Hello! In this chat thread, we encourage you to ask any questions you may have, or simply start a conversation regarding economics, investing, budgeting, news analysis/interpretation, and anything else that has to do with money and finance.
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Please do not ask me to do the research on something for you, as it can get difficult to answer many of these type of questions.
It has a nice rising support line on the 6th month graph which seems to be pretty promising. My answer depends on what your profit is (in percentage) and what your position is (bought calls, sold puts, shares). Other than that, I don’t know too much about this stock, so I would just hold what you have right now.
I own ten shares of Boeing that I bought for $200. On Friday (past) I sold covered calls for Jun 26 to try and minimize my loss if the shares were to tank over the weekend. Today the market opened negative and rallied but kept hitting a resistance all the way till close causing me to think it would tank again. So trying to further protect my downside I sold calls for 220 strike price for Jun 26, with the intent of closing them in the morning should the market trend sideways. It has gone up $5 after hours and looks like it might gap up in the morning. ANy ideas or suggestions on how you would approach this to minimize losses? Thank you so much for your help!
Ok so for your covered calls. At this point, I don’t think there is much you can do to minimize losses, other than cut the position and take the losses to stop from further downside. Although, I do feel that this market is still risky, and in my opinion, it would not be a bad idea to hold onto a few of those covered calls as a hedge. The Boeing shares will be at only a slight loss come morning, if the market opens the way it is now. Hold the shares (bullish) keep the small hedge in case of another red day.
Or buy back the calls for a loss and keep the shares.
You could also buy a call for a different strike price (bullish) although this is risky, and if you are familiar with implied volatility, it may not be the best idea, but it is a possible move to make if you feel up to it.
That’s all that I can really think of at the moment.
FB is currently at 234.5 after hours. Therefore, if futures stay where they are, FB would have to move up at least 5.5$ to hit 240, a roughly 4-4.5% change from today’s close. If the market rises more before open or even after, I think it is possible, but at this point, I wouldn’t count on it. The market could make a huge move like it did today, but that does not happen all too often. Although, due to recent volatility, I would be more confident, but once again, I wouldn’t count on it.
Thanks Josh, greatly appreciated! I have a few contracts 240 call expiring 6/19. Just wanted check if I need to wait for a day or two. OR should I sell it tomorrow. Avg price was 1.75. The current price is 1.14.
Ok. If you are in the profit come market open, I would suggest selling maybe 25-50% of your position in calls. Honestly, it’s up to you and your risk tolerance.
Just be mindful that investors are on the edge after what happened last week and on Monday. This is one approach.
The other, and my more recommended would be to sell the whole position or most of it at open if you are in profit or only a slight loss. If you are familiar with time decay, it will destroy your contracts, and even if FB is green, your contracts have a good possibility of being red on the day. Also with implied volatility, FB would have to be very, very green to cause your contract price to rise.
I highly doubt it. Dow futures are up 230 points right now, pointing to a Green Day tomorrow. In addition, AMD is up to 55.15 after hours, so if it were to drop to 51-52, AMD would have to drop 6-10%.
I’m not sure if you are into option trading. However, if you are, how would you recommend countering losses in options on a day in which the overall market is plummeting?
If the market is dropping and you believe that it will continue to drop that day, then you could buy puts.
If you lost money on a red day, and believe that the market will go down for days in the future, you could also buy puts for a further out strike date.
If you aren’t very sure where the market will go, but you are more bearish than bullish, you could hedge. Buy 70% calls and buy 30% puts.
If you are trying to counter losses, I would definitely recommend the hedging strategy, that is what a lot of traders do and what most Wall Street traders do to regain their losses and “protect” their investments.
Ya that’s a good idea. It takes a while to really learn options well, and it is very difficult to trade options right now given the current market conditions.
thank you both for you insight. I am new as well. I wk in airlines &the break is what got me started. Our industry is unpredictable now and dropped a lot of the course of the past couple of months.
Hello, first off I believe your correct on APPL. I posted this few hours ago. I own NVAX, SRPT. AIM, SESN, and SRPT. In Bios right now as I feel it’s best play. My question is two fold, I own a lot of SESN. What are your thoughts on the stock if you know it? Second, cab you name one underpriced stock ready for a breakout you would buy?
For SESN, I just looked it up, and I haven’t heard of it, so I can’t give you much info for that. Just a side note, I usually don’t trade penny stocks or illiquid stocks, because it didn’t prove to be profitable for me. If it works for you though, go for it.
As far as an underpriced stock ready for breakout, I would say Exxon Mobile (XOM) and CVS Pharmacy (CVS). I wouldn’t necessarily say that these two are going to breakout and go crazy, but I do believe that these are undervalued.
For XOM, it’s high was 71, and it now sits at 50. If we have more red days in the market, it will continue to drop and pose an even better buying opportunity. This is because, oil is still low compared to what it was at, and what I believe it will be. The economy both globally and domestic is just starting to “go back to normal”. Therefore, with more tracks and activity, the demand for oil will go up, increasing its price, so XOM should increase as well.
For CVS, it’s high was 76, and it is now at 67. Again, I wouldn’t necessarily call this a breakout, and I know that there is only 9$ from where it’s at now to it’s high, but if you are familiar with options, buying a call would magnify the returns greatly. In addition, if the market continues to fall like it did yesterday and today (also futures are red for tomorrow), CVS will be at an even better price to buy. Also, CVS has a solid uptrending support line that starting in late March that has been “verified” roughly 9 times. If it bounces (breaks out), there is potential to make some money.
Would you buy calls for 06/19 at $53 or would you buy puts at 47.50? I placed order for calls as oil is up and I think XOM will be as we but times aggressive.
Personally, I am bullish. If it were me making the trade, I would do calls for a later out day, like for sometime in July or August. Ultimately though, it’s up to you
Personally, I think that they will split. Apple is at a high price per share, so I think they will split to make it easier for people to pick up more shares at a lower price. In addition, Apple has split 4 times since its IPO. The first was in 1987, the second in 2000, the third in 2005, and the fourth in 2014. The average between each split is 9 years, so if it follows this, there should be a split in 2023. Regardless of this average though, I do believe that Apple will split, along with Tesla, and amazon.
My answer would be yes and no, but I’m leaning more on the no side. No because when a stock splits whether it’s a regular split or a reverse split, all of the options (calls and puts) are adjusted accordingly so there is no positive or negative change to the option price.
Yes because the price is going higher. When a stock splits, the whole point is to make it easier for people to buy shares, because each share costs less. Thus, many times this increases buying pressure. Therefore, when there is a reverse split it makes each share more unappealing to buyers, decreasing buying pressure. Although, I don’t think that this happens often or enough to really change the price of the stock.
Ya that would be awesome. If you have any social media or anything you can just copy the link to this page and send it out there, or share my posts directly (there is a button at the bottom of my Optimistic Markets article), and just tell your friends and stuff.
Thanks. I really appreciate it, and I’m glad I could help you out with your questions. If there is anything else that you are curious about, just give me a shout.
First off, the tech sector was up very slightly towards the end of last week, while sandp 500 and Dow were up a lot. This is a pretty bullish (green) signal considering the current market. Considering that Microsoft is a large part of the tech sector, it has the potential to increase its gains. I believe that it is a good stock for the long term, because most companies are not being able to conduct business due to Covid-19, but Microsoft is offers many online services, and most of their employees now work from home, giving them the upper hand when compared to most other stocks/companies. Other than that, market trends show that Microsoft should continue to rise. Furthermore, if you are familiar with technical analysis, Microsoft has a solid bullish trend channel, and only recently crossed the 200 day simple moving average (SMA), another bullish signal.
If anybody has any questions about what time decay or implied volatility is, or anything else, feel free to let me know and I can explain.
Thought on $RVP ? Should buy more or take my profits n move on
It has a nice rising support line on the 6th month graph which seems to be pretty promising. My answer depends on what your profit is (in percentage) and what your position is (bought calls, sold puts, shares). Other than that, I don’t know too much about this stock, so I would just hold what you have right now.
I own ten shares of Boeing that I bought for $200. On Friday (past) I sold covered calls for Jun 26 to try and minimize my loss if the shares were to tank over the weekend. Today the market opened negative and rallied but kept hitting a resistance all the way till close causing me to think it would tank again. So trying to further protect my downside I sold calls for 220 strike price for Jun 26, with the intent of closing them in the morning should the market trend sideways. It has gone up $5 after hours and looks like it might gap up in the morning. ANy ideas or suggestions on how you would approach this to minimize losses? Thank you so much for your help!
Ok so for your covered calls. At this point, I don’t think there is much you can do to minimize losses, other than cut the position and take the losses to stop from further downside. Although, I do feel that this market is still risky, and in my opinion, it would not be a bad idea to hold onto a few of those covered calls as a hedge. The Boeing shares will be at only a slight loss come morning, if the market opens the way it is now. Hold the shares (bullish) keep the small hedge in case of another red day.
Or buy back the calls for a loss and keep the shares.
You could also buy a call for a different strike price (bullish) although this is risky, and if you are familiar with implied volatility, it may not be the best idea, but it is a possible move to make if you feel up to it.
That’s all that I can really think of at the moment.
Do you think $FB will reach $240 by tomorrow 6/16
FB is currently at 234.5 after hours. Therefore, if futures stay where they are, FB would have to move up at least 5.5$ to hit 240, a roughly 4-4.5% change from today’s close. If the market rises more before open or even after, I think it is possible, but at this point, I wouldn’t count on it. The market could make a huge move like it did today, but that does not happen all too often. Although, due to recent volatility, I would be more confident, but once again, I wouldn’t count on it.
Thanks Josh, greatly appreciated! I have a few contracts 240 call expiring 6/19. Just wanted check if I need to wait for a day or two. OR should I sell it tomorrow. Avg price was 1.75. The current price is 1.14.
Ok. If you are in the profit come market open, I would suggest selling maybe 25-50% of your position in calls. Honestly, it’s up to you and your risk tolerance.
Just be mindful that investors are on the edge after what happened last week and on Monday. This is one approach.
The other, and my more recommended would be to sell the whole position or most of it at open if you are in profit or only a slight loss. If you are familiar with time decay, it will destroy your contracts, and even if FB is green, your contracts have a good possibility of being red on the day. Also with implied volatility, FB would have to be very, very green to cause your contract price to rise.
Will AMD go down to $51-$52 tmrw?
I highly doubt it. Dow futures are up 230 points right now, pointing to a Green Day tomorrow. In addition, AMD is up to 55.15 after hours, so if it were to drop to 51-52, AMD would have to drop 6-10%.
I’m not sure if you are into option trading. However, if you are, how would you recommend countering losses in options on a day in which the overall market is plummeting?
If the market is dropping and you believe that it will continue to drop that day, then you could buy puts.
If you lost money on a red day, and believe that the market will go down for days in the future, you could also buy puts for a further out strike date.
If you aren’t very sure where the market will go, but you are more bearish than bullish, you could hedge. Buy 70% calls and buy 30% puts.
If you are trying to counter losses, I would definitely recommend the hedging strategy, that is what a lot of traders do and what most Wall Street traders do to regain their losses and “protect” their investments.
Makes sense, thank you very much
Your welcome
Thank you. As I’m new to options I placed a limit order on XOM to just buy and hold. Thank you again.
Your welcome!
Ya that’s a good idea. It takes a while to really learn options well, and it is very difficult to trade options right now given the current market conditions.
thank you both for you insight. I am new as well. I wk in airlines &the break is what got me started. Our industry is unpredictable now and dropped a lot of the course of the past couple of months.
Hello, first off I believe your correct on APPL. I posted this few hours ago. I own NVAX, SRPT. AIM, SESN, and SRPT. In Bios right now as I feel it’s best play. My question is two fold, I own a lot of SESN. What are your thoughts on the stock if you know it? Second, cab you name one underpriced stock ready for a breakout you would buy?
For SESN, I just looked it up, and I haven’t heard of it, so I can’t give you much info for that. Just a side note, I usually don’t trade penny stocks or illiquid stocks, because it didn’t prove to be profitable for me. If it works for you though, go for it.
As far as an underpriced stock ready for breakout, I would say Exxon Mobile (XOM) and CVS Pharmacy (CVS). I wouldn’t necessarily say that these two are going to breakout and go crazy, but I do believe that these are undervalued.
For XOM, it’s high was 71, and it now sits at 50. If we have more red days in the market, it will continue to drop and pose an even better buying opportunity. This is because, oil is still low compared to what it was at, and what I believe it will be. The economy both globally and domestic is just starting to “go back to normal”. Therefore, with more tracks and activity, the demand for oil will go up, increasing its price, so XOM should increase as well.
For CVS, it’s high was 76, and it is now at 67. Again, I wouldn’t necessarily call this a breakout, and I know that there is only 9$ from where it’s at now to it’s high, but if you are familiar with options, buying a call would magnify the returns greatly. In addition, if the market continues to fall like it did yesterday and today (also futures are red for tomorrow), CVS will be at an even better price to buy. Also, CVS has a solid uptrending support line that starting in late March that has been “verified” roughly 9 times. If it bounces (breaks out), there is potential to make some money.
Would you buy calls for 06/19 at $53 or would you buy puts at 47.50? I placed order for calls as oil is up and I think XOM will be as we but times aggressive.
Personally, I am bullish. If it were me making the trade, I would do calls for a later out day, like for sometime in July or August. Ultimately though, it’s up to you
Will Apple ever split?
Personally, I think that they will split. Apple is at a high price per share, so I think they will split to make it easier for people to pick up more shares at a lower price. In addition, Apple has split 4 times since its IPO. The first was in 1987, the second in 2000, the third in 2005, and the fourth in 2014. The average between each split is 9 years, so if it follows this, there should be a split in 2023. Regardless of this average though, I do believe that Apple will split, along with Tesla, and amazon.
Would it make sense to buy a PUT in XSPA as it is about to undergo a reverse split
My answer would be yes and no, but I’m leaning more on the no side. No because when a stock splits whether it’s a regular split or a reverse split, all of the options (calls and puts) are adjusted accordingly so there is no positive or negative change to the option price.
Yes because the price is going higher. When a stock splits, the whole point is to make it easier for people to buy shares, because each share costs less. Thus, many times this increases buying pressure. Therefore, when there is a reverse split it makes each share more unappealing to buyers, decreasing buying pressure. Although, I don’t think that this happens often or enough to really change the price of the stock.
So my final answer would be no.
Thank you for your answer! Also is there anyway I can better promote this thread and help you out
Ya that would be awesome. If you have any social media or anything you can just copy the link to this page and send it out there, or share my posts directly (there is a button at the bottom of my Optimistic Markets article), and just tell your friends and stuff.
Thanks. I really appreciate it, and I’m glad I could help you out with your questions. If there is anything else that you are curious about, just give me a shout.
Thoughts on Microsoft this week?
On top of Josh’s comments, my two cents... it should cross $197.5 before 6/19. $200 a bit stretch but not impossible.
First off, the tech sector was up very slightly towards the end of last week, while sandp 500 and Dow were up a lot. This is a pretty bullish (green) signal considering the current market. Considering that Microsoft is a large part of the tech sector, it has the potential to increase its gains. I believe that it is a good stock for the long term, because most companies are not being able to conduct business due to Covid-19, but Microsoft is offers many online services, and most of their employees now work from home, giving them the upper hand when compared to most other stocks/companies. Other than that, market trends show that Microsoft should continue to rise. Furthermore, if you are familiar with technical analysis, Microsoft has a solid bullish trend channel, and only recently crossed the 200 day simple moving average (SMA), another bullish signal.