the average year. However, these day traders are very active – accounting for 12% of all day trading activity.
Within each income group, gamblers underperform non-gamblers.
Investors tend to sell winning investments while holding on to their losing investments.
Trading in Taiwan dropped by about 25% when a lottery was introduced in April 2002.
During periods with unusually large lottery jackpot, individual investor trading declines.
Within each income group, gamblers underperform non-gamblers.
You can actually make money day trading. I have done it. I know people that have done it and still are doing it.
There are problems with doing it however. It tends to attract the ‘gamblers’ more than the investors. It tends to attract the ‘lazy’ investor instead of one that wants to do the due-diligence required.
You can make money sports betting. But how many people do you know that really do it, out of all of the ones that bet?
It is somewhat like playing poker. Some folks sit down to grind it out and study the game to improve their game. But a lot more are just gamblers looking to have a good time, some free drinks and food, and some nice table talk — while they watch the game on tv.
You have to build up a bankroll first. Usually by working a regular job and stockpiling — while studying and researching and talking to folks. Papertrade a lit. Nowadays there are even platforms where you can trade online to see how you ‘would’ do without putting in cash. You can also backrest any ‘strategy or method’ you would like to try out.
BUT you absolutely have to treat it like a job. If you are single and young and have a mind for it AND the time — it can be done. But you cannot just jump in with both feet. Have a plan. For example, you are will have to know you cannot put more than a certain amount of your bankroll into any one trade — just like sports betting. You cannot just swing for the f news with every trade.
Study is the key thing. There are many, many complex strategies — especially with options.
But you have to put the work in and be able to handle the stress of the ups and downs. But always keep your day job while trying it out.
Otherwise, just treat it like the lottery ticket — you either hit or miss — and keep moving on but don’t expect it to be your day job if that is your ‘strategy’.
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With all of that being said.
You can actually make money day trading. I have done it. I know people that have done it and still are doing it.
There are problems with doing it however. It tends to attract the ‘gamblers’ more than the investors. It tends to attract the ‘lazy’ investor instead of one that wants to do the due-diligence required.
You can make money sports betting. But how many people do you know that really do it, out of all of the ones that bet?
It is somewhat like playing poker. Some folks sit down to grind it out and study the game to improve their game. But a lot more are just gamblers looking to have a good time, some free drinks and food, and some nice table talk — while they watch the game on tv.
You have to build up a bankroll first. Usually by working a regular job and stockpiling — while studying and researching and talking to folks. Papertrade a lit. Nowadays there are even platforms where you can trade online to see how you ‘would’ do without putting in cash. You can also backrest any ‘strategy or method’ you would like to try out.
BUT you absolutely have to treat it like a job. If you are single and young and have a mind for it AND the time — it can be done. But you cannot just jump in with both feet. Have a plan. For example, you are will have to know you cannot put more than a certain amount of your bankroll into any one trade — just like sports betting. You cannot just swing for the f news with every trade.
Study is the key thing. There are many, many complex strategies — especially with options.
But you have to put the work in and be able to handle the stress of the ups and downs. But always keep your day job while trying it out.
Otherwise, just treat it like the lottery ticket — you either hit or miss — and keep moving on but don’t expect it to be your day job if that is your ‘strategy’.
Malkiel has always been an interesting guy. He has been one of the few old-school that has adapted his ideas.
At one time he was somewhat dismissive of ‘experts’ and ETFs. Now, he has become a big proponent of them.
He always had not liked ‘smart beta’ because of their taxes and expenses. He used to refer to it as ‘expensive beta’. He pretty much now has admitted otherwise.
He was always mostly an ‘efficient-market’ guy. And his point for sure is valid. But old-school types are sometimes hard to change their minds. For sure, at one time, the ‘inefficiencies’ were hard to extract because of the fees, etc. But, I believe, he has now acknowledged that some ‘inefficiencies’ can be exploited.
Amazing what computers have done for the market and the traders, including changing their mindset.
But he has always been a good interview.
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Rush,
Malkiel has always been an interesting guy. He has been one of the few old-school that has adapted his ideas.
At one time he was somewhat dismissive of ‘experts’ and ETFs. Now, he has become a big proponent of them.
He always had not liked ‘smart beta’ because of their taxes and expenses. He used to refer to it as ‘expensive beta’. He pretty much now has admitted otherwise.
He was always mostly an ‘efficient-market’ guy. And his point for sure is valid. But old-school types are sometimes hard to change their minds. For sure, at one time, the ‘inefficiencies’ were hard to extract because of the fees, etc. But, I believe, he has now acknowledged that some ‘inefficiencies’ can be exploited.
Amazing what computers have done for the market and the traders, including changing their mindset.
Yeah. There are a ton of gamblers playing the markets at the current time. Maybe not 100,000 Dave Portnoy's, but yeah....gamblers are in the markets for sure. Portnoy is probably the poster child for how to lose a fortune day trading (and yes, I'm aware that he made one million dollars day trading on a single day last month).
TIME is literally the only thing 80% of the people on earth need to become a millionaire assuming the 80% is willing to get a job. Unfortunately, too many people want what they want while maxing out credit cards or risking everything on day trading, frequent casino trips, playing the lottery or doing a number of other wealth destroying activities.
I'm way off subject here but I believe our education system is flawed. Every high school should have a course in personal financial management.
Gamble for entertainment, invest for wealth!
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Yeah. There are a ton of gamblers playing the markets at the current time. Maybe not 100,000 Dave Portnoy's, but yeah....gamblers are in the markets for sure. Portnoy is probably the poster child for how to lose a fortune day trading (and yes, I'm aware that he made one million dollars day trading on a single day last month).
TIME is literally the only thing 80% of the people on earth need to become a millionaire assuming the 80% is willing to get a job. Unfortunately, too many people want what they want while maxing out credit cards or risking everything on day trading, frequent casino trips, playing the lottery or doing a number of other wealth destroying activities.
I'm way off subject here but I believe our education system is flawed. Every high school should have a course in personal financial management.
I have been saying they need a class like that in school for years.
Unless your dad is a CPA or something — you are not taught this stuff at home or at school. You absolutely have to learn it the hard way. Very tough because it is too tempting to follow the Jones’s down the wrong path.
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Gamble,
I don’t think it is off subject at all.
I have been saying they need a class like that in school for years.
Unless your dad is a CPA or something — you are not taught this stuff at home or at school. You absolutely have to learn it the hard way. Very tough because it is too tempting to follow the Jones’s down the wrong path.
Gamble, I don’t think it is off subject at all. I have been saying they need a class like that in school for years. Unless your dad is a CPA or something — you are not taught this stuff at home or at school. You absolutely have to learn it the hard way. Very tough because it is too tempting to follow the Jones’s down the wrong path.
It's funny we've all thought the same thing . When I look at all the people in our society who are not very good at their finances, I wonder .. how did we get here ? How are people so poor at managing money ? I, too, have thought that the high school curriculum needs a personal finance and investment class. Start with the first... ( i.e. teach SAVE to our students), and then you can teach them the benefits of investing ( and Compound Interest). Heck, throw out he Economics course they teach as a senior in H.S .... at least that's how it was at my school eons ago.. lol. Get rid of it , or spend maybe 20 % with it and 40% w the other two.
Back to my original comment...lots of people are not very good at Managing money, because I've read more than once recently that around half of all Americans have only around $400 as an emergency fund. What on earth are people thinking? SAVE ! . Most people get into trouble w finances not because they don't earn enough money , but because they SPEND too much.
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Quote Originally Posted by Raiders22:
Gamble, I don’t think it is off subject at all. I have been saying they need a class like that in school for years. Unless your dad is a CPA or something — you are not taught this stuff at home or at school. You absolutely have to learn it the hard way. Very tough because it is too tempting to follow the Jones’s down the wrong path.
It's funny we've all thought the same thing . When I look at all the people in our society who are not very good at their finances, I wonder .. how did we get here ? How are people so poor at managing money ? I, too, have thought that the high school curriculum needs a personal finance and investment class. Start with the first... ( i.e. teach SAVE to our students), and then you can teach them the benefits of investing ( and Compound Interest). Heck, throw out he Economics course they teach as a senior in H.S .... at least that's how it was at my school eons ago.. lol. Get rid of it , or spend maybe 20 % with it and 40% w the other two.
Back to my original comment...lots of people are not very good at Managing money, because I've read more than once recently that around half of all Americans have only around $400 as an emergency fund. What on earth are people thinking? SAVE ! . Most people get into trouble w finances not because they don't earn enough money , but because they SPEND too much.
I can only see the CURRENT days pricing of calls at my own price
I put in 7 June 18 calls for APT
monday it tanked , Tuesday and today were very good days Stock closed today at 19.11 after I bought it at 17 on Monday morning at 1.19 Current value at 1.80 and it hit up to 2.8 today. I wish I could be in front of a computer all day , but then again maybe I sell the calls too early. As more and more states make masks mandatory , let’s hope for one more big day for APT before they expire on Friday
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I can only see the CURRENT days pricing of calls at my own price
I put in 7 June 18 calls for APT
monday it tanked , Tuesday and today were very good days Stock closed today at 19.11 after I bought it at 17 on Monday morning at 1.19 Current value at 1.80 and it hit up to 2.8 today. I wish I could be in front of a computer all day , but then again maybe I sell the calls too early. As more and more states make masks mandatory , let’s hope for one more big day for APT before they expire on Friday
You have JUN 26 calls -- not JUN 18? You do not have a sell order in place? You could've made 135% today? With 3 days left you should've been okay with that?
I am confused on what you are doing?
But you should be able to see the chart for the past few days? I mean -- if I am looking at what I think you have, it traded at the highest since the middle of May?
So, you don't need to be in front of a computer all day -- or smartphone -- just put the order in and let it get filled?
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You have JUN 26 calls -- not JUN 18? You do not have a sell order in place? You could've made 135% today? With 3 days left you should've been okay with that?
I am confused on what you are doing?
But you should be able to see the chart for the past few days? I mean -- if I am looking at what I think you have, it traded at the highest since the middle of May?
So, you don't need to be in front of a computer all day -- or smartphone -- just put the order in and let it get filled?
I’m on the road from market open till about 230 so I have an hour and a half usually till market close so I can see what’s been going on. Your absolutely right though. This thing was at 20.6 today and closed barely over 19. I’m holding for one more day hopefully. Just wish I knew how the hell to “put the order in “ and get it filled. no idea what that means. you said that since the start but I’m clueless
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I’m on the road from market open till about 230 so I have an hour and a half usually till market close so I can see what’s been going on. Your absolutely right though. This thing was at 20.6 today and closed barely over 19. I’m holding for one more day hopefully. Just wish I knew how the hell to “put the order in “ and get it filled. no idea what that means. you said that since the start but I’m clueless
Yes -- with short term AND especially with very short term ALWAYS have a stop loss order in place to cut your losses (if necessary) AND a limit order that gets triggered at a certain price or above. AND make it a one-cancels-all or one-cancels-other type trade. Or whatever wording your platform uses.
You cannot just hope to eyeball short term option trades, Make this a normal part of your trading pattern. BUY--then PLACE SELL ORDERS!
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Yes -- with short term AND especially with very short term ALWAYS have a stop loss order in place to cut your losses (if necessary) AND a limit order that gets triggered at a certain price or above. AND make it a one-cancels-all or one-cancels-other type trade. Or whatever wording your platform uses.
You cannot just hope to eyeball short term option trades, Make this a normal part of your trading pattern. BUY--then PLACE SELL ORDERS!
Absolutely crazy. Within a half hour the stock was at 20.3 I believe Of course I could’ve got out making more than double on the options but I waited thinking it’d be bullish all day lol. In your opinion what do you make of this stock being added to the Russell index tomorrow ? Of course everyone is bullish on this idea which makes me nervous about tomorrow. I read an article Saying that when stocks enter this it is rare but sometimes they can see an entire weeks volume in just the one day? That’s ridiculous. so I’m holding firm Hoping this bastard jumps big tomorrow
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Absolutely crazy. Within a half hour the stock was at 20.3 I believe Of course I could’ve got out making more than double on the options but I waited thinking it’d be bullish all day lol. In your opinion what do you make of this stock being added to the Russell index tomorrow ? Of course everyone is bullish on this idea which makes me nervous about tomorrow. I read an article Saying that when stocks enter this it is rare but sometimes they can see an entire weeks volume in just the one day? That’s ridiculous. so I’m holding firm Hoping this bastard jumps big tomorrow
Okay, I guess. But you better have orders in just in case. You don't want to let them expire worthless. No need in losing all your money. Be prepared to cut losses or have a plan to get out with some profit.
I like it. Right now I like it. I have over a 1/3 of my holdings in Russell right now. They are a growing company for sure. The only, obvious, concern is how much of this sudden growth is directly due to the demand for their PPE -- especially the N95s. Maybe, this dries up soon or maybe it is sustainable. I know Hoffman has exercised a few times lately with, of course, good success 8/10 or so and around 24% return. But honestly have not researched their sheet or looked at any of their fundamentals. So, cannot give you an informed opinion. But it has really out-performed the index itself so far, etc.
If I were looking at individual stocks -- I do think this would be looking at.
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Okay, I guess. But you better have orders in just in case. You don't want to let them expire worthless. No need in losing all your money. Be prepared to cut losses or have a plan to get out with some profit.
I like it. Right now I like it. I have over a 1/3 of my holdings in Russell right now. They are a growing company for sure. The only, obvious, concern is how much of this sudden growth is directly due to the demand for their PPE -- especially the N95s. Maybe, this dries up soon or maybe it is sustainable. I know Hoffman has exercised a few times lately with, of course, good success 8/10 or so and around 24% return. But honestly have not researched their sheet or looked at any of their fundamentals. So, cannot give you an informed opinion. But it has really out-performed the index itself so far, etc.
If I were looking at individual stocks -- I do think this would be looking at.
I just wish I could understand the significance of APT being added. Someone mentioned on a different site that the majority of the buying or selling will be in the last hour of trading tomorrow. And everybody long on this stock Is expecting only good things tomorrow because of this addition to the index. Then in response another person said that the stock would’ve increased again today due to the news of the addition coming Friday. Tomorrow is going to be huge. You are correct had I had my orders in place I could’ve locked in profit when it hit above 20 numerous times Yesterday and today. Another goofy question is how I’m down 18% on the trade since Monday. The stock is at 18.6 which is higher than my strike but time decay plays here ?
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I just wish I could understand the significance of APT being added. Someone mentioned on a different site that the majority of the buying or selling will be in the last hour of trading tomorrow. And everybody long on this stock Is expecting only good things tomorrow because of this addition to the index. Then in response another person said that the stock would’ve increased again today due to the news of the addition coming Friday. Tomorrow is going to be huge. You are correct had I had my orders in place I could’ve locked in profit when it hit above 20 numerous times Yesterday and today. Another goofy question is how I’m down 18% on the trade since Monday. The stock is at 18.6 which is higher than my strike but time decay plays here ?
So I’m toying around with it right now with “sell open”. And limit at 19.5 just as a joke. The error message says I cannot open The long and short position on the same stock. I hate to be annoying here but could you walk me through the steps on what you’re talking about when you put in a stop lock on some profits
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So I’m toying around with it right now with “sell open”. And limit at 19.5 just as a joke. The error message says I cannot open The long and short position on the same stock. I hate to be annoying here but could you walk me through the steps on what you’re talking about when you put in a stop lock on some profits
You should put in a one-cancels-all order -- it will have a limit order and a stop order. Once one order or the other is triggered, it will cancel the other order. Whatever site you are using will have the exact terms they use and have a guide on to place the order. Or call and ask them how to place it. But when you go to place your order you should have a few different choices or dropdowns to choose from, etc.
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You should put in a one-cancels-all order -- it will have a limit order and a stop order. Once one order or the other is triggered, it will cancel the other order. Whatever site you are using will have the exact terms they use and have a guide on to place the order. Or call and ask them how to place it. But when you go to place your order you should have a few different choices or dropdowns to choose from, etc.
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