Snype's short term trades in the stock market •$$$$$•

[bs0]

"Yeah I see this all day! That's dope that you see that! The only problem is that to day trade legally, you need 25K of your own money. Once you have it, you make a lot of money with it and they give you 100k to trade with per day!!!"


This is pretty risky, they don't "give" they "loan". If you are wrong and you are leveraging you can lose your home. That is what you call Gambling.

 

[Snagglepuss]

My mother told me story ,awhile back .My father came to her and said " i dont what were gonna do " He had lost basically most of their life/retirement savings ,he was playing it all in the market and it crashed,not as a day trader though.He waited around and evetually things turned around again.He is still into the stocks big time to this day.He always told me ,never buy anything on margin.

Cause the losses can be infinite,i still plan on shorting some in the future .When money comes around again.Its definitly a gamble,but something like really bad news ..Does seem like it would be occasional easy money....

 

[Snype]

"Yeah I see this all day! That's dope that you see that! The only problem is that to day trade legally, you need 25K of your own money. Once you have it, you make a lot of money with it and they give you 100k to trade with per day!!!"


This is pretty risky, they don't "give" they "loan". If you are wrong and you are leveraging you can lose your home. That is what you call Gambling.

It would be very very rare for that to happen with the 4x margin because you are forced to sell it by the end of the day. I know what your trying to say but they protect themselves by giving you margin calls and eventually you get a fed call. Once you dip below 25k, they take away your 4x buying power until you satisfy your equity. Because people reading this grow trees, they have access to large amounts of cash that don't make it to the bank for a while. The amount that they are able to get in the market is a smaller percentage than what they have cause they make money on their grows every 2-3 months. If they choose to take more risk and use the margins, it is best that they have that in cash in case any calls need to be made. If you go into the market with a gamblers mentality, it won't be good. It seems much better to me, for us to make our money work for us and we know how much risk we are willing to take. We all develop our own trading strategies that work for us.

My mother told me story ,awhile back .My father came to her and said " i dont what were gonna do " He had lost basically most of their life/retirement savings ,he was playing it all in the market and it crashed,not as a day trader though.He waited around and evetually things turned around again.He is still into the stocks big time to this day.He always told me ,never buy anything on margin.

Cause the losses can be infinite,i still plan on shorting some in the future .When money comes around again.Its definitly a gamble,but something like really bad news ..Does seem like it would be occasional easy money....

That's a funny story! Sounds like your dad turned it around and got it going good again! If you have a lot of self control and you use the margin on higher percentage trades, you can do well but if you use it just to use it, you can lose easier. If it wasn't for the margin, I wouldn't even be trading. The margin makes it better for people like us cause you don't have to show that extra money they loan you. You can create a lot of wealth in a short period of time. You can just not trade all year and make 2 trades on big news and easily make 20% on your money but because you know to wait for big news it will be more in your favor for the most part so if you used a 2x margin on that, you would make at least 40% on your money on 2 trades for the year. Do some research on bad news in the past and look at the graph of the stock when it was happening. Sometimes you can make a lot more but in my mind that seems pretty modest. It's all about self control though and it can be hard sometimes to have that much control.

 

[ArcticBlast]

here's a stock market simulator from investopedia, i've been playing around with it a little http://simulator.investopedia.com/

can someone explain this Margin thing a little more? is it basically just a loan that you actively trade with? this isn't for the people that just get started, right? and a margin call is when they get pissed and tell you to pay up? what i'm not understanding: do these people (brokers, i'm guessing) have access to your account/portfolio? how do they know if you get below a certain amount? or do you tell them specifically what you're going to be buying with it before you make the purchase/take the debt?

investopedia:

What Does Margin Mean?
1. Borrowed money that is used to purchase securities. This practice is referred to as "buying on margin".

2. The amount of equity contributed by a customer as a percentage of the current market value of the securities held in a margin account.

3. In a general business context, the difference between a product's (or service's) selling price and the cost of production.

4. The portion of the interest rate on an adjustable-rate mortgage that is over and above the adjustment-index rate. This portion is retained as profit by the lender.
Investopedia Says
Investopedia explains Margin
1. Buying with borrowed money can be extremely risky because both gains and losses are amplified. That is, while the potential for greater profit exists, this comes at a hefty price - the potential for greater losses. Margin also subjects the investor to a number of unique risks such as interest payments for use of the borrowed money.

2. For example, if you hold futures contracts in a margin account, you have to maintain a certain amount of margin depending on how the market value of the contracts change.

3. Gross profit margin (which is the difference between revenue and expenses) is one measure of a company's performance.

4. The formula for calculating the interest rate on an adjustable-rate mortgage is the adjustment-index rate (e.g. Treasury Index) plus the percentage of the margin. For example, if the Treasury Index is 6% and the interest rate on the mortgage is 8%, the margin is 2%.

What Does Margin Call Mean?
A broker's demand on an investor using margin to deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin. Margin calls occur when a you account value depresses to a value calculated by the broker's particular formula.

This is sometimes called a "fed call" or "maintenance call".
Investopedia Says
Investopedia explains Margin Call
You would receive a margin call from a broker if one or more of the securities you had bought (with borrowed money) decreased in value past a certain point. You would be forced either to deposit more money in the account or to sell off some of your assets.

http://www.investopedia.com/university/margin/

i'm still reading, i'm just trying to keep up with all you hotshots lol take care, and thanks again for the thread!!

ArcticBlast

 

[CrumpleZone]

Margin is like a Chainsaw.

Margin is like a Chainsaw.

Margin is stock market talk for a loan. Different brokers charge different interest rates. Be sure you know what your margin is costing you.

People use margin for different reasons. The worst reason is being undercapitalized. If you can't afford all the stock you want to buy, your broker will instantly loan you an ammount calculated on the value of your account.

Go back to Investopedia and check the definition for "enough rope to hang oneself with"

When you invest on margin, your account needs to maintain a minimum dollar value. Once the value drops below the benchmark determined by your broker, you become subject to a "margin call" which requires the trader to either post additional funds or sell stock in order to bring the account's value back to the predetermined minimum value. Normally there is a 3 day grace period, but for daytrading this call can become effective immediately. For equity daytraders, brokers will normally loan you Four times the equity you have in your account. Trading on margin allows a trader to trade more shares, hopefully making money faster. Unfortuately, it's also a good way to blow your account to smithereens with amazing speed and ferocity if you're trading over your head, because that door swings both ways. While the fully margined equity trader can also make money Four times faster she can also lose it Four times faster.

So margin is a tool. Like a chainsaw. One must be very careful when using either.

Insisting upon holding a stock purchased on margin as it loses value can be a very costly practice. Most savvy traders will not add new money to their accounts when they get a margin call, and immediately sell instead. The first loss is always the easiest to take.

You don't have to trade on margin, you can always trade within your means, but you have to have a marginable account if you plan to play the short side of the market.

 

[stanky bud]

what do you think about sharebuilder?? I was thinking about getting an account and buying a few stocks.

 

[CrumpleZone]

sharebuilder

sharebuilder

what do you think about sharebuilder?? I was thinking about getting an account and buying a few stocks.

Sharebuilder is awesome. Great for longer term investing. Not so much for daytrading.

 

[Snagglepuss]

margin in laymans terms is basically-- u think stock "x" is overvalued...So the broker lends u however many shares at the current price and sells them......When the stock goes down ,you buy them back at the cheaper price ....and keep the difference in profit.....

You could easily make %100 on your return,but if the stock goes up....way up ....you could be owing 1-2-3x's %100/200%/300% the amount you started with ....But if you wait for really bad news ,it seems like a good risk to take i suppose.......

 

[CrumpleZone]

You're thinking of Shorting

You're thinking of Shorting

margin in laymans terms is basically-- u think stock "x" is overvalued...So the broker lends u however many shares at the current price and sells them......When the stock goes down ,you buy them back at the cheaper price ....and keep the difference in profit....

You're describing shorting here... i think. Definitely not margin.

 

[DeRail640]

I would not tell anyone to get into the market right now. The Market is falsely inflated right now and the DOW will drop to under 8K in the next year. I have been playing the game for many years now.
I will not give advice but will Help people get informed and let them make their own Decisions. Precious metals are going to take a bit of a dip in the near future then it will be time to buy again. "sell by May and Walk away , buy by Nov or you wont remember"

read here

http://goldismoney2.com/forum.php

 

[DeRail640]

Are you really that stupid? Are you trying to say that the dow isn't going to go way past 14,000 in the next 10 years? If you really think it won't continue to rise over long periods of time, then you are truly a moron. Here's some history of the dow jones for you:


In 2010 the dow is at: 10,000 but will continue to rise
In 2020 the dow will be at 15,000 minimum and you'll see

Snype Who is buying the Products? The feds just announced 3 days ago that they don't expect recovery for another 5-6 years companies don't have profits with out selling their products and with no jobs nobody is buying. and the way the feds a printing money we will hit hyper inflation look at zimbabwe. I have to go now but i like this thread i will elaborate more later.

 

[robbiedublu]

I would not tell anyone to get into the market right now. The Market is falsely inflated right now and the DOW will drop to under 8K in the next year. I have been playing the game for many years now.
I will not give advice but will Help people get informed and let them make their own Decisions. Precious metals are going to take a bit of a dip in the near future then it will be time to buy again. "sell by May and Walk away , buy by Nov or you wont remember"

read here

http://goldismoney2.com/forum.php

+1,000,000 !!

 

[CrumpleZone]

Sounds like a great short opportunity to me...

Sounds like a great short opportunity to me...

If you're right that is. If you were really sure that the Dow was gonna tank another 2000 points you would be extolling the virtues of the short side. Wouldn't you? Rather than talking about how nobody should be trading? The market is really nothing more than a place to express an opinion.

I Believe that the short side is normally easier to trade and more profitable than the traditional long side. You will find that most experienced swing and day traders agree.

That said, newbies should get educated before they start considering the short side of the market. It can take your head off.

I would not tell anyone to get into the market right now. The Market is falsely inflated right now and the DOW will drop to under 8K in the next year. I have been playing the game for many years now.
I will not give advice but will Help people get informed and let them make their own Decisions. Precious metals are going to take a bit of a dip in the near future then it will be time to buy again. "sell by May and Walk away , buy by Nov or you wont remember"

read here

http://goldismoney2.com/forum.php

 

[DeRail640]

If you're right that is. If you were really sure that the Dow was gonna tank another 2000 points you would be extolling the virtues of the short side. Wouldn't you? Rather than talking about how nobody should be trading? The market is really nothing more than a place to express an opinion.

I Believe that the short side is normally easier to trade and more profitable than the traditional long side. You will find that most experienced swing and day traders agree.

That said, newbies should get educated before they start considering the short side of the market. It can take your head off.

the shorts are one of the reasons that caused this problem in the first place. A lot of people betting money the didn't have to cover them.

 

[CrumpleZone]

It's fashionable to blame the shorts...

It's fashionable to blame the shorts...

the shorts are one of the reasons that caused this problem in the first place. A lot of people betting money the didn't have to cover them.

But it's not founded in fact. Most people don't realize that there is a counter party to every trade. For you to successfully short a stock, there has to be another guy who believes just as strongly as that the stock is going to rise.

Short sellers were blamed for the market crash so that those really responsible for the horrible downdraft in the market could be protected, and ultimately bailed out. This isn't the first time this has happened. Check your market history.

Or just watch this short video from the Cato Institute:

http://www.cato.org/event.php?eventid=6986

 

[zenoonez]

the shorts are one of the reasons that caused this problem in the first place. A lot of people betting money the didn't have to cover them.

I can't think of a way in which stock shorting caused any of the problems we are in today. The problems we are in today are squarely on the shoulders of investment bankers peddling mortgage backed securities that were really backed by ARMs and other subprime lendings. Or that is how it looks from my point of view lol.

 

[Snype]

here's a stock market simulator from investopedia, i've been playing around with it a little http://simulator.investopedia.com/

can someone explain this Margin thing a little more? is it basically just a loan that you actively trade with? this isn't for the people that just get started, right? and a margin call is when they get pissed and tell you to pay up? what i'm not understanding: do these people (brokers, i'm guessing) have access to your account/portfolio? how do they know if you get below a certain amount? or do you tell them specifically what you're going to be buying with it before you make the purchase/take the debt?

investopedia:

What Does Margin Mean?
1. Borrowed money that is used to purchase securities. This practice is referred to as "buying on margin".

2. The amount of equity contributed by a customer as a percentage of the current market value of the securities held in a margin account.

3. In a general business context, the difference between a product's (or service's) selling price and the cost of production.

4. The portion of the interest rate on an adjustable-rate mortgage that is over and above the adjustment-index rate. This portion is retained as profit by the lender.
Investopedia Says
Investopedia explains Margin
1. Buying with borrowed money can be extremely risky because both gains and losses are amplified. That is, while the potential for greater profit exists, this comes at a hefty price - the potential for greater losses. Margin also subjects the investor to a number of unique risks such as interest payments for use of the borrowed money.

2. For example, if you hold futures contracts in a margin account, you have to maintain a certain amount of margin depending on how the market value of the contracts change.

3. Gross profit margin (which is the difference between revenue and expenses) is one measure of a company's performance.

4. The formula for calculating the interest rate on an adjustable-rate mortgage is the adjustment-index rate (e.g. Treasury Index) plus the percentage of the margin. For example, if the Treasury Index is 6% and the interest rate on the mortgage is 8%, the margin is 2%.

What Does Margin Call Mean?
A broker's demand on an investor using margin to deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin. Margin calls occur when a you account value depresses to a value calculated by the broker's particular formula.

This is sometimes called a "fed call" or "maintenance call".
Investopedia Says
Investopedia explains Margin Call
You would receive a margin call from a broker if one or more of the securities you had bought (with borrowed money) decreased in value past a certain point. You would be forced either to deposit more money in the account or to sell off some of your assets.

http://www.investopedia.com/university/margin/

i'm still reading, i'm just trying to keep up with all you hotshots lol take care, and thanks again for the thread!!

ArcticBlast

Crumple explained the margin pretty well. Individual stocks have different margin maintenance requirements depending on which company you use to buy your stocks. Some stocks have special margin requirements and some stocks can't be bought on margin. You have to look at the lists to see what all the requirements are cause they do change. The margin is a tool just like Crumple said but you can get real fucked when markets crash cause they change margins to protect themselves (at least on Etrade). To be able to trade on a 2x margin on Etrade, you have to set up an account with at least $2,000. For a 4x margin you have to have an account with $25,000 in it. In rare situations like what happened in the market from Jan 2009 - March 2009, they took away a lot of the margins (esp in the financials) so a lot of people got fucked. After all the stress tests came in, the margins came back. That's why it's good to have your margins at home in cash just in case something like that happens.

Margin is stock market talk for a loan. Different brokers charge different interest rates. Be sure you know what your margin is costing you.

People use margin for different reasons. The worst reason is being undercapitalized. If you can't afford all the stock you want to buy, your broker will instantly loan you an ammount calculated on the value of your account.

Go back to Investopedia and check the definition for "enough rope to hang oneself with"

When you invest on margin, your account needs to maintain a minimum dollar value. Once the value drops below the benchmark determined by your broker, you become subject to a "margin call" which requires the trader to either post additional funds or sell stock in order to bring the account's value back to the predetermined minimum value. Normally there is a 3 day grace period, but for daytrading this call can become effective immediately. For equity daytraders, brokers will normally loan you Four times the equity you have in your account. Trading on margin allows a trader to trade more shares, hopefully making money faster. Unfortuately, it's also a good way to blow your account to smithereens with amazing speed and ferocity if you're trading over your head, because that door swings both ways. While the fully margined equity trader can also make money Four times faster she can also lose it Four times faster.

So margin is a tool. Like a chainsaw. One must be very careful when using either.

Insisting upon holding a stock purchased on margin as it loses value can be a very costly practice. Most savvy traders will not add new money to their accounts when they get a margin call, and immediately sell instead. The first loss is always the easiest to take.

You don't have to trade on margin, you can always trade within your means, but you have to have a marginable account if you plan to play the short side of the market.

Nice explanation!

what do you think about sharebuilder?? I was thinking about getting an account and buying a few stocks.

I've personally never used sharebuilder but whatever you use to buy and sell stock will work.

margin in laymans terms is basically-- u think stock "x" is overvalued...So the broker lends u however many shares at the current price and sells them......When the stock goes down ,you buy them back at the cheaper price ....and keep the difference in profit.....

You could easily make %100 on your return,but if the stock goes up....way up ....you could be owing 1-2-3x's %100/200%/300% the amount you started with ....But if you wait for really bad news ,it seems like a good risk to take i suppose.......

Like Crumple said I think your talking about short selling.

I would not tell anyone to get into the market right now. The Market is falsely inflated right now and the DOW will drop to under 8K in the next year. I have been playing the game for many years now.
I will not give advice but will Help people get informed and let them make their own Decisions. Precious metals are going to take a bit of a dip in the near future then it will be time to buy again. "sell by May and Walk away , buy by Nov or you wont remember"

read here

http://goldismoney2.com/forum.php

Maybe you're right, maybe not. Nobody really knows where the market is going in the short term but that doesn't mean that some individual stocks won't rise as the market is falling. I remember when the market was crashing from Jan 2009 - March 2009, Smith and Wesson (SWHC) was going up and went from $2.16 - $6.80 right when the rest of the market was crashing. I hope that you're right and the Dow does go to 8000 cause I'll personally make a lot more money if that happens but I don't see it happening. I feel you about buying in November though but I have a feeling that once all this quarters earnings come out, the market will start going up. The lowest I think the Dow will reach will be 9500 but who really knows what will happen. I hope gold will go back down to $1000 an ounce so I can buy a lot more for the future. I was so happy when it dipped below $800 and when oil hit below $50.

Are you really that stupid? Are you trying to say that the dow isn't going to go way past 14,000 in the next 10 years? If you really think it won't continue to rise over long periods of time, then you are truly a moron. Here's some history of the dow jones for you:

In 2010 the dow is at: 10,000 but will continue to rise
In 2020 the dow will be at 15,000 minimum and you'll see

Snype Who is buying the Products? The feds just announced 3 days ago that they don't expect recovery for another 5-6 years companies don't have profits with out selling their products and with no jobs nobody is buying. and the way the feds a printing money we will hit hyper inflation look at zimbabwe. I have to go now but i like this thread i will elaborate more later.

I understand your reasoning but people are buying and the market was less than 7000 in March 2009 and now it is at 10,000. There are plenty of good buys right now and plenty of ways to short the market, if it does dip down like you say. I don't know about comparing the US market to Zimbabwe. You seem like you know a lot though so I'm interested in hearing more about your ideas. I'm glad that you like the thread!

If you're right that is. If you were really sure that the Dow was gonna tank another 2000 points you would be extolling the virtues of the short side. Wouldn't you? Rather than talking about how nobody should be trading? The market is really nothing more than a place to express an opinion.

I Believe that the short side is normally easier to trade and more profitable than the traditional long side. You will find that most experienced swing and day traders agree.

That said, newbies should get educated before they start considering the short side of the market. It can take your head off.

I like your way of thinking Crumple! It's so much easier for me to make money shorting stocks than going long but I still get in some stocks long and I save money to buy more if it goes down. If it wasn't for the short sell, I probably wouldn't consider investing.

But it's not founded in fact. Most people don't realize that there is a counter party to every trade. For you to successfully short a stock, there has to be another guy who believes just as strongly as that the stock is going to rise. People who don't know what they're doing need to watch safely from the sidelines.

http://www.amazon.com/Dont-Blame-Shorts-Sellers-Repeating/dp/0071636862

Very good point!!! You're a smart guy!

 

[RetroGrow]

margin in laymans terms is basically-- u think stock "x" is overvalued...So the broker lends u however many shares at the current price and sells them......When the stock goes down ,you buy them back at the cheaper price ....and keep the difference in profit.....

You could easily make %100 on your return,but if the stock goes up....way up ....you could be owing 1-2-3x's %100/200%/300% the amount you started with ....But if you wait for really bad news ,it seems like a good risk to take i suppose.......

Wow!
The disinformation in this thread, starting with Snype's BS and now this comment?
You should not be in the market at all, as you don't know the basics.
Margin means you are borrowing money from the broker to make trades. In other words, gambling with money you don't have.
"Shorting" a stock is what you described.
If you are confused about that, you need to do a lot of homework before investing, and definitely don't listen to nitwits like Snype, who demonstrates his ignorance with each post.

 

[RetroGrow]

Are you really that stupid? Are you trying to say that the dow isn't going to go way past 14,000 in the next 10 years? If you really think it won't continue to rise over long periods of time, then you are truly a moron. Here's some history of the dow jones for you:


In 2010 the dow is at: 10,000 but will continue to rise
In 2020 the dow will be at 15,000 minimum and you'll see

Snype Who is buying the Products? The feds just announced 3 days ago that they don't expect recovery for another 5-6 years companies don't have profits with out selling their products and with no jobs nobody is buying. and the way the feds a printing money we will hit hyper inflation look at zimbabwe. I have to go now but i like this thread i will elaborate more later.

Snype has already proven that he is a complete, flaming, bragging moron.
His stupid statement that the market always goes up over time is just an exclamation point to the other disinformation he has posted. There are no guarantees that the market will go up or down in any given time frame. His statement that the market will go way over 14000 in the next 10 years is idiotic. There is no guarantee that the market won't completely collapse. It could easily fall back to 7000 in the next year, just like the collapse in 2008.
No one knows what the future will bring, least of all Snype. Rarely have I seen so much ignorance displayed by one individual.

 

[Sam the Caveman]

If I don't like a thread, I don't show up