Notices

Side Hustle

Old 01-22-2021, 02:27 PM
  #651  
Gets Weekends Off
 
Gunfighter's Avatar
 
Joined APC: Apr 2007
Posts: 4,449
Default

Originally Posted by Trip7 View Post
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.
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?
Gunfighter is offline  
Old 01-22-2021, 02:44 PM
  #652  
Gets Weekends Off
 
Big E 757's Avatar
 
Joined APC: Nov 2013
Position: A320 Left seat
Posts: 2,570
Default

Originally Posted by Gunfighter View Post
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 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.
Big E 757 is offline  
Old 01-22-2021, 03:57 PM
  #653  
Gets Weekends Off
 
notEnuf's Avatar
 
Joined APC: Mar 2015
Position: stake holder ir.delta.com
Posts: 9,989
Default

Originally Posted by Trip7 View Post
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
Then there's TSLA. If you bought the March low and held you would be up 10X. Even DAL would have returned 2X off the March and May low. Value buying is my bread and butter. Over reaction is always in the market but the down side is much easier to identify because they are almost immediate and dramatic. Tops are much harder to spot. I wish I would have know what FVRR was in March. FSLR is 3X but I don't see it going higher than the market return now.

Last edited by notEnuf; 01-22-2021 at 04:23 PM.
notEnuf is offline  
Old 01-25-2021, 09:53 AM
  #654  
Gets Weekends Off
 
Gunfighter's Avatar
 
Joined APC: Apr 2007
Posts: 4,449
Default

Originally Posted by Big E 757 View Post
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.
My Tradestation account is finally open. I'll look around the platform for a few days while I'm waiting on the ACH funds to clear for trading. That will give me a few days to learn the platform in a paper account. Ultimately it will be an active trading account for discretionary funds.

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...
Gunfighter is offline  
Old 01-26-2021, 08:33 PM
  #655  
Gets Weekends Off
 
Joined APC: Feb 2007
Position: Big ones
Posts: 696
Default

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?
tripled is offline  
Old 01-26-2021, 08:48 PM
  #656  
Banned
 
Joined APC: Jan 2021
Posts: 1,121
Default

Originally Posted by tripled View Post
Anyone else riding gme up? Is occupy wall street striking back?
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

Last edited by LAXtoDEN; 01-26-2021 at 09:17 PM.
LAXtoDEN is offline  
Old 01-26-2021, 09:41 PM
  #657  
Banned
 
Joined APC: Jan 2021
Posts: 1,121
Default

“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.”
LAXtoDEN is offline  
Old 01-27-2021, 03:44 AM
  #658  
Gets Weekends Off
 
Trip7's Avatar
 
Joined APC: Dec 2007
Posts: 5,392
Default

Originally Posted by LAXtoDEN View Post
“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.”
Excellent summation. The market can stay irrational longer than you can remain solvent. That's why I don't mess with shorting. It can go horrifically wrong. What's going on with GME will be etched in history

Sent from my SM-N986U using Tapatalk
Trip7 is offline  
Old 01-27-2021, 05:41 AM
  #659  
Banned
 
Joined APC: Jan 2021
Posts: 1,121
Default

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
LAXtoDEN is offline  
Old 01-27-2021, 09:30 AM
  #660  
Gets Weekends Off
 
Gunfighter's Avatar
 
Joined APC: Apr 2007
Posts: 4,449
Default

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.
Gunfighter is offline  
Related Topics
Thread
Thread Starter
Forum
Replies
Last Post
Datsun
ExpressJet
1312
03-08-2018 09:04 AM
Bruno82
Hangar Talk
4
01-11-2018 05:53 PM
just wondering
Hangar Talk
21
11-16-2010 08:53 PM
PearlPilot
Flight Schools and Training
47
04-15-2009 04:44 AM
Noonan
Fractional
2
03-02-2006 08:58 AM

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Thread Tools
Search this Thread
Your Privacy Choices