Comments for Singapore Trading Blog

Comment on Buy or Sell During Option Expiration? by Michael

Michael — Tue, 01 Jun 2010 14:34:25 +0000

Here’s a different approach. Try selling out-of-the-money options just before expiration to gain incremental income. You’ll recall the beauty of options decay: at the very end of their life, options waste away the fastest. By selling out-of-the-money options a few days ahead of expiration you can maximize this decay effect to your advantage. You won’t make a killing, but you can construct some high win percentages on a monthly basis.

Comment on Buy or Sell During Option Expiration? by John S

John S — Tue, 01 Jun 2010 13:58:56 +0000

Generally, options theta starts rising very fast when there’s about 30 days left until expiration. So most options traders generally avoid taking long positions of front month options as they quickly lose their time value.

Also, there’s no such pattern that stocks do well on option expiration days.

Comment on Buy or Sell During Option Expiration? by Kip

Kip — Tue, 01 Jun 2010 13:45:02 +0000

Stocks don’t necessarily follow a specific pattern if other more powerful market forces are in play, otherwise I would tend to think that prices generally tend to migrate slightly to the price point that results in the maximum net losses for all open contract holders. However with that said, it is difficult to answer your question because you did not indicate in your question if you are considering purchasing high delta in the money options or low delta out of the money options. The short term movement should be magnified with high delta contracts (approaching delta 1.00) and not much of consideration with lower delta contracts. I’d think you would be better off to pick an entry point based on something other than a specific date personally, like a technical entry point – but the advice is worth what you paid for it. Much more difficult to successfully trade options with short expiration particularly with out of the money options, be careful and make sure you really want to be a buyer instead of a writer.

Comment on Buy or Sell During Option Expiration? by Uncle D

Uncle D — Tue, 01 Jun 2010 13:36:19 +0000

I find options lose a little more value the first day that they are next in line to expire. I wait until Monday after expiration to buy. I like to sell calls before expiration.

Comment on Can someone help me with Stock Trading Terms? by Common Sense

Common Sense — Thu, 06 May 2010 07:25:49 +0000

The answers you’ve received are very good. I’d like to stress one more thing.

Don’t put a penny into the market until you’ve read 2-3 books on investing. It will save you thousands in losses and $10,000’s in fees.

Do the right thing for yourself. Invest. Don’t gamble.(”giving it a try” before learning… is gambling).

Comment on Can someone help me with Stock Trading Terms? by Chuck P

Chuck P — Thu, 06 May 2010 07:02:16 +0000

Market, is the going rate, you never buy at market, you sell a losing position at market.
Limit, you specify the price you are willing to buy or sell.
Stop limit, or stop loss, is a price you want to trigger if the price goes the wrong direction.
Trailing stop, you set a dollar amount or a percentage the stock must fall before it sells, that way you can still let the stock rise in value.
SHORT, you sell stocks you don’t own hoping the stock will go down allowing you to buy at a cheaper price to COVER the short.
You buy to open and sell to close, or vise versa on short positions.
Day order, is only good until the end of the trading day.
GTC, good til canceled, the order stays open until you cancel it or 60-90 days.

Comment on Can someone help me with Stock Trading Terms? by Toni

Toni — Thu, 06 May 2010 06:20:44 +0000

here’s the best to my knowledge, though I strongly recommend doing a lot more research, reading and getting sound advice from seasoned investors…

limit = a parameter (e.g., price, length of time before it can be cancelled) that you place on the shares that you intend to buy/sell

stop limit = when the stock reaches your limit price, the order that you give (buy or sell) is executed

stop = when the stock price goes beyond a particular point, this order becomes a market order

trailing stop = similar to a stop order, but has a set percentage, instead of a particular point (and will therefore move with the market price)

short (selling) = selling stocks that you do not own (with borrowed money from the broker), but assuming that you’ll be able buy these shares at a lower price

cover = completing the transaction (e.g., buying the stocks from the short sales)

GTC = “good ’til canceled”; your order to buy/sell at a particular price will expire at the end of the trading day if you do not provide this instruction

…happy trading!

Comment on Can someone help me with Stock Trading Terms? by AntDU

AntDU — Thu, 06 May 2010 05:44:54 +0000

Hey. Just go to http://www.investopedia.com and bookmark it. It will answer all these questions and more that you will have in the future.

Limit: How much you are willing to pay. if it does not hit this price, you do not buy it.

Stop Limit: How much you are willing to lose

Short = You believe the stock is over priced and sell it at a higher price and will buy it at a lower to replace the shares you sell.

Cover: Buy the shares you shorted

Day = Good until close of business

GTC – Good until you cancel it.

Comment on Online trading, stocks and mutual funds? by tradinginsider

tradinginsider — Tue, 04 May 2010 18:02:30 +0000

can give you information that will help you skip over the 12 years learning curve where you would be losing your money over and over again. The stock market is set up on a 90/10 scale. 10% of the people out there make the money and everyone else (90%) donates to them so they can build their houses and buy their cars and property.
I started out in the stock market in the mid 90s and made a lot of mistakes and then I suddenly found out what works and what doesn’t. I have learned how to make money in the stock market. He res a synopsis of what doesn’t work:
1. Dint try to play the news. The pros on the floor get the news before you do at your laptop online. They have services such as First Call, and other immediate news services. Also the guys on the floor hear the rumors before you do. Basically what this does is the stock already moved before you even got the news, too late.
2. Penny Stocks. You might have heard about someone who made a mint in penny stocks. He bought 10,000 shares at .03 apiece and suddenly the stock jumped to 3 dollars a share and he bought a new car or a house. This is ultra rare. Usually you will buy a penny stock for .07 a share and then it will go down to .03 a share and stay there for a year.
3. You try to do momentum plays. If the stock suddenly shows up on the ‘most up’ lists for the day you think that you can join up with the momentum and make money too. But by the point YOU see it on the lists, the pros are already starting to sell it. You buy it and the stock starts to drop.
4. Rolling penny stocks? No. Everybody wants to buy at the bottom of the roll, no body wants to sell at the top of the roll.
5. You try to daytrade, fighting the market makers and screw them out of thier bid and ask spread. Not going to happen. You are up against a professional who makes his living doing this.
6. You learn technical analysis. But this takes about 6 years to master.
7.You try giving your money to a pro…most money managers dont make money during down years. As a matter of fact they can lose quite easily.
8. You can follow stock pics from the Wall Street Journal or IBD but then everyone sees those pics. You would be one of the 90%. Those pics, unless they are forcasts, show stocks that are currently hot. As you see them pros are dumping them.
9. You try to catch a ‘falling knife’. A stock drops big because of news so you buy it because you think its cheap. Yeah but there was a reason the stock went down, a fault in the stock itself. So it keeps bleeding after you buy it and then it keeps dropping. Then it gets downgraded and drops more.
10. You tried options. Most people dont know how to do them right and most people lose at options. Heres why. a) you buy an option that expires at a certain time (they all do) and the stock goes down, your option goes down. b) you buy an option and the stock remains at the same price and is flat. The option time erodes and you are left with nothing. c) You buy the option and the stock price soars. You are estatic because the stock price made your option triple. Sell the option? Hell no, it could go up more! So you hold it. The problem with that is they all expire worthless if given enough time. So you hold hoping for even more money then the price goes down. You lose.
12) You move your money around in one big pile. Investing 100% of your money all at one time is a big mistake because that one time when you have a catasrophic loss from one trading mistake is the time you are done. Always have different piles for trading down or up.

Well that is my two bits and I suggest that you follow this if you want to learn and make money. Site I have this from is below.

Comment on Online trading, stocks and mutual funds? by ninja_archer7272

ninja_archer7272 — Tue, 04 May 2010 17:58:41 +0000

I’ll try to answer these question systematically.

Question 1: Yes you need to start with money, at least 3 grand or more to make a difference. However! there is a warning, YOU HAVE TO KNOW WHAT YOU’RE DOING. You dont have any experience; you’re going to lose all the money you have. Which means, you’re going to have to get a stock broker. Also, i wouldnt recommend it for your age, save up money and learn more, then use that money for stocks.

Question 2: Many families are struggling at the moment. If you’re 18 or older, etrade or ameritrade would work, but like i said, you NEED experience. The stock market is all about luck.

My suggestion is, if you’re in school, work hard and help your parents when you get a job. If you’re in you’re twenties, military may be good since you do get paid, but not alot. If you’re done with school but you’re not getting paid enough to help your parents, go back to school and get a better degree. It’s hard, but hang in there.