Side Hustle
#651
FYI, for those that are dabbling in growth stocks at eye watering valuations, hope you have a strong stomach and very long time horizon
$QCOM fell 58% - 21 years to get back to break even.
$MSFT fell 65% - 17 years to get even.
$AMZN fell 95% - 10 years to even.
$INTC fell 82% - still isn’t even.
$CSCO fell 89% - isn’t even close to back to even.
$QCOM fell 58% - 21 years to get back to break even.
$MSFT fell 65% - 17 years to get even.
$AMZN fell 95% - 10 years to even.
$INTC fell 82% - still isn’t even.
$CSCO fell 89% - isn’t even close to back to even.
I was looking at a leveraged portfolio of dividend stocks while taking advantage of the low margin rates at Interactive Brokers. CSCO popped up as a dividend stock worth considering. I'm not willing to gamble on growth stocks, but a good dividend yield covers the margin interest with a nice profit. Has anybody used IBKR Pro?
#652
The tech bubble was a wild ride. I was flying a desk for a computer manufacturer back then. The move over to aviation provided more stability.
I was looking at a leveraged portfolio of dividend stocks while taking advantage of the low margin rates at Interactive Brokers. CSCO popped up as a dividend stock worth considering. I'm not willing to gamble on growth stocks, but a good dividend yield covers the margin interest with a nice profit. Has anybody used IBKR Pro?
I was looking at a leveraged portfolio of dividend stocks while taking advantage of the low margin rates at Interactive Brokers. CSCO popped up as a dividend stock worth considering. I'm not willing to gamble on growth stocks, but a good dividend yield covers the margin interest with a nice profit. Has anybody used IBKR Pro?
I never used IBKR Pro, but I did use IB for trading years ago. I didn’t like the platform. I’m much happier at Tradestation.
#653
FYI, for those that are dabbling in growth stocks at eye watering valuations, hope you have a strong stomach and very long time horizon
$QCOM fell 58% - 21 years to get back to break even.
$MSFT fell 65% - 17 years to get even.
$AMZN fell 95% - 10 years to even.
$INTC fell 82% - still isn’t even.
$CSCO fell 89% - isn’t even close to back to even.
Sent from my SM-N986U using Tapatalk
$QCOM fell 58% - 21 years to get back to break even.
$MSFT fell 65% - 17 years to get even.
$AMZN fell 95% - 10 years to even.
$INTC fell 82% - still isn’t even.
$CSCO fell 89% - isn’t even close to back to even.
Sent from my SM-N986U using Tapatalk
Last edited by notEnuf; 01-22-2021 at 04:23 PM.
#654
IBKR Pro is still appealing for a longer term margin account that holds dividend stocks. In theory the dividends pay a nice return above the margin interest. An initial margin of 1.75 : 1 gives enough cushion for a 35% drop before hitting the maintenance limit. Over time, the dividend payout will reduce the margin balance providing even more cushion. This would juice the returns without making a long term capital commitment in real estate.
Traders and Side Hustlers, please fire away with torpedoes from either opinion or experience...
#655
Gets Weekends Off
Joined APC: Feb 2007
Position: Big ones
Posts: 696
Anyone else riding gme up? Is occupy wall street striking back?
or perhaps more directly, are
there any short (cheap) stocks that the Reddit Wall Street mob might seek out to pump up to stick it to the Big Boys?
or perhaps more directly, are
there any short (cheap) stocks that the Reddit Wall Street mob might seek out to pump up to stick it to the Big Boys?
#656
Banned
Joined APC: Jan 2021
Posts: 1,121
Buying highly shorted stocks is becoming a strategy, until the SEC gets involved. Thank Reddit users, any stock with a huge amount of short interest is being short squeezed ($GME, $AMC, $BBBY) I bought AMC yesterday and I’m up 80% (up 60% after hours), now it was only 500 shares, (treated like a vegas bet) but I made $1,600 in less than 24 hours. I wouldn’t be too aggressive, just throw a couple of thousand and see what happens. They’ve already attempted to halt trading on $GME multiple times, usually that’s how guys get killed, but it rips once trading is allowed again. The Reddit mob is out to set an example.
https://www.highshortinterest.com/
I’d suggest downloading Reddit and joining r/WallStreetBets, it’s entertaining at least. The $GME massive short squeeze is biblical. We’ll probably never see anything like this again. The shorts deserved this, 130% short volume on $GME is ****ing reckless, the hedge funds got caught in their own game of price manipulation and are being bankrolled.
https://markets.businessinsider.com/news/stocks/gamestop-short-sellers-squeezed-losses-reddit-traders-army-cohen-palihapitiya-2021-1-1030006226
https://www.highshortinterest.com/
I’d suggest downloading Reddit and joining r/WallStreetBets, it’s entertaining at least. The $GME massive short squeeze is biblical. We’ll probably never see anything like this again. The shorts deserved this, 130% short volume on $GME is ****ing reckless, the hedge funds got caught in their own game of price manipulation and are being bankrolled.
https://markets.businessinsider.com/news/stocks/gamestop-short-sellers-squeezed-losses-reddit-traders-army-cohen-palihapitiya-2021-1-1030006226
Last edited by LAXtoDEN; 01-26-2021 at 09:17 PM.
#657
Banned
Joined APC: Jan 2021
Posts: 1,121
“How A Gamma Squeeze Works: The first step in a gamma squeeze is that one large trader or a legion of small retail traders, such as the Reddit WallStreetBets community, buys short-dated call options in a stock such as GameStop. When they buy these call options, the institutional brokers and investment banks that sell them essentially become short the underlying stock. The more call options the traders buy, the more shares of the underlying stock institutional brokers and market makers must buy to offset their short position.
When an appropriate stock is selected and the call buying is done on a large enough scale, a positive feedback loop is created.
“That gamma effect adds buyer after buyer in the stock, with no one able to short the stock because it is hard to borrow,” Lagator said.
The ideal candidate for this type of squeeze is a heavily shorted stock like GameStop. When forced short covering is also added to the mix, the positive feedback loop is fueled further.
How It Ends: This type of gamma squeeze has worked wonders for the stock prices of GameStop and other heavily-shorted stocks in the short term. Traders that got in on the squeeze early have ridden GameStop shares higher by 552% in the past 30 days, and call buyers have likely far exceeded those returns in that stretch.
Without any underlying value creation in GameStop’s struggling video game retail business, however, Lagator said the gamma squeeze eventually comes to an end and it could get ugly for traders still long at that point.
“Eventually, the short squeeze in the equity itself ends, and maybe that just means the stock goes sideways a bit. What then happens in the options is the opposite effect where all those pumped upside calls that have been hedged...start to decay to zero, meaning the market makers now have stock to sell because they have over-hedged,” Lagator told Benzinga.
Benzinga’s Take: The leaders within the Reddit trading community and other online groups have put a new spin on the pump-and-dump trading strategy by taking advantage of the leverage of the option market. They select short squeeze targets by identifying stocks that are heavily shorted by hedge funds. Then they take advantage of market maker hedging by focusing on the option market rather than buying the stock itself, intentionally triggering a gamma squeeze.
It’s a brilliant strategy, and the traders that get in early enough in the process have likely already made a killing. However, it’s extremely difficult to time entry and exit points of a short squeeze once it has begun, so anyone trading GameStop stock at this point is playing with fire.”
When an appropriate stock is selected and the call buying is done on a large enough scale, a positive feedback loop is created.
“That gamma effect adds buyer after buyer in the stock, with no one able to short the stock because it is hard to borrow,” Lagator said.
The ideal candidate for this type of squeeze is a heavily shorted stock like GameStop. When forced short covering is also added to the mix, the positive feedback loop is fueled further.
How It Ends: This type of gamma squeeze has worked wonders for the stock prices of GameStop and other heavily-shorted stocks in the short term. Traders that got in on the squeeze early have ridden GameStop shares higher by 552% in the past 30 days, and call buyers have likely far exceeded those returns in that stretch.
Without any underlying value creation in GameStop’s struggling video game retail business, however, Lagator said the gamma squeeze eventually comes to an end and it could get ugly for traders still long at that point.
“Eventually, the short squeeze in the equity itself ends, and maybe that just means the stock goes sideways a bit. What then happens in the options is the opposite effect where all those pumped upside calls that have been hedged...start to decay to zero, meaning the market makers now have stock to sell because they have over-hedged,” Lagator told Benzinga.
Benzinga’s Take: The leaders within the Reddit trading community and other online groups have put a new spin on the pump-and-dump trading strategy by taking advantage of the leverage of the option market. They select short squeeze targets by identifying stocks that are heavily shorted by hedge funds. Then they take advantage of market maker hedging by focusing on the option market rather than buying the stock itself, intentionally triggering a gamma squeeze.
It’s a brilliant strategy, and the traders that get in early enough in the process have likely already made a killing. However, it’s extremely difficult to time entry and exit points of a short squeeze once it has begun, so anyone trading GameStop stock at this point is playing with fire.”
#658
“How A Gamma Squeeze Works: The first step in a gamma squeeze is that one large trader or a legion of small retail traders, such as the Reddit WallStreetBets community, buys short-dated call options in a stock such as GameStop. When they buy these call options, the institutional brokers and investment banks that sell them essentially become short the underlying stock. The more call options the traders buy, the more shares of the underlying stock institutional brokers and market makers must buy to offset their short position.
When an appropriate stock is selected and the call buying is done on a large enough scale, a positive feedback loop is created.
“That gamma effect adds buyer after buyer in the stock, with no one able to short the stock because it is hard to borrow,” Lagator said.
The ideal candidate for this type of squeeze is a heavily shorted stock like GameStop. When forced short covering is also added to the mix, the positive feedback loop is fueled further.
How It Ends: This type of gamma squeeze has worked wonders for the stock prices of GameStop and other heavily-shorted stocks in the short term. Traders that got in on the squeeze early have ridden GameStop shares higher by 552% in the past 30 days, and call buyers have likely far exceeded those returns in that stretch.
Without any underlying value creation in GameStop’s struggling video game retail business, however, Lagator said the gamma squeeze eventually comes to an end and it could get ugly for traders still long at that point.
“Eventually, the short squeeze in the equity itself ends, and maybe that just means the stock goes sideways a bit. What then happens in the options is the opposite effect where all those pumped upside calls that have been hedged...start to decay to zero, meaning the market makers now have stock to sell because they have over-hedged,” Lagator told Benzinga.
Benzinga’s Take: The leaders within the Reddit trading community and other online groups have put a new spin on the pump-and-dump trading strategy by taking advantage of the leverage of the option market. They select short squeeze targets by identifying stocks that are heavily shorted by hedge funds. Then they take advantage of market maker hedging by focusing on the option market rather than buying the stock itself, intentionally triggering a gamma squeeze.
It’s a brilliant strategy, and the traders that get in early enough in the process have likely already made a killing. However, it’s extremely difficult to time entry and exit points of a short squeeze once it has begun, so anyone trading GameStop stock at this point is playing with fire.”
When an appropriate stock is selected and the call buying is done on a large enough scale, a positive feedback loop is created.
“That gamma effect adds buyer after buyer in the stock, with no one able to short the stock because it is hard to borrow,” Lagator said.
The ideal candidate for this type of squeeze is a heavily shorted stock like GameStop. When forced short covering is also added to the mix, the positive feedback loop is fueled further.
How It Ends: This type of gamma squeeze has worked wonders for the stock prices of GameStop and other heavily-shorted stocks in the short term. Traders that got in on the squeeze early have ridden GameStop shares higher by 552% in the past 30 days, and call buyers have likely far exceeded those returns in that stretch.
Without any underlying value creation in GameStop’s struggling video game retail business, however, Lagator said the gamma squeeze eventually comes to an end and it could get ugly for traders still long at that point.
“Eventually, the short squeeze in the equity itself ends, and maybe that just means the stock goes sideways a bit. What then happens in the options is the opposite effect where all those pumped upside calls that have been hedged...start to decay to zero, meaning the market makers now have stock to sell because they have over-hedged,” Lagator told Benzinga.
Benzinga’s Take: The leaders within the Reddit trading community and other online groups have put a new spin on the pump-and-dump trading strategy by taking advantage of the leverage of the option market. They select short squeeze targets by identifying stocks that are heavily shorted by hedge funds. Then they take advantage of market maker hedging by focusing on the option market rather than buying the stock itself, intentionally triggering a gamma squeeze.
It’s a brilliant strategy, and the traders that get in early enough in the process have likely already made a killing. However, it’s extremely difficult to time entry and exit points of a short squeeze once it has begun, so anyone trading GameStop stock at this point is playing with fire.”
Sent from my SM-N986U using Tapatalk
#659
Banned
Joined APC: Jan 2021
Posts: 1,121
Update: $GME jumped to $310 a share, shorts finally covered and officially took the L this morning. All I can say is wow.
https://www.cnbc.com/2021/01/27/gamestop-jumps-another-50percent-even-as-hedge-funds-cover-short-bets-scrutiny-of-rally-intensifies.html
https://www.cnbc.com/2021/01/27/gamestop-jumps-another-50percent-even-as-hedge-funds-cover-short-bets-scrutiny-of-rally-intensifies.html
#660
My college age son is active on reddit. I thought he was just comparing gaming strategies. Apparently he's been on r/wallstreetbets. He used his discretionary college funds to open a Robinhood account and joined the crowd in squeezing the GME shorts. The way he explains it, there is a mob mentality of retail traders who want to "stick it to the man". He knows it's a fools errand and closed a portion of his position after a 4x gain. I'm not sure if I should applaud his interest in trading or be worried about a gambling problem. At least he has demonstrated initiative in looking for ways to make a buck.
Thread
Thread Starter
Forum
Replies
Last Post