Hi Daniel!
SIRIUS XM SATELLITE RADIO FORUM
You can make more money trading options than trading penny stocks and with less risk.
BTW, if y'all treat me well, I will show you how to bulletproof your investments with options with less risk than trading SIRI (not SIRI though... SIRI is a lost cause for a while).
Let me give you an example:
Say you have $5,000.00. You can buy 15,100 shares of SIRI @ .33 and wait for it to go to .39 in the next week or 2 weeks ? right ? that is $900 in profit. Can you do that consistently ? buy at the low, sell at the high ? If you can, you have to to show us how you do it !!! Still, $1800 in a month risking $5,000.00... Let say the stock tanks and it goes to .27... Now you lose $900, right ? And then what, wait until it comes back up to break even ? Like y'all been waiting for months ? What if it continues tanking ?... Anyway...
What if instead of doing that you did the following:
Sell the May 2009 $5.00 DNDN option put for $2.25. You sell 10 contracts:
10 x 100 x 2.25 = $2,250.00 credited immediately to your account (more than the $1800 you made with SIRI). And this is what is called a covered put write because you have $5,000.00 in your account
DNDN is trading for about $6.30. To get assigned, DNDN has to go down to or below $5.00 by the 3rd Friday in May. You will then be put 1000 shares so your total out of pocket will be $5,000.00.
Do y'all know what your per share cost is ? Is NOT $5.00... It is $5.00 -$2.25 = $2.75. This means that EVEN if the pps is $3.00 (which I doubt) you will be ahead.
Anyway, that is one way of making $$$ with options but once you are the owner you do not have to sell the shares. You can generate income by selling the $5.00 or the $7.50 calls. Even better, you can bulletproof your shares...I can show you all how...
See ? We are not evil, we just like to make money in a less risky way...An yes we sometimes manipulate stuff, to get what we want...
Options are wasting assets, be careful how you trade them...
Apr 08, 2009 (M2 PRESSWIRE via COMTEX) -- VTR | Quote | Chart | News | PowerRating -- BUYINS.NET, www.buyins.net, announced today its proprietary Market Maker Friction Factor Report for April 7, 2009.
Since late October market makers are now required to be on the bid as much as they are on the offer and for like amounts of stock. This "fair market making" requirement is designed to prevent market makers from manipulating stock prices.
On Tuesday there were 3,034 companies with "abnormal" market making 1,715 companies with positive Friction Factors and 4,390 companies with negative Friction Factors.
Here is a list of the top 6 companies with the highest net sell volume on Tuesday and lowest negative price Friction (bearish). This means that there was more selling than buying in the stocks and their stock prices dropped faster with less Friction.
Las Vegas Sands (NYSE: LVS),
SIRIUS XM Radio (NASDAQ: SIRI),
Oracle (NASDAQ: ORCL),
Cell Therapuetics (NASDAQ: CTIC),
Ventas (NYSE: VTR | Quote | Chart | News | PowerRating) and
MGM Mirage (NYSE: MGM).
To access Friction Factor, Naked Short Data and SqueezeTrigger Prices on all stocks please visit http://www.buyins.net.
Analysis of the Friction Factor chart above shows that each of the six stocks mentioned above have low price friction combined with more selling than buying (negative Net Volume) in their stocks. The Friction Factor displays how many more shares of buying than selling are required to move a stock higher by one cent or how many more shares of selling than buying moves a stock lower by 1 cent.
For example, the chart above shows SIRI down -$0.02 with a Friction Factor of -2,918,578 and a Net Volume of -4,669,725. That means that it takes 2,918,578 more shares of selling than buying to drop SIRI by one penny. On Tuesday the Market Makers allowed the stock to move down on heavier selling than buying (low negative friction).
http://www.buyins.com/ff/ffnvdn4-7-09.jp...
Siriusowner, I don't really trade penny stocks. I've owned sirius since 2004, don't trade it, just buy it! ;-) and I'm just recouping my losses.
There is a guy that comes into my coffee house that has written an options trading book for dummies. He tells me the same thing as you just did. I've sat down with him a few times for some lessonsbut never really made any moves. If anything I know the way I trade I should learn to use options at least for protection. Maybe someday when I have more time and my mind is free of all this coffee house business I can take the time to really learn.
Let me ask you something, are all your stock investments like SIRI ? What I am trying to ask is, are they all in the RED by more than 50% ? If so, you should learn about options... otherwise you will be working the rest of your life at that coffee house business.
PS: Buy and hold is not longer the name of the game as an investor... You have to actively manage your investments... And I am talking the investments outside and inside your IRA and/or 401K (I am not sure a 401K plan is a good choice or not anymore)...
Last edited by Siriusowner; 04-08-2009 at 07:42 PM.
Fool articles are just there to get people to sign up not to make sense
I actually began writing a book several years ago. Chapter 3 is titled: Don't get sold on "buy and hold."Originally Posted by Siriusowner
Guess I should have finished it back then.
Well heck no, none of my other stocks are like sirius. What else is like sirius? But I have owned stock in companies that went bankrupt. I've made a good living in the market for a pretty long time now. I've made my best money buying in lower after a stock of mine has dropped dramatically. As for the ones that have gone under, new century, tso (although I did play with that as a penny stock) and gtop, I took the losses against my gains.
In anycase, I'm not an investor, I'm a trader, though I sometimes let a trade turn into an investment. I also tend to fall in love with a couple of stocks, Both Bad trading traits, I know, but a weakness I have. Sirius is both of those for me.
I do think it's important to recognize that you do not need to trade options, short stocks, or buy on margin to be a successful trader. It really isn't rocket science.
As a side note, I wouldn't begin to compare buying shares in dndn with buying shares of sirius. Not as a trader even. I actually believe in sirius as a business. I'm not looking to get out of it at these price levels.
It's doubtful, that there are many people more actively managing there account than I. I do this all day. When I'm at the coffee house, I keep my trading program open. Mind you, I didn't open the coffee house until Dec. 2007 and I will be the first to admit it took some of my focus during a pretty drastic time market wise. All is well though. and I haven't worked other then raising kids since I was in my early twenty's. Doubtful that I will be working at the coffee house that I own for the rest of my life.
btw...I do agree with you that it would be beneficial for me to use options. I'm just the kind of person that has to know what I'm doing before I do something. And I just haven't totally taken it all in yet. But thank you for the tips, I do appreciate the effort.
Last edited by Sheree; 04-08-2009 at 08:11 PM. Reason: to clarifie
Agreed but Fool articles have been almost completely negative on SIRI for quite a while. That is changing. We need more positive SIRI articles from more than just Brandon, Tyler and Satwaves.
