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Bromagnon
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SilentAssassin
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- Posted: October 29, 2011 4:51:18 pm
- It is what it is. I see your views and think you make very valid point. I think my problem is I see both sides for the right and wrong. Some days I think I agree with you and others I don't totally for me it is more how I personally feel on that day
I do think there are a TON of traps for the middle class and lower that help keep them there so they never move up. We can debate anything back and forth all day but we agree there are big problems that need and should be resolved but never will.
How much do you know about stock and options trading?
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Bromagnon
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SilentAssassin
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- Posted: October 30, 2011 8:49:01 am
- I spent some time about 8 months buy and selling stocks and it is amazing how you can buy and sell the stock within an hour and make several hundred dollars a day doing basically nothing. The problem is being caught in between the reports that come out and knowing where to get the reports before MSNBC reports it on TV. There is like a 5 min delay between the report and when it is reported so it gives you a small window to buy on good news and sell if its bad news. It is pretty interesting. The most interesting part is that you can buy and sell options in stocks and make money if the stock goes down, sideways or up.
I have so much knowledge of some of that stuff...I am not advanced however I know enough to build off of and be very dangerous. I was trading stock options on drug companies and when the FDA would approve the drug the stock would surge and it was amazing what you could do. (Going back to our discussion the money you make is not taxed at a working rate it is taxed at capital gains rate which is like half of the normal take rate almost.) The whole market is really set up for people with money as if you are on the sell side of options you can make a TON and if you are on the buy side you can SOME but depending on how the buy side is working out you can make a TON or lose it ALL. The sell side is much safer so what you have is the people who are on the buy side are the people that are "hoping" to make money or "hoping" the stock will move how they need it to move. The people on the sell side commit to buy or sell stocks and get paid premiums to do so per share. The sell side people really don't care if their stock OR option sells or not because they use the stock OR option as an instrument to make money. IF it sells they move on to the next opportunity and they are happy. IF it does not sell they keep the stock and the premium and just put themselves into another identical situation the following month and again either way they don't care.
The difference between the buy side and sell side is TIME VALUE, if you are on the buy side the first two weeks is play time the last two weeks is where your value in the stock diminishes and you RISK losing all your money.
It gets much more complicated than that but it gives you a taste. An Option is a derivative of stocks which because Options are being traded is why the market never always goes up and never always goes down. It is why the market can drop like a rock in a day and shoot higher than the sky in a day. It is all about option trading which is what moves the markets primarily. The starting day of the month is the FIRST MONDAY after the THIRD FRIDAY of each month. So if you watch the markets from the third Friday of each month to the next third Friday of the following month you will see the market has certain patterns and that the market does not move how most people think on a month to month basis as it is a rolling month to month.
In the end the system is not for people like you or I, the best way to make a TON of money is to swim behind the big sharks and take the leftovers they leave behind but you HAVE to stay out of their way. If you don't you will be crushed. Even the left over crumbs is more than you and I could imagine making on some stocks so don't think the crumbs is a small amount of money. In this game it is better to be a follower than a leader. I make the mistake to be a leader one time and it has killed me financially.
I am not afraid to get back into the game because I know what happened but it does not deter me from trying again. I am wiser for my greedy mistake and I know I can really supplement my income once I can get back on my feet. It is all very interesting and amazing how things work. It is no wonder why the rich stay rich and the poor stay poor. The rich has control of all company policies so no more pensions for workers most places offer a 401k match which require people to save for retirement in the markets, bonds etc. The selling point is well you make 10% over ten yours your doing great and in 20 years blah blah blah. So the worker invests not knowing what they are doing or about all the hidden fees if you move your funds between investment options too many times or they do not know how to move the funds to protect themselves. So the 401K funds are subject to market volatility and that is subject to options trading. The 401K is diversified investing meaning not too much money in one sector of the economy. What people do not know is that 1 fund in the 401 is already diversified so what they do is they take 100% and divide it up into multiple percents into different investment funds. That is the first big mistake. If you have a 401K you put 100% into 1 fund (the 1 fund is already diversified within itself). So the best way to handle a 401K is to put the money into money markets and bonds. You will not lose money and only make money in bad markets but in up markets you will lose the potential of money if the market goes up. SO what happens is people in safe bonds etc see the market is going up and they are late to the dance, they move the money from the bonds and money markets to the market and then the market falls thus losing money. It leaves a bad taste in their mouth and until at some point in the future they get up enough nerve to try and again and thus the same result.
401Ks are subject to the jobless reports and all other major domestic and international reports even the debt issues in Europe moves our markets. 401K is a way for the rich to control the money of the average American without the unsuspecting people knowing.
If you are buying stocks to hold your not smart, stocks can make you money on the long term but the stock is again an instrument. You use it to buy and sell and make your money and move on. In Buffets case he knew stocks move in patters and that is how he made is millions. I personally have bought Amazon stock several times in the past and made a TON of money from it just moving up selling and waiting then re buying and jumping out of it again. People are told to buy and hold which is not the way to buy stocks. When you sign up for electronic trading you check mark a box that asks you if you want to receive a physical copy of the stock (most people say no) they check mark the box and that allows the provide (ETRADE etc) to buy and sell "Phantom copies of the stock" via the options market. If everyone bought stock and requested stock certificates there would be no options trading. It is too much of a hassle to sell the stocks if you have certificates and so people elect not to get them which gives the rich more control as now the rich can buy and sell phantom copies of their shares of stock.
The phantom copies make up the Options Trading markets.You can (basics) Sell a Put, Buy a Put, Sell a Call, Buy a Call.
Sell a Put means you are going to collect a premium and you will commit to buy a stock if it falls below X at expiration.
Buy a Put means you will pay a premium and will only buy a stock if it falls below X at expiration.
Buy a Call means you pay a premium and will buy a stock if it goes up to X at expiration.
Sell a Call means you collect a premium and will sell your stock if it goes to X at expiration.
I think this is the most I can tell you at the moment thinking of everything I can but I am sure I know a lot more to share if you have specific questions......The RICH know the above and the poor and middle class are victims and the sad part is no one speaks about it and it is not on the nightly news because the people who control the news is the same people their viewers so there is no impartial justice there. (That falls as a point into your argument about the political corruptness.).
Thoughts?
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Bromagnon
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SilentAssassin
Wise Beyond the Years
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- Posted: November 4, 2011 8:50:58 am
bromagnon said:Okay, now I have four months with nothing to do, so onto a reply! Thanks for the info. I definitely have questions but the first three are: a) What on earth is a 401k? Please see http://en.wikipedia.org/wiki/401(k) b) So basically phantom copies are essentially stocks that can be bought/sold knowing that once they drop/reach price x they're going to be available; like an anticipation that there is going to be a demand or a surplus? If the stock purchaser agrees to allow the exchange company Etrade etc to not send them a physical share of the company they own then they also allow the exchange company to sell the same exact share to someone else. So if there is 500 shares for sell of ebay then as long as the exchange company does not issue physical hard copy shares to the stock holders then then exchange company can sell 1,000 shares or more of that same stock even though 500 exist. c) So should one opt to receive a physical stock copy? Surely not, if the best way to make some decent money (from what I understood from your post) is to rely on a short turn around. Wouldn't it take too long to get a physical copy? Can you even sell until physical copies are handed over? How does that work? The best way is to not get the physical copies you are correct but if you do not request physical shares you are allowing the exchange company to make more money. Plus as long as you bought the stock and hold it it allows the option trades to buy and sell the same shares of stock you hold without buying them. To be honest, I can kind of see how your opinion has been formed (regarding our early debate) on capitalism. Obviously you've mentioned that the stock exchange is a way to keep some of the 'normals' down via exploitation, but it is possible for us mere mortals to make money. But how many of the poor would learn the things you know without getting killed financially (as you yourself said happened to you)? How many would bother to find out? Yes it's again a choice, but it doesn't seem easily accessible.
Funny you mention that because when Obama was running for President a reporter asked him a question about options trading and tax rates and he dodged the question by saying something in the sense that they should ask a different question. The reporter totally did and he never answered another question...the assumption is that the average American is uneducated financially and this information would only confuse the voter. Not too mention the fact that the American people are to be kept in the dark of what option trading really is. The reasoning is because it is too risky for the American public but in reality what is risky is buying and holding a stock. No yes everyone has access to this same information but most people would never understand it. The thought of buying an option and hoping the stocks go down is crazy, who would do it? That is why they made a big deal about the uptick rule so when a stock was crashing it had to have a positive uptick in the price before it continued to go down in order for the option trader to sell it and make a profit.
The information is out there but people do not talk about it. It is very easy for anyone to get destroyed by playing this game but the same could be said for buying and holding stocks. In America the public is the last to know and the first to lose their money.
To be clear I did not get killed by the market as I knew the risk before hand, I am responsible for my greedy decision and I killed myself by being too greedy. So the lesson here is the market does not hurt us as investors we hurt ourselves as we all again...we have a choice to get out and take a profit or wait for more money. We can get out and take a loss or wait for it to come back. Choices is the theme and I destroyed myself.
The sooner that Americans wake up and realize that we ourselves are to blame for this recession/depression the sooner we can turn things around. Everyone wants to blame the RICH for this housing market calling them greedy, well they were greedy but so was every other American trying to buy homes and flip them for great profit and driving up home values beyond the actual value. Everyone was to blame for this economy. The smart people were the ones who bought a home they could afford and live within their means and did not allow their 401 to be manipulated by the swings on the market.
I cannot stress this enough.....everyone has a choice over their own actions. An accident is something that happens to oneself outside of our control but anything we had a choice in becomes our own fault.
I am determined to get back to where I was trading again one day because well it was amazing I could create money without trying it was a RUSH but I have never been a conservative person with money in the past so I think I got what I deserved.
You had great questions....got any more?
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Bromagnon
Grasshopper
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SilentAssassin
Wise Beyond the Years
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- Posted: November 6, 2011 11:26:53 am
- If most don't ask for physical copies, doesn't that mean that the exchange companies can essentially exponentially increase the number of shares available? How is that fair? It seems like it is slanted so that the best option for the average person also happens to make them more money as well.
Yes, it is not fair but it is what they do and what you agree to when you sign up for trading stocks online. If you do not agree you cannot trade stocks. This is true I I understand your question correctly about it being slanted.
The short term market is a gamble, if you know how to read balance sheet, income statements and cashflow statements then you can put yourself in a good stable situation.
You can use a stock broker but they charge you a TON its easier and cheaper to do it yourself.
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durer73
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- Posted: November 8, 2011 7:03:35 pm
- I am late to the topic, to much stuff going on here. You guys have really be going at it. That is good. I will put my 2 cents in based on previous posts.
First the credit card companies in the US are partaking in Usury, and use such to prey on the uniformed.
From Wikipedia
Each U.S. state has its own statute which dictates how much interest can be charged before it is considered usurious or unlawful.
If a lender charges above the lawful interest rate, a court will not allow the lender to sue to recover the debt because the interest rate was illegal anyway. In some states (such as New York) such loans are voided ab initio.
However, there are separate rules applied to most banks. The U.S. Supreme Court held unanimously in the 1978 Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp. case that the National Banking Act of 1863 allowed nationally chartered banks to charge the legal rate of interest in their state regardless of the borrower's state of residence.[37] In 1980, because of inflation, Congress passed the Depository Institutions Deregulation and Monetary Control Act exempting federally chartered savings banks, installment plan sellers and chartered loan companies from state usury limits. This effectively overrode all state and local usury laws.[38][39] The 1968 Truth in Lending Act does not regulate rates, except in the cases of some mortgages, but it does require uniform or standardized disclosure of costs and charges.[40]
In the 1996 Smiley v. Citibank case, the Supreme Court further limited states' power to regulate credit card fees, extending the reach of the Marquette decision. The court held that the word "interest" used in the 1863 banking law included fees, and, therefore, that states could not regulate fees.[41]
Some members of Congress have tried to create a federal usury statute that would limit the maximum allowable interest rate, but the measures have not progressed. In July, 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act, was signed into law by President Obama. The act provides for a Consumer Financial Protection Agency to regulate some credit practices, but does not have an interest rate limit
End Wikipedia entry
http://en.wikipedia.org/wiki/Usury
Insurance is a giant ripoff. Insurance is the only business that can charge you for a service and refuse to deliver the product.
We need to have a 2 term limit for politicians period serving the people is not a politician's job. his job is to keep his/hers. That is why we have people in congress who have been in office for 30 or 40 years. And as for the ability for the public to vote them out of office ask a minority in Texas if he has any say in who will be elected next year. Also check out the benefits that our elected members of congress.
http://usgovinfo.about.com/od/uscongress/a/congresspay.htm
I bet if we restructured their benefits we could seriously cut the budget. (...290 had retired under CSRS and were receiving an average annual pension of $60,972) I do believe that my 75 year old grandma gets about $900 a month in SS, she should have ran for congress then she would not be struggling to make ends meet).
http://marketplace.publicradio.org/display/web/2010/09/07/am-how-many-millionaires-are-in-congress/
Student loans in there current form are a way to create a permanent poor/working class. I can not save for my child's college education because it is going to take me 30 years to pay off the $35000 that I borrowed to go to school. And for that $35000 I received a degree that the state no longer decided that it needed, so I get to be one of I don't know how many unemployed Art/History Teachers.
Lastly remember that we have the best health care system in the civilized world. (yeah right) The US really needs a single payer system (my family health insurance plan is $430.18, my mortgage is $480 and lastly my student loans are $292 (until 2013 when the new company that purchased my loan is planning on raising the payment to $421. Oh, don't forget that my interest rate on my wonderful education is 7.5% and interest rate on my mortgage is 6%.)
SilentAssassin,
I thought that they were at one time suggesting a law that stop the selling of phantom shares to help stabilize the market?
OK, my blood pressure is now up, maybe I need to take 2 pills today?
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SilentAssassin
Wise Beyond the Years
lifetime member Location: Midwest
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- Posted: November 8, 2011 7:33:38 pm
- If they no longer allow phantom shares than that would put an end to Options trading and that will probably never happen. An option is a derivative of stocks like Orange juice is a derivative of Oranges.
There should be a term limit on Congress that would solve a ton of problems and keep things in better focus and make our country more efficient. It would allow people to run and help make a difference for the US. Almost every other position have term limits so should Congress.
Credit Cards well .... lets say I have been in debt filed a BK and got out and back into debt and am choosing to not file another BK because I am going to work through the debt that I have in some cases I have paid off my debts once it was filed in court. The reason I chose to do that is because once there is a court case filed they can only bill me 1 time and not the 2 or 3 times many junk debt collectors try to collect on. I have re established credit again and am being very good. I know all about card companies trying to screw you over. I finally have learned my lesson about credit cards and staying out of trouble. Slowly but surely you can work through bad debts and recover but it takes time.
Student Loans well you are correct that is a way to keep you in debt plain and simple. I am not in debt but my wife has 27k and NO degree to show for it. SO it stinks but that is something that we still yet to work through. That ball is rolling my way next year.
There should be a Health Care system in place nationally I think. It would make sense and I hope that "Obama Care" stands. I knew that once it passed it would go to the Supreme Court so hopefully they uphold it and it gets pushed into law. The Health Care we have is the best in the world but not everyone has access to it and that is sad. The prices they charge are crazy and many of the companies are for profit so we already overpay because they have to make a profit.
Hope you had some good pills.
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