The Definitive 2020 Guide to Margin Trading for Beginners

Getting profit on falling markets: cryptocurrency margin trading for beginners

Getting profit on falling markets: cryptocurrency margin trading for beginners submitted by PrimeXBT to CryptoCurrencyTrading [link] [comments]

Cryptocurrency Margin Trading for Beginners with Bitcoin and Altcoins

Cryptocurrency Margin Trading for Beginners with Bitcoin and Altcoins submitted by cryptocoinjunky to u/cryptocoinjunky [link] [comments]

What Is Margin Trading? A Complete Guide For Beginners

What Is Margin Trading? A Complete Guide For Beginners submitted by cyger to komodoplatform [link] [comments]

Made an explainer for beginners explaining responsible usage of Margin/Leveraged trading for Bitcoin/crypto (instead of gambling degenerately with 100x leverage)

Here's the video: https://www.youtube.com/watch?v=p3xJOZoXJRk&feature=youtu.be
Basically we think that too many people use margin/leverage trading, like 100x leverage on BitMEX, as a way to gamble instead of using it as a tool in your trading portfolio for sound strategies like risk management.
In this video we share with you the different types of margin trading, how it works (cross vs. isolated, capital, margin, liquidation zone, stop loss, take profit levels, etc.), and also offer a few detailed examples with numbers of how to margin trade Bitcoin safely and responsibly.
Hope this video helps those of you who are curious about this topic but never took the time to look into it or do the proper research yet!
submitted by stellarowl12 to CryptoCurrency [link] [comments]

Margin Trading guide for beginners

Margin Trading guide for beginners submitted by Akenfqs to CryptoCurrencyTrading [link] [comments]

Bitcoin Margin Trading Options for Beginners

Bitcoin Margin Trading Options for Beginners submitted by BTCNews to BTCNews [link] [comments]

Bitcoin Margin Trading Options for Beginners

Bitcoin Margin Trading Options for Beginners submitted by CoinBriefBot to CoinBrief [link] [comments]

[NYTimes] Sources describe horror stories of young and inexperienced investors on Robinhood, many engaging in riskier trades at far higher volumes than at other firms

https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html
Richard Dobatse, a Navy medic in San Diego, dabbled infrequently in stock trading. But his behavior changed in 2017 when he signed up for Robinhood, a trading app that made buying and selling stocks simple and seemingly free.
Mr. Dobatse, now 32, said he had been charmed by Robinhood’s one-click trading, easy access to complex investment products, and features like falling confetti and emoji-filled phone notifications that made it feel like a game. After funding his account with $15,000 in credit card advances, he began spending more time on the app.
As he repeatedly lost money, Mr. Dobatse took out two $30,000 home equity loans so he could buy and sell more speculative stocks and options, hoping to pay off his debts. His account value shot above $1 million this year — but almost all of that recently disappeared. This week, his balance was $6,956.
“When he is doing his trading, he won’t want to eat,” said his wife, Tashika Dobatse, with whom he has three children. “He would have nightmares.”
Millions of young Americans have begun investing in recent years through Robinhood, which was founded in 2013 with a sales pitch of no trading fees or account minimums. The ease of trading has turned it into a cultural phenomenon and a Silicon Valley darling, with the start-up climbing to an $8.3 billion valuation. It has been one of the tech industry’s biggest growth stories in the recent market turmoil.
But at least part of Robinhood’s success appears to have been built on a Silicon Valley playbook of behavioral nudges and push notifications, which has drawn inexperienced investors into the riskiest trading, according to an analysis of industry data and legal filings, as well as interviews with nine current and former Robinhood employees and more than a dozen customers. And the more that customers engaged in such behavior, the better it was for the company, the data shows.
Thanks for reading The Times. Subscribe to The Times More than at any other retail brokerage firm, Robinhood’s users trade the riskiest products and at the fastest pace, according to an analysis of new filings from nine brokerage firms by the research firm Alphacution for The New York Times.
In the first three months of 2020, Robinhood users traded nine times as many shares as E-Trade customers, and 40 times as many shares as Charles Schwab customers, per dollar in the average customer account in the most recent quarter. They also bought and sold 88 times as many risky options contracts as Schwab customers, relative to the average account size, according to the analysis.
The more often small investors trade stocks, the worse their returns are likely to be, studies have shown. The returns are even worse when they get involved with options, research has found.
This kind of trading, where a few minutes can mean the difference between winning and losing, was particularly hazardous on Robinhood because the firm has experienced an unusual number of technology issues, public records show. Some Robinhood employees, who declined to be identified for fear of retaliation, said the company failed to provide adequate guardrails and technology to support its customers.
Those dangers came into focus last month when Alex Kearns, 20, a college student in Nebraska, killed himself after he logged into the app and saw that his balance had dropped to negative $730,000. The figure was high partly because of some incomplete trades.
“There was no intention to be assigned this much and take this much risk,” Mr. Kearns wrote in his suicide note, which a family member posted on Twitter.
Like Mr. Kearns, Robinhood’s average customer is young and lacks investing know-how. The average age is 31, the company said, and half of its customers had never invested before.
Some have visited Robinhood’s headquarters in Menlo Park, Calif., in recent years to confront the staff about their losses, said four employees who witnessed the incidents. This year, they said, the start-up installed bulletproof glass at the front entrance.
“They encourage people to go from training wheels to driving motorcycles,” Scott Smith, who tracks brokerage firms at the financial consulting firm Cerulli, said of Robinhood. “Over the long term, it’s like trying to beat the casino.”
At the core of Robinhood’s business is an incentive to encourage more trading. It does not charge fees for trading, but it is still paid more if its customers trade more.
That’s because it makes money through a complex practice known as “payment for order flow.” Each time a Robinhood customer trades, Wall Street firms actually buy or sell the shares and determine what price the customer gets. These firms pay Robinhood for the right to do this, because they then engage in a form of arbitrage by trying to buy or sell the stock for a profit over what they give the Robinhood customer.
This practice is not new, and retail brokers such as E-Trade and Schwab also do it. But Robinhood makes significantly more than they do for each stock share and options contract sent to the professional trading firms, the filings show.
For each share of stock traded, Robinhood made four to 15 times more than Schwab in the most recent quarter, according to the filings. In total, Robinhood got $18,955 from the trading firms for every dollar in the average customer account, while Schwab made $195, the Alphacution analysis shows. Industry experts said this was most likely because the trading firms believed they could score the easiest profits from Robinhood customers.
Vlad Tenev, a founder and co-chief executive of Robinhood, said in an interview that even with some of its customers losing money, young Americans risked greater losses by not investing in stocks at all. Not participating in the markets “ultimately contributed to the sort of the massive inequalities that we’re seeing in society,” he said.
Mr. Tenev said only 12 percent of the traders active on Robinhood each month used options, which allow people to bet on where the price of a specific stock will be on a specific day and multiply that by 100. He said the company had added educational content on how to invest safely.
He declined to comment on why Robinhood makes more than its competitors from the Wall Street firms. The company also declined to comment on Mr. Dobatse or provide data on its customers’ performance.
Robinhood does not force people to trade, of course. But its success at getting them do so has been highlighted internally. In June, the actor Ashton Kutcher, who has invested in Robinhood, attended one of the company’s weekly staff meetings on Zoom and celebrated its success by comparing it to gambling websites, said three people who were on the call.
Mr. Kutcher said in a statement that his comment “was not intended to be a comparison of business models nor the experience Robinhood provides its customers” and that it referred “to the current growth metrics.” He added that he was “absolutely not insinuating that Robinhood was a gambling platform.”
ImageRobinhood’s co-founders and co-chief executives, Baiju Bhatt, left, and Vlad Tenev, created the company to make investing accessible to everyone. Robinhood’s co-founders and co-chief executives, Baiju Bhatt, left, and Vlad Tenev, created the company to make investing accessible to everyone.Credit...via Reuters Robinhood was founded by Mr. Tenev and Baiju Bhatt, two children of immigrants who met at Stanford University in 2005. After teaming up on several ventures, including a high-speed trading firm, they were inspired by the Occupy Wall Street movement to create a company that would make finance more accessible, they said. They named the start-up Robinhood after the English outlaw who stole from the rich and gave to the poor.
Robinhood eliminated trading fees while most brokerage firms charged $10 or more for a trade. It also added features to make investing more like a game. New members were given a free share of stock, but only after they scratched off images that looked like a lottery ticket.
The app is simple to use. The home screen has a list of trendy stocks. If a customer touches one of them, a green button pops up with the word “trade,” skipping many of the steps that other firms require.
Robinhood initially offered only stock trading. Over time, it added options trading and margin loans, which make it possible to turbocharge investment gains — and to supersize losses.
The app advertises options with the tagline “quick, straightforward & free.” Customers who want to trade options answer just a few multiple-choice questions. Beginners are legally barred from trading options, but those who click that they have no investing experience are coached by the app on how to change the answer to “not much” experience. Then people can immediately begin trading.
Before Robinhood added options trading in 2017, Mr. Bhatt scoffed at the idea that the company was letting investors take uninformed risks.
“The best thing we can say to those people is ‘Just do it,’” he told Business Insider at the time.
In May, Robinhood said it had 13 million accounts, up from 10 million at the end of 2019. Schwab said it had 12.7 million brokerage accounts in its latest filings; E-Trade reported 5.5 million.
That growth has kept the money flowing in from venture capitalists. Sequoia Capital and New Enterprise Associates are among those that have poured $1.3 billion into Robinhood. In May, the company received a fresh $280 million.
“Robinhood has made the financial markets accessible to the masses and, in turn, revolutionized the decades-old brokerage industry,” Andrew Reed, a partner at Sequoia, said after last month’s fund-raising.
Image Robinhood shows users that its options trading is free of commissions. Robinhood shows users that its options trading is free of commissions. Mr. Tenev has said Robinhood has invested in the best technology in the industry. But the risks of trading through the app have been compounded by its tech glitches.
In 2018, Robinhood released software that accidentally reversed the direction of options trades, giving customers the opposite outcome from what they expected. Last year, it mistakenly allowed people to borrow infinite money to multiply their bets, leading to some enormous gains and losses.
Robinhood’s website has also gone down more often than those of its rivals — 47 times since March for Robinhood and 10 times for Schwab — according to a Times analysis of data from Downdetector.com, which tracks website reliability. In March, the site was down for almost two days, just as stock prices were gyrating because of the coronavirus pandemic. Robinhood’s customers were unable to make trades to blunt the damage to their accounts.
Four Robinhood employees, who declined to be identified, said the outage was rooted in issues with the company’s phone app and servers. They said the start-up had underinvested in technology and moved too quickly rather than carefully.
Mr. Tenev said he could not talk about the outage beyond a company blog post that said it was “not acceptable.” Robinhood had recently made new technology investments, he said.
Plaintiffs who have sued over the outage said Robinhood had done little to respond to their losses. Unlike other brokers, the company has no phone number for customers to call.
Mr. Dobatse suffered his biggest losses in the March outage — $860,000, his records show. Robinhood did not respond to his emails, he said, adding that he planned to take his case to financial regulators for arbitration.
“They make it so easy for people that don’t know anything about stocks,” he said. “Then you go there and you start to lose money.”
submitted by jayatum to investing [link] [comments]

How to not get ruined with Options - Part 3a of 4 - Simple Strategies

Post 1: Basics: CALL, PUT, exercise, ITM, ATM, OTM
Post 2: Basics: Buying and Selling, the Greeks
Post 3a: Simple Strategies
Post 3b: Advanced Strategies
Post 4a: Example of trades (short puts, covered calls, and verticals)
Post 4b: Example of trades (calendars and hedges)
---
Ok. So I lied. This post was getting way too long, so I had to split in two (3a and 3b)
In the previous posts 1 and 2, I explained how to buy and sell options, and how their price is calculated and evolves over time depending on the share price, volatility, and days to expiration.
In this post 3a (and the next 3b), I am going to explain in more detail how and when you can use multiple contracts together to create more profitable trades in various market conditions.
Just a reminder of the building blocks:
You expect that, by expiration, the stock price will …
... go up more than the premium you paid → Buy a call
… go down more than the premium you paid → Buy a put
... not go up more than the premium you got paid → Sell a call
... not go down more than the premium you got paid → Sell a put
Buying Straight Calls:
But why would you buy calls to begin with? Why not just buy the underlying shares? Conversely, why would you buy puts? Why not just short the underlying shares?
Let’s take long shares and long calls as an example, but this applies with puts as well.
If you were to buy 100 shares of the company ABC currently trading at $20. You would have to spend $2000. Now imagine that the share price goes up to $25, you would now have $2500 worth of shares. Or a 25% profit.
If you were convinced that the price would go up, you could instead buy call options ATM or OTM. For example, an ATM call with a strike of $20 might be worth $2 per share, so $200 per contract. You buy 10 contracts for $2000, so the same cost as buying 100 shares. Except that this time, if the share price hits $25 at expiration, each contract is now worth $500, and you now have $5000, for a $3000 gain, or a 150% profit. You could even have bought an OTM call with a strike of $22.50 for a lower premium and an even higher profit.
But it is fairly obvious that this method of buying calls is a good way to lose money quickly. When you own shares, the price goes up and down, but as long as the company does not get bankrupt or never recovers, you will always have your shares. Sometimes you just have to be very patient for the shares to come back (buying an index ETF increases your chances there). But by buying $2000 worth of calls, if you are wrong on the direction, the amplitude, or the time, those options become worthless, and it’s a 100% loss, which rarely happens when you buy shares.
Now, you could buy only one contract for $200. Except for the premium that you paid, you would have a similar profit curve as buying the shares outright. You have the advantage though that if the stock price dropped to $15, instead of losing $500 by owning the shares, you would only lose the $200 you paid for the premium. However, if you lose these $200 the first month, what about the next month? Are you going to bet $200 again, and again… You can see that buying calls outright is not scalable long term. You need a very strong conviction over a specific period of time.
How to buy cheaper shares? Sell Cash Covered Put.
Let’s continue on the example above with the company ABC trading at $20. You may think that it is a bit expensive, and you consider that $18 is a more acceptable price for you to own that company.
You could sell a put ATM with a $20 strike, for $2. Your break-even point would be $18, i.e. you would start losing money if the share price dropped below $18. But also remember that if you did buy the shares outright, you would have lost more money in case of a price drop, because you did not get a premium to offset that loss. If the price stays above $20, your return for the month will be 11% ($200 / $1800).
Note that in this example, we picked the ATM strike of $20, but you could have picked a lower strike for your short put, like an OTM strike of $17.50. Sure, the premium would be lower, maybe $1 per share, but your break-even point would drop from $18 to $16.50 (only 6% return then per month, not too shabby).
The option trade will usually be written like this:
SELL -1 ABC 100 17 JUL 20 17.5 PUT @ 1.00
This means we sold 1 PUT on ABC, 100 shares per contract, the expiration date is July 17, 2020, and the strike is $17.5, and we sold it for $1 per share (so $100 credit minus fees).
With your $20 short put, you will get assigned the shares if the price drops below $20 and you keep it until expiration, however, you will have paid them the equivalent of $18 each (we’ll actually talk more about the assignment later). If your short put expires worthless, you keep the premium, and you may decide to redo the same trade again. The share price may have gone up so much that the new ATM strike does not make you comfortable, and that’s fine as you were not willing to spend more than $18 per share, to begin with, anyway. You will have to wait for some better conditions.
This strategy is called a cash covered put. In a taxable account, depending on your broker, you can have it on margin with no cash needed (you will need to have some other positions to provide the buying power). Beware that if you don’t have the cash to cover the shares, it is adding some leverage to your overall position. Make sure you account for all your potential risks at all times. The nice thing about this position is that as long as you are not assigned, you don’t actually need to borrow some money, it won’t cost you anything. In an IRA account, you will need to have the cash available for the assignment (remember in this example, you only need $1800, plus trading fees).
Let’s roll!
Now one month later, the share price is between $18 and $22, there are few days of expiration left, and you don’t want to be assigned, but you want to continue the same process for next month. You could close the current position, and reopen a new short put, or you could in one single transaction buy back your current short put, and sell another put for next month. Doing one trade instead of two is usually cheaper because you reduce the slippage cost. The closing of the old position and re-opening of a new short position for the next expiration is called rolling the short option (from month to month, but you can also do this with weekly options).
The croll can be done a week or even a few days before expiration. Remember to avoid expiration days, and be careful being short an option on ex-dividend dates. When you roll month to month with the same strike, for most cases, you will get some money out of it. However, the farther your strike is from the current share price, the less additional premium you will get (due to the lower extrinsic value on the new option), and it can end up being close to $0. At that point, given the risk incurred, you may prefer to close the trade altogether or just be assigned. During the roll, depending on if the share price moved a bit, you can adjust the roll up or down. For example, you buy back your short put at $18, and you sell a new short put at $17 or $19, or whatever value makes the most sense.
Assignment
Now, let’s say that the share price finally dropped below $20, and you decided not to roll, or it dropped so much that the roll would not make sense. You ended up getting your shares assigned at a strike price of $18 per share. Note that the assigned share may have a current price much lower than $18 though. If that’s the case, remember that you earned more money than if you bought the shares outright at $20 (at least, you got to keep the $2 premium). And if you rolled multiple times, every premium that you got is additional money in your account.
Want to sell at a premium? Sell Covered Calls.
You could decide to hold onto the shares that you got at a discount, or you may decide that the stock price is going to go sideways, and you are fine collecting more theta. For example, you could sell a call at a strike of $20, for example for $1 (as it is OTM now given the stock price dropped).
SELL -1 ABC 100 17 JUL 20 20 CALL @ 1.00
When close to the expiration time, you can either roll your calls again, the same way that you rolled your puts, as much as you can, or just get assigned if the share price went up. As you get assigned, your shares are called away, and you receive $2000 from the 100 shares at $20 each. Except that you accumulated more money due to all the premiums you got along the way.
This sequence of the short put, roll, roll, roll, assignment, the short call, roll, roll, roll, is called the wheel.
It is a great strategy to use when the market is trading sideways and volatility is high (like currently). It is a low-risk trade provided that the share you pick is not a risky one (pick a market ETF to start) perfect to get create some income with options. There are two drawbacks though:
You will have to be patient for the share to go back up, but often you can end up with many shares at a loss if the market has been tanking. As a rule of thumb, if I get assigned, I never ever sell a call below my assignment strike minus the premium. In case the market jumps back up, I can get back to my original position, with an additional premium on the way. Market and shares can drop like a stone and bounce back up very quickly (you remember this March and April?), and you really don’t want to lock a loss.
Here is a very quick example of something to not do: Assigned at $18, current price is $15, sell a call at $16 for $1, share goes back up to $22. I get assigned at $16. In summary, I bought a share at $18, and sold it at $17 ($16 + $1 premium), I lost $1 between the two assignments. That’s bad.
You will have to find some other companies to do the wheel on. If it softens the blow a bit, your retirement account may be purely long, so you’ll not have totally missed the upside anyway.
A short put is a bullish position. A short call is a bearish position. Alternating between the two gives you a strategy looking for a reversion to the mean. Both of these positions are positive theta, and negative vega (see part 2).
Now that I explained the advantage of the long calls and puts, and how to use short calls and puts, we can explore a combination of both.
Verticals
Most option beginners are going to use long calls (or even puts). They are going to gain some money here and there, but for most parts, they will lose money. It is worse if they profited a bit at the beginning, they became confident, bet a bigger amount, and ended up losing a lot. They either buy too much (50% of my account on this call trade that can’t fail), too high of a volatility (got to buy those NKLA calls or puts), or too short / too long of an expiration (I don’t want to lose theta, or I overspent on theta).
As we discussed earlier, a straight long call or put is one of the worst positions to be in. You are significantly negative theta and positive vega. But if you take a step back, you will realize that not accounting for the premium, buying a call gives you the upside of stock up to the infinity (and buying a put gives you the upside of the stock going to $0). But in reality, you rarely are betting that the stock will go to infinity (or to $0). You are often just betting that the stock will go up (or down) by X%. Although the stock could go up (or down) by more than X%, you intuitively understand that there is a smaller chance for this to happen. Options are giving you leverage already, you don’t need to target even more gain.
More importantly, you probably should not pay for a profit/risk profile that you don’t think is going to happen.
Enter verticals. It is a combination of long and short calls (or puts). Say, the company ABC trades at $20, you want to take a bullish position, and the ATM call is $2. You probably would be happy if the stock reaches $25, and you don’t think that it will go much higher than that.
You can buy a $20 call for $2, and sell a $25 call for $0.65. You will get the upside from $20 to $25, and you let someone else take the $25 to infinity range (highly improbable). The cost is $1.35 per share ($2.00 - $0.65).
BUY +1 VERTICAL ABC 100 17 JUL 20 20/25 CALL @ 1.35
This position is interesting for multiple reasons. First, you still get the most probable range for profitability ($20 to $25). Your cost is $1.35 so 33% cheaper than the long call, and your max profit is $5 - $1.35 = $3.65. So your max gain is 270% of the risked amount, and this is for only a 25% increase in the stock price. This is really good already. You reduced your dependency on theta and vega, because the short side of the vertical is reducing your long side’s. You let someone else pay for it.
Another advantage is that it limits your max profit, and it is not a bad thing. Why is it a good thing? Because it is too easy to be greedy and always wanting and hoping for more profit. The share reached $25. What about $30? It reached $30, what about $35? Dang it dropped back to $20, I should have sold everything at the top, now my call expires worthless. But with a vertical, you know the max gain, and you paid a premium for an exact profit/risk profile. As soon as you enter the vertical, you could enter a close order at 90% of the max value (buy at $1.35, sell at $4.50), good till to cancel, and you hope that the trade will eventually be executed. It can only hit 100% profit at expiration, so you have to target a bit less to get out as soon as you can once you have a good enough profit. This way you lock your profit, and you have no risk anymore in case the market drops afterwards.
These verticals (also called spreads) can be bullish or bearish and constructed as debit (you pay some money) or credit (you get paid some money). The debit or credit versions are equivalent, the credit version has a bit of a higher chance to get assigned sooner, but as long as you check the extrinsic value, ex-dividend date, and are not too deep ITM you will be fine. I personally prefer getting paid some money, I like having a bigger balance and never have to pay for margin. :)
Here are the 4 trades for a $20 share price:
CALL BUY 20 ATM / SELL 25 OTM - Bullish spread - Debit
CALL BUY 25 OTM / SELL 20 ATM - Bearish spread - Credit
PUT BUY 20 ATM / SELL 25 ITM - Bullish spread - Credit
PUT BUY 25 ITM / SELL 20 ATM - Bearish spread - Debit
Because both bullish trades are equivalent, you will notice that they both have the same profit/risk profile (despite having different debit and credit prices due to the OTM/ITM differences). Same for the bearish trades. Remember that the cost of an ITM option is greater than ATM, which in turn is greater than an OTM. And that relationship is what makes a vertical a credit or a debit.
I understand that it can be a lot to take in. Let’s take a step back here. I picked a $20/$25 vertical, but with the share price at $20, I could have a similar $5 spread with $15/$20 (with the same 4 constructs). Or instead of 1 vertical $20/$25, I could have bought 5 verticals $20/$21. This is a $5 range as well, except that it has a higher probability for the share to be above $21. However, it also means that the spread will be more expensive (you’ll have to play with your broker tool to understand this better), and it also increases the trading fees and potentially overall slippage, as you have 5 times more contracts. Or you could even decide to pick OTM $25/$30, which would be even cheaper. In this case, you don’t need the share to reach $30 to get a lot of profit. The contracts will be much cheaper (for example, like $0.40 per share), and if the share price goes up to $25 quickly long before expiration, the vertical could be worth $1.00, and you would have 150% of profit without the share having to reach $30.
If you decide to trade these verticals the first few times, look a lot at the numbers before you trade to make sure you are not making a mistake. With a debit vertical, the most you can lose per contract is the premium you paid. With a credit vertical, the most you can lose is the difference between your strikes, minus the premium you received.
One last but important note about verticals:
If your short side is too deep ITM, you may be assigned. It happens. If you bought some vertical with a high strike value, for example:
SELL +20 VERTICAL SPY 100 17 JUL 20 350/351 PUT @ 0.95
Here, not accounting for trading fees and slippage, you paid $0.95 per share for 20 contracts that will be worth $1 per share if SPY is less than $350 by mid-July, which is pretty certain. That’s a 5% return in 4 weeks (in reality, the trading fees are going to reduce most of that). Your actual risk on this trade is $1900 (20 contracts * 100 shares * $0.95) plus trading fees. That’s a small trade, however the underlying instrument you are controlling is much more than that.
Let’s see this in more detail: You enter the trade with a $1900 potential max loss, and you get assigned on the short put side (strike of $350) after a few weeks. Someone paid expensive puts and exercised 20 puts with a strike of $350 on their existing SPY shares (2000 of them, 20 contracts * 100 shares). You will suddenly receive 2000 shares on your account, that you paid $350 each. Thus your balance is going to show -$700,000 (you have 2000 shares to balance that).
If that happens to you: DON’T PANIC. BREATHE. YOU ARE FINE.
You owe $700k to your broker, but you have roughly the same amount in shares anyway. You are STILL protected by your long $351 puts. If the share price goes up by $1, you gain $2000 from the shares, but your long $351 put will lose $2000. Nothing changed. If the share price goes down by $1, you lose $2000 from the shares, but your long $350 put will gain $2000. Nothing changed. Just close your position nicely by selling your shares first, and just after selling your puts. Some brokers can do that in one single trade (put based covered stock). Don’t let the panic set in. Remember that you are hedged. Don’t forget about the slippage, don’t let the market makers take advantage of your panic. Worst case scenario, if you use a quality broker with good customer service, call them, and they will close your position for you, especially if this happens in an IRA.
The reason I am insisting so much on this is because of last week’s event. Yes, the RH platform may have shown incorrect numbers for a while, but before you trade options you need to understand the various edge cases. Again if this happens to you, don’t panic, breathe, and please be safe.
This concludes my post 3a. We talked about the trade-offs between buying shares, buying calls instead, selling puts to get some premium to buy some shares at a cheaper price, rolling your short puts, getting your puts assigned, selling calls to get some additional money in sideways markets, rolling your short calls, having your calls assigned too. We talked about the wheel, being this whole sequence spanning multiple months. After that, we discussed the concept of verticals, with bullish and bearish spreads that can be either built as a debit or a credit.
And if there is one thing you need to learn from this, avoid buying straight calls or puts but use verticals instead, especially if the volatility is very high. And do not ever sell naked calls, again use verticals.
The next post will explain more advanced and interesting option strategies.
---
Post 1: Basics: CALL, PUT, exercise, ITM, ATM, OTM
Post 2: Basics: Buying and Selling, the greeks
Post 3a: Simple Strategies
Post 3b: Advanced Strategies
Post 4a: Example of trades (short puts, covered calls, and verticals)
Post 4b: Example of trades (calendars and hedges)
submitted by _WhatchaDoin_ to investing [link] [comments]

How I Learnt Trading & Investing- My Journey.

I often get asked about how I learnt investing at such a young age. I mentioned a brief overview of how I got into investing and learned the tactics. Here’s the story.
The Idea.
I was 14 years old kid eager to make money. My mom gave me an idea of investing in stocks. It seemed to be practical but I knew nothing about it. Later I asked my mom and dad. They knew very little. I called my aunt who trades every day for the last decade. She told me stuff but it didn’t help either.
The Hustle.
I started watching YouTube videos and read articles of investopedia. I understood nothing. It seemed like rocket science. I then bought a book called the intelligent investor.
This book was for pros. I couldn’t read past a couple of pages. A month passed I was still on square one. I heard stuff like sensex, P/E, index, ROIC but I had no idea what they meant.
Next, I watched YouTube videos on particular terms. I watched a video on what sensex means. What was a stock. How it works. Watching animated videos were quite helpful. I knew something.
A few weeks passed I opened a virtual account on Stock trainer and traded a little. I watched CNBC everyday after I came home from school. Soon I knew the basic ticker symbols. And that’s how I learnt investing, at least the basics.
The First Experience.
In August I had the basic knowledge about stocks through YouTube. But I had no idea how to open a demat account and all. My mom opened it under her name through Icici Bank. Finally, on 6th September I bought my first stock. Coal India x1.
I bought and sold random stocks. I mostly made losses. Over time I learned what fundamental analysis was. I watched animated videos on it.
I soon selected stocks on the basis of P/E ratio, profit and sales growth. It didn’t work. I lost big on TATA Motors.
Then finally I read my first book on stocks. It was called Rule #1. I had to read it 2-3 times to understand. It took me a month to read it.
In August 2018, about a year later I saw a video on technical analysis. I never tried to understand it. I watched it. It was about 1.5hrs long. I was amazed to see how one can predict stock direction based on charts.
Over the course of a few months watched over a 100 videos on YouTube about tech analysis since then. I loved the concept of margin. I came home early after my exam and bought my first stock on leverage.
The Downfall.
It was Infibeam Avenue. I shorted it. I made more money in half an hour than I had made in the entire year.
I was soon addicted. Everyday after writing my exam paper I traded instead of studying for the next paper. Soon my exams were over. I had no time. I had to learn how to swing trade. I spent time analysing charts to figure out my next swing position.
Again I lost a ton of money. I knew I had to scale back. So I set aside a small capital for trading. April 2019, I opened an account on Zerodha as the Icici brokerage was too much.
Over the course I read books like- the intelligent Investor, Stock to riches, how to make money in stocks, how I made over 2 million dollars in the stock market and many more.
So videos and books helped me learn more about stock market more than anything. The simplest way to start is just fucking start. If you’ve no idea what to do, just start. Search. Read. That’s how I learnt investing.
The Sharing.
In March of 2019 I decided to write a short blog on investing on a website called Quora. I was surprised to see the organic reach of my blog. Within hours I got over a thousand views. This encouraged me to write more. Over the course of a year, I ended up writing 450 short blogs on investing on Quora and a couple of books.
In July of 2019 I decided to write a book on my experiences. I brainstormed the ideas and after 72 hours of writing and editing, my first draft was ready. I had no idea on how to publish it. After a few more hours of research and designing the cover I finally published it.
After a few months I wasn’t satisfied with my book. It was only written for beginners. I decided to write something detailed for people who have decent amount of experience in investing. So, 15 days and 400 pages later I finished writing it.
It did pretty good. I got over 5000 downloads. It's free (not trying to promote).
The Pandemic.
The pandemic was a great opportunity to learn more. I'd been watching hundreds of YouTube videos (I got 1k+ offline vids lol).
And I learned more about deeper concepts. Like I'm currently learning about option chain and other forms of data analysis.
The Bottom Line.
At first I made a ton of silly mistakes. I lost money. But I kept learning and recently I started making profits consistently.
It's not a rags to riches story, but it's something most people will go through. I'm no guru or expert, I'm just a guy trying to document his journey.
"The more I learn, the most I realise how much I don't know". - Socrates (or some other old guy).
-Vikrant C.
If you read all that, hats off to you. It was extremely long (and probably not that interesting).
submitted by Vikrantc2003 to Daytrading [link] [comments]

YOLOs are sweet and all, but diversification and position sizing can be a more profitable and consistent way to trade

You’ve heard it all before… blah blah blah… diversification. I’m not going to be talking about diversifying away from tech and into commodities, fuck that. There is a time when commodities will be a good play, times when energy sector is booming, and a time when the financial sector will be rotated back in.
Before I get started, I want to remind you guys that YOLO-ing is fine, but it should be at your “maximum risk tolerance” per play. Any time you YOLO you should expect that play to go to $0. Anything better than 0% return you consider it as a win. The idea of making 200% and turning $10k to $30k sounds so enticing to many new traders/investors. I mean that sounds FKn amazing to me too, but with that mentality you will VERY quickly go from wanting to turn $10k into $50k, to trying to get your $6k back to the break-even, to eventually (and most likely inevitably) saying “Man I wish I still had $10k in my account to do small trades and caterpillar my way back up.” We’ve all been there, we’ve all had sweet wins, and anxiety-inducing losses. It’s cliche, but if you can learn from those losses you will truly improve over time. The best way to grow your account is to inch it up, even 1% per week would be beating most funds.
Everyone has a different trading strategy that will be fine-tuned to their own needs. Bottom line is if you are making plays that require you to watch your phone and see every tick the stock moves up or down, then your position sizing is too big. If you are sweating every time the stock drops 1%, then your position sizing needs adjustment. You should be able to trade/invest comfortably without needing to check the market 25 times per day. If futures opening red gives you anxiety then your position sizing needs to get in check.
Now this is where I talk about diversification. If you only like investing in tech stocks, then got damn who am I to tell you not to? But diversify your portfolio and slowly build positions. Just because you want to YOLO AAPL calls doesn’t mean you also can’t invest in FB, AMZN, MSFT all at the same time. You are all free to do as you please, but what I mean by building your position is to slowly enter each trade with solid entry points that will give you confidence in holding your position for 6 months if you have to.
I used to YOLO and do all that too… When you put 50% of your account into one play that expires in two weeks you are setting yourself up for some anxiety attacks if the position goes against you. I enjoy watching the market just as much as anyone else and can do it all day, but you should have the ability to not check the market every hour if you don’t need to. The performance of the stock market (which is next thing closest to being random) should not have the ability to fuck up your account, mental state, or your relationships with family and friends. Losses are tough regardless of the situation, but I guarantee losses are much more difficult to deal with when deep down you know what you were doing was slightly crazy.
Going back to “diversifying”. Typically I do 60% shares in my account, about 20% theta gang selling spreads, and the other 20% I am either buying calls (2-6 months out) or selling a call AGAINST my share position (as a hedge). If you stick to your game-plan or a set of rules you must obey, which can be something as simple as “only buying stocks when it’s down 1% or more”, you can really start to build strong positions. When you have strong positions and have managed a good amount of entry points for them, then the reward is greater than the risk. Compound this with 6-10 stocks and you will find yourself panic selling much less frequently. If you are heavily invested in 2 stocks and they don’t go your way of course you will panic sell. If you have 6-10 strong positions and 1 goes down, but the other 5 are up, you will have the confidence to hold that losing position until it is eventually profitable or at least back to break-even. How many times have you panic-sold on a red day only for the stock go be big green on the next? How many times did you re-buy on that green day and restart that very same cycle over?
With trading options you really must know how each Greek is going to affect your price in the short-term. Im sure most of you know about options greek’s and such. Sometimes the right play is not to buy a call, but to sell a spread, collect on the stock going up AND collect on IV potentially going down. Here are two examples of plays for AAPL, current stock price $438.66 at the time I am writing this and looking at the option chain (Tuesday night):

  1. Buying the $460 strike September 18 call costs $12.75. At that price, AAPL needs to continue climbing and be over $472.75 at expiration just to get your money back and break-even. I understand you would most likely sell the option if AAPL ran up a couple days in a row, which is reasonable to expect. For this example, lets say AAPL shoots up $480 in a week. Your $12.75 option contract would most likely be worth double. Let’s even say triple for the sake of this example… But remember, anything less than AAPL shooting up right after you buy it will eat into your profits. You would probably say AAPL had an amazing run in one week to get to $480, no? So we can assume anything less than an “amazing run” would have you barely break even. After melting up so much after earnings it wouldn’t be unheard of if the stock just consolidated at $450 for a bit too, no?
  2. A second play to consider is this. Sell a vertical PUT spread first strike OTM 3 weeks away expiration. In this case, we are going to sell the $435/430 PUT spread. Cost for opening 5 credit spreads would net you $1,250 in premium (Max Reward) and have a Max Loss of ($1,300). This is the SAME max loss as purchasing the CALL option from example 1. We are limiting our gains with a spread, but in the previous example we NEEDED the stock to absolutely rocket up in order to make 100% gains. In this example, all we need AAPL to do is stay above $435 in 3 weeks time to collect max premium. Since stonks mostly only go up (* not financial advice), it’s less risky play for a similar reward.
From the above example, option 1 you need AAPL to rocket up to earn your $1275, option 2 you only need AAPL to not go down to receive the same reward. This is why I mix shares/covered calls, spreads, and YOLOs. Different reasons to execute each. Find a trading strategy that works for your style and sanity and create a set of rules. When do you buy? When do you exit at a loss? When do you roll out? When do you take some off the table/profit? Do you play earnings? How long do you intend on holding the position? When do you average down, if at all? You should know all these things before entering any trade. 100% gains on YOLOs are nice, but inching your account up 2-3% per week or even month is actually the greatest gift you can give yourself.
There are definitely different risks to selling spreads such as being assigned the shares and dividend risk, so do your research on that before getting into spreads. Those two things are very easily avoided if you know what you are doing. Know when earnings calls are, know when ex-dividend dates are, keep an eye on your spreads for the short leg going in the money. Personally, my rule of thumb is if the stock has a dividend coming up, roll out the strike prices to further OTM to always keep the short leg out of the money. If there is no dividend and my spread is already ITM, I will hold my position and see if I can get a bounce/reversal to get it out.
Why sell at-the-money spread and not go further out?
A lot of people prefer to sell spreads a bit further out the money, it really depends on preference. In my opinion, selling PUT spreads on fundamentally strong stocks (AAPL, MSFT, AMZN) who don’t stay red very long are good candidates for this strategy. Going further OTM is increasing the max loss if the position does go against you. Another popular play would be to run the wheel by selling PUTs on a stock, getting assigned the shares (at a good price that you would normally purchase at), and then selling calls against the stock until the shares get called away. This strategy requires more margin or a larger account size, but can be profitable. If you run the WHEEL, in my opinion, it is always wise to not actually sell naked puts, but to sell a spread with the long leg very far OTM at the cheapest price, which will cover you in a black swan event such as what happened to Hertz going bankrupt. There was a company/hedge fund called “Option Sellers” that would sell naked call options on a relatively stable commodity, natural gas. One day natural gas m00ned and completely bankrupted his $200m fund. His investors actually owed more money than they invested. Again, his strategy was not very risky until all of a sudden it was. SELLING NAKED OPTIONS CAN BANKRUPT YOU. You can protect yourself for a small percentage of your gains by opening a spread, so do it.
Blog Post Source
Here is a great Reddit post explaining the wheel method.
Intro to the wheel strategy for beginners
submitted by swaggymedia to SwaggyStocks [link] [comments]

Why Beginners Should Avoid Leverage and Where to Direct Their Attention

The temptation to trade on margin can be quite overwhelming for beginners. Especially if you've entered into the trading world through watching others making huge gains. There are better places to direct one's energy in the journey to profitability.
The reason to avoid leverage is because, for small-cap investors, it's a near certain way to lose your capital and get completely frustrated with the trading experience. Put it this way, there are too many factors fighting against you in the market for you to be profitable as a beginner fresh off paper-trading--especially if you're only employing technical analysis as your strategy.
[please note it is not impossible but it is incredibly rare]
We should be asking ourselves why we want to expose beginners to significantly more risk whilst they only have the resources and knowledge of an elementary small-cap retail investor. We should be encouraging another journey that will teach all the lessons of live trading whilst reducing their risk. We wouldn't encourage a friend to search for a home to buy or rent outside their means, nor would we search for a vehicle that we couldn't afford to run...so why should we trade shares that we can't afford to buy? "To make money!?", you may retort...but think about this, there is a way to trade within our means that will make us money and will reduce our risk exponentially. Is it unreasonable to say, that our positions in the market should reflect our knowledge, skill, risk tolerance, and experience?
The best place for beginners to direct their energy is in share trading. The principles of Day Trading can still be applied through Share Trading. You can still develop your DT edge and strategy, you can still set market entry and exit points, you can still trade live. The primary difference being significantly reduced risk. If you treat it as if it was a CFD account you will increase the longevity of your trading journey--potentially all way to your trading goals. This method will aid in building solid risk management, self-control, and strategy implementation.
I am more than happy to explain in greater detail how these set ups would work and operate. I want to see more beginners succeed in the trading world...the ratio of losing traders is far too high and the advice is often too complex.
submitted by wjm2018 to Daytrading [link] [comments]

You need a whetstone (and only a whetstone)

One of the most misunderstood aspects of knife maintenance is sharpening. Go to Amazon and type in "knife sharpener" and chances are the vast majority of results are gimmicks that will damage your knife. So the aim of this post is to tell you (1) why you need a whetstone and (2) why every other solution is worse.

You need a whetstone

A whetstone is fast, safe, and easy to use. An experienced sharpener can restore an edge in under a minute. A novice usually takes about 15 minutes. No fast moving parts, no powered engine to fling knives at 30MPH toward the sharpener, and minimal force required to use. The worst danger you're in is accidentally dropping the knife.
The main fear people have with whetstone sharpening is that they won't be very good at it. But rarely has anybody spent longer than 15 minutes sharpening and not worked through the worst of these fears. So try it!

You can maintain a whetstone. Any method of sharpening that uses abrasion MUST result in wear - that applies both to the knife and to the sharpening medium! That's why sandpaper wears out when you use it and a whetstone dishes after use.
A curved or otherwise wonky surface will not abrade uniformly and therefore impedes your process. You can flatten a whetstone to maintain its shape and ensure it still sharpens well. The vast majority of other systems cannot be maintained.

A whetstone extends the life of your knife. By limiting material removal and removing metal along the edge uniformly, it's possible to (1) avoid high/low spots in the edge and (2) sharpen many, many times before the knife is reduced to a prison shank.
As we'll see below, other solutions typically rely on removing material very quickly or else removing material unevenly for quick results.

Whetstones are versatile. A whetstone can do all the following:

Okay, joking aside, I hope we're all convinced that whetstones are the ideal solution to cooks looking to sharpen their knives. Now let's look at each other solution and why they're a terrible idea.

Every other sharpening solution is worse

Honing rods are not sharpening implements; rather, they are originally intended to re-straighten the flexible metal of an already sharpened blade. While it is true that some rods do include abrasive material that actively remove worn metal, these implements are often problematic and aggressive.
For further reading, see the wiki page on honing (written by u/zapatodefuego).
Handheld sharpeners are just the worst at everything. To begin, these gimmicky tools are only popular because they're cheap and Amazon wants to sell them to you at high margin. But they are barely functional as a sharpening implement. They trade cost and ease of use for literally everything else. They cannot be maintained, remove metal unevenly along the knife surface, and generally just do a terrible job at sharpening the edge.
Ask any professional sharpener to describe what a knife looks like after multiple sessions with a handheld carbide device and they'll sadly recount tales of knives with massive u-shaped recurves near the heel or wherever else the owner used too much pressure.
"But no," I hear you saying already. "Handheld sharpeners are better than nothing! I don't have time to learn whetstones and want a safe knife." While yes, handheld sharpeners are better than nothing, it's the same as saying that drinking for a little while longer will forestall a hangover. The edge you get from the device will be terrible, barely better than a rounded off edge and with all the longevity of an inebriated buzz.
I'll finish by linking this YouTube video by Randy Johnson with further information on the topic (he is more on the pocket knife side, but same principles apply)
Electric sharpeners (Ken Onion Work Sharp, Tormek) for those of you worried that whetstones would be too hard to learn on, imagine all the same principles of whetstone sharpening, but everything moves at 100x the speed. It's the equivalent of teaching your kid to ride a bicycle by setting them atop a Ducati and wishing them luck. Accidentally overgrind an edge for three passes on a whetstone? You'll need a microscope to tell the difference. Overgrind on a powered belt and you'll know very quickly.
Beyond the aggressive learning curve, the other reality to deal with is that the increased speed also means that slips can take off fingers or, worse, turn your paring knife into a lethal projectile.
Q: But u/marine775, don't some professional sharpeners used powered tools like the ones you mention? A: Yes, and if you're here reading this article to learn about sharpening, that's probably a clue that you don't need one of these. 
Guided sharpening systems (Lansky, Wicked Edge) are expensive, difficult to maintain, and non-versatile. If the electric sharpeners were the equivalent of learning to ride a bike with a Ducati, then guided jigs are like putting on training wheels that somehow cost 3x the price of the bike.
Of all these solutions, guided jigs are the least offensive to offer beginners. That said, they're just not well-suited to kitchen knives for a variety of reasons:

Appendix: angle guides, nagura stones, and more

Don't use angle guides. They're a crutch that's going to do more harm than good. See this recent video by James at Knives and Stones for more reasons as to why: https://www.youtube.com/watch?v=bw15qoNm9Hw
Nagura stones: 99% of the time they're included, it's as a value add by the Amazon vendor. Most of these nagura stones are pretty junky and won't do much for you, but they make the kit seem like a better deal and therefore drive more sales by deceiving the buyer into a predefined choice architecture.
Be cautious using a sharpening service. The most prolific businesses offering knife sharpening tend to be bad at it. They're paid by the knife, not by the hour and so won't be shy about removing metal fast and just focusing on the edge. There are many horror stories on the sub about paid sharpening services returning knives covered in scratches or with giant recurves ground in. Some of these paid services are well-known and even have social media channels dedicated to disseminating sharpening knowledge. Others will manipulate online review services to ensure they have a high rating.
That said, other sharpening services are great. It's just hard to tell the differences without extensive background.
submitted by marine775 to chefknives [link] [comments]

Why you should trade futures - WSB Edition

Note: all numbers are approximate. Do your own research. I'm sure I fucked something up, so let me know what and I'll fix it.
Alright, ignore my flair for a minute. I earned it, but that doesn't take away from everything else I'm going to say. This is why you should get approved for futures, especially before the end of the month if you can.
- Leveraged as fuck
So you wish you had the $33,000 to be able to trade 100 shares of SPY, right? Even with margin, you're looking at tying up $16,500 just for them to hold in case SPY drops by 50% (it won't) and that's a terrible use of leverage. You can buy a fucking house with less money down (percentage-wise). /ES is the equivalent of 500 shares of SPY (it's really 50xSPX, but you get the point) and only uses $13,000 or so in buying power so you can ride those waves with way less money in use. You can also trade /MES which is the equivalent of 50 shares of SPY with only $1300 or so, so with $2600 you can emulate having 100 shares of SPY. Way better use of margin, right?
I should add a note here that you have to be prepared to have it go against you too, so don't trade two /MES contract if your account is only $3000 because a 4 point SPY move will take your account out and put you in a margin call.
All the people playing GLD and SLV? If they have the cash, they could trade straight up futures (with this leverage, do you really need options?). For example, /SI is $11,000 in BP, but it equals 5,000 ounces of silver. So those two-dollar moves? That's right: $10,000 in profit. They have mini versions of the metals too, so if you're scared of /SI swings (like I am), you can trade /SIL which is 1,000 ounces, so a fifth of the moves and a fifth of the leverage. There are also mini-oil, mini-natgas, currencies and mini-currencies. If you really are confident in bushel price of wheat going up, you can trade shit like what, corn, soybeans. My broker doesn't offer Lean Hogs, but if yours does, you can join the retarded Lean Hogs Gang.
- 23 hours a day, 5 days a week
Most products trade 23 hours a day, 5 days a week including the Nasdaq, Russell and S&P500 futures. They start at 5pm Central Time (CME Time) on Sunday and run to 4pm Central Time on Friday. Ever watched futures rocket green as fuck, get your dick in your hand ready to go, just for it to reverse overnight and be flat by morning? Imagine locking in your gains at night on a /ES call instead of waiting for open to get fucked on your SPY calls. Or scalping $5 per point with a long or short /MES contract when you see the move coming (or $50/point for /ES).
- Hedging (we don't do that here)
So I know this isn't the most risk-averse place, but you can go long or short any contract with no borrowing fees. There's no "hard to borrow" bullshit in futures, so you can pick an opinion, and hedge your 100 SPY 220p FDs with a long /MES overnight just in case it goes completely against you. You can also scalp /ES or /NQ options overnight when the Europeans sell off all their gains that you paid for.
- The options are coming, the options are coming
The micro-S&P and the micro-Nasdaq are both getting options soon so you'll be able to buy /MES and /MNQ calls and puts starting August 31st. I have no opinion on how these will work until they roll out, but if you ever dreamed of having 100 shares of SPY and selling covered calls for easy income, you'll be able to but two /MES contracts and sell calls against them. You can also sell naked puts/calls for thousands less in buying power (if they don't get blown through of course) on those two micro products.
- No fuckery
Speaking of SLV, people have been posting all the reasons that JPM fucks with the SLV ETF and to be honest, I've never read them. But /SI is a deliverable contract of 5,000 ounces of silver. No management fees for the ETF, no oversight. Straight up fucking contract at what price you're willing to buy the silver. The products are pure and pretty self explanatory.
- No PDT Rule on any products ever
The CME has no daytrading rules, so you can buy/sell all goddamn day without getting your account fucked for 3 months. I constantly see people on here talking about "Well, I have to have diamond hands since I'm out of trades." You'll never know that feeling again.
New smaller futures
"But lucasandrew, I don't want to get completely fucked with a 2% move against me!" I get it. The Small Exchange was made by the guys who made tastyworks and are available most places that futures are offered. Their products take $100 to $500 in buying power and the notional value for all of them is extremely simple. Each penny move in the price is $1. They have /SM75 which is the 75 most-volatile stocks they could find with equal weightings by industry. They also have /SFX with dollar exposure where you go long if you're bullish in USD and short if you're bearish. It's weighted against multiple currencies instead of just one so individual events in Australia don't totally fuck your position. They're also releasing an interest rate product, a small oil product and more coming up. You can see all the deets at www.thesmallexchange.com. These products are getting options once they have approval too.
- Warnings
If you just got your first Robinhood account and they hooked you up with a Hertz share you're trying to daytrade, FUTURES ARE NOT FOR YOU. If you've been around a little bit and understand the risks you're taking, they are, in my humble opinion, about a million times better products.
The leverage is awesome and a bitch. If SPX moves 40 points down in a day and you're long /MES, you're out $200. If you're long /ES, you're out $2000. Know how to use the leverage in your favor and how to handle if it goes against you.
SOME PRODUCTS ARE DELIVERABLE. Remember people buying oil contracts for negative money? That wasn't a flaw in the design. It was that nobody could store 5,000 barrels of oil, so they were literally paying people to take the oil contracts off their hands. The equities futures products are all cash-settled, so you'll never have to take delivery, but wheat, corn, soybeans, (presumably) lean hogs and oil are all physical products that if you hold until expiration, you have to accept physically at a predefined location. See the CME website for contract details that will tell you if it's physical delivery or cash. Or, do yourself a favor and know when the contract ends and get the fuck out or roll before that date.
- TL;DR futures are the ultimate WSB tool and not a lot of people understand anything about them. The micros are getting options on August 31st, so you can daytrade some equivalent of SPY/SPX to your heart's desire. Tastytrade has a beginner's course and so does the CME. If you don't understand futures or don't feel confident, take them both.
Positions: Long /MES, Long /M2K, synthetic strangle on /RTY, credit put spread on /NG
Edit: Looked it up and lean hogs are cash settled.
Edit 2: Screenshot of positions as requested: https://i.imgur.com/6QHSavc.png
submitted by lucasandrew to wallstreetbets [link] [comments]

All Around the Campfire: A Guide for Retinue Members


Retinue Member Cost Function Advice
The Alchemist 2500 Unlock Snake Oil and 25% chance of not consuming crafting material upon crafting Very useful for the monster slayer origin. It can be helpful if you do a lot of hunting and crafting. The snake oil is also a good way to turn inventory clutter into money. Each snake oil has a base price of 650 coins, while it isn't going to make you rich, it can be quite profitable compared to selling the materials directly.
The Cartographer 2500 Gives 100-400 coins for each discovered location. More coins for locations far from cities. Fairly useful retinue member if you like to explore. It also provides a somewhat steady cashflow that can help you pay your troops, even if you don't go out of your way to explore. The right way of using this retinue member is to clear out enemy encampments regularly in order for more of them to spawn, so the cartographer can pay you more money.
The Lookout 2500 Increase sight range by 25% and reveals more information about footprints. One of the worst retinue members. You can see enemies coming from afar most of the time. You get a sound warning for enemy appearing in range. You usually don't get anything useful from footprints anyways.
The Scout 2500 Travel 15% faster and prevents sickness and injuries based on terrain. Marginally useful member because of the 15% faster movement. Injury and sickness prevention is not useful at all since they rarely trigger and you can just pay a paltry sum to heal it in temples.
The Blacksmith 3000 Repairs equipment worn by dead troops and general repairs are 33% faster. This retinue member is more helpful if you run a heavy armor company or have a decent number of heavy units, since losing heavy armor can be costly and repairing heavier armor is much slower compared to repairing light ones.
The Negotiator 3000 Allow for more rounds of negotiations and won't lose reputation if they abort the negotiations. It can be more helpful towards late game as your contracts become more profitable, but it normally doesn't make that much of a difference in my experience.
The Quartermaster 3000 Carry 100 more ammunition and 50 more of medicine and tools. This retinue member is only helpful if you plan on going on long trips outside civilization and can't get enough supplies in time.
The Scavenger 3000 Recover part of the ammo you use and turn broken equipment into tools Allows for a certain degree of self sustainability when it comes to repairing without having to go to towns to get supplies, but generally fairly useless as you can usually sell the salvaged equipment for money and buy tools with them.
The Trader 3500 Increase trading goods' availability at the market, allowing for trading at higher volumes. Very helpful for the trading caravan origin. It can be helpful if you plan to do a lot of trading.
The Cook 2000 Provisions last for 3 more days and increase healing rate by 33%. Extremely helpful retinue member if you are going out into the wilds for discoveries. Only moderately useful otherwise. This character can effectively increase your movement radius quite significantly. The healing rate is a nice boon too.
The Minstrel 2000 15% more renown and more likely to get useful information in taverns Helpful if you feel like your company is strong enough to take on enemies with higher renown levels but you still need to get more renown. The tavern information perk is useless since you have to pay for them and they are extremely unhelpful.
The Brigand 2500 You can see some caravans all over the map Only useful at all if you raid caravans (which you have to do in order to unlock him). Generally, caravans are not worth raiding. The amount of stuff you get from raiding can easily be offset by the more profitable contracts in the settlements.
The Recruiter 3000 Pay 10% less to hire and 50% less to try out. Also increase availability of recruits. This retinue member is generally more helpful if you play as the peasants or the manhunters, since these two origins tend to recruit more characters in order to offset casualties.
The Drill Sergeant 3500 Makes your men gain 20% more experience at lv1 and 2% less per level afterwards. Also men never lose morale from being in the reserves. This retinue member is more helpful for the peasants, the manhunters and beginner warbands as it can help the fodder units level up quicker and become useful. Removal of the morale penalty is a good bonus but ultimately fairly useless since you can afford drinks at the tavern if you can afford to have a lot of troops in reserves.
The Paymaster 3500 Reduce wages by 15%, desertion chance by 50% and stops troops from asking for more pay. This retinue member is a must-have for late game warbands. 15% off of wages can be a lot of money saved that you can use for other purposes such as buying equipment. It also stops the greedy units from asking for more pay, which is great.
The Surgeon 3500 Guarantees the survival of a unit if said unit doesn't have a permanent injury. Also reduces time to heal from a wound. This retinue member can be helpful, both in preserving valuable members of the warband and in preserving the overall combat capacity of the warband. If you feel confident that most of your units can survive the battles, the surgeon is not necessary.
The Agent 4000 Reveals available contracts in the settlement tooltip, help maintain relations with factions and make bad relations go away faster. This retinue member is very helpful if you plan on doing a lot of contracts and/or trading, which most of you should. The agent can keep the relationship high, which means the contracts will be more profitable, the owners will more likely accept haggles and the goods in friendly settlements will remain cheap.
The Bounty Hunter 4000 Pays 300-750 coins per champion slain and increases chance of champion spawning. The usefulness of this retinue member is highly dependent on luck. The increase chance for champion slaying didn't really work out for me.
Of course, the overall usefulness of each retinue member may vary with your experience. I am simply writing this down as a general guide for the retinue members and how to make the most out of it.
submitted by TheMogician to BattleBrothers [link] [comments]

Best Trading Strategy for Smaller Accounts

Hi All,

So I'm a recent college graduate with a degree in Finance and have even taken an Options specific course while I was in Undergrad. Recently, I have wanted to wet my beak in Options trading to really get a feel for it. So, due to having student loans and currently pursuing my MBA, I was wondering what strategies you guys would suggest for beginners with low capital (about $1,500). I was thinking of doing Bull Call Spreads, but with having a small amount of capital I wasn't sure if there was a better strategy that I could pursue that would not use too much leverage/margin.
Any tips are appreciated!
Thanks!!
submitted by Prewrkout_CashFlows to options [link] [comments]

Best tips for a beginner to use?

What are your tips for a beginner that never traded stocks? Is fidelity a good broker for day trading and swing trading? What is your perspective on this matter? Should you look into options as a beginner, it's really appreciated! And also, should you day trade or swing trading penny stocks? Should you stick with a cash account or go use a margin account?? Thanks!
submitted by Apennyis1cent to Daytrading [link] [comments]

The Best Crypto Exchange for Beginners and Pros

The Best Crypto Exchange for Beginners and Pros
In short, it´s a regulated crypto exchange. Fully licensed in Estonia, fully compliant with EU banking laws, so it´s very safe. Also the CEO does a live AMA on Youtube every week, that´s a plus in transparency. You can deposit in FIAT (EUR, GBP, SEK, AUD; USD to come next month) by Credit Card or wire transfer. Of course you can deposit Crypto as well. They offer Fiat and Crypto Pairs, margin trading (with up to 5x leverage), copy trading and will offer Credit Cards as well next month. Next week they will start the first legal tokenized security market, enabling them to offer bonds and securities to their clients under a regulatory Sandbox in Montenegro. The first project there will be a tokenized Real Estate project in Japan (Tangible). Also CoinMetro has one of the, if not the best affiliate programs in Crypto, giving new signups 5€ on a 50€ deposit, while giving the inviter 40% of the fees the invite pays for life. It´s not much individually because the fees are some of the lowest i´ve ever ssen.
Visit Here : https://coinmetro.com/?ref=reddug
submitted by StarxDust to CryptoTrade [link] [comments]

binance setting new traps on spot margin settings

Something went wrong with binance interface on margin (not that it doesn't happen regularly and you don't give a toss - as a company /no responsibility/)....

I just started using margin, on spot market only for now (don't understand futures yet), for last 2+weeks...

I usually was:

- transferring base market coin (here BTC), doing longs (though I tried shorts with borrowing the pair coin)

- borrowing BTC before the trade

- buying pair coin on 'normal' setting (no 'borrow', no 'repay') of the whole or most of the available now BTC amount (mine and borrowed)

- and selling either on 'limit', market or OCO sell, with repay setting, and everything was going smoothly...


Now:

a) even if I do buy on 'normal' option setting, if I do 100% (all what I should be able to buy on 'normal' out of already available bitcoin) it forces me (even though I Did Not Choose 'borrow' option on the trade, so it shouldn't) (though it asks before execution - a pop up comes ut that such and such amount will be bout out of your means in posession, and such will be bought on 'borrow' basis) to consider borrowing
(so it doesn't buy anymore 100% of what bitcoin I have already available, in normal mode; which it originally should and it did; it asks me to use borrow to the maximum - if I haven't used full leverage possible on transferred base BTC coin)


b) it doesn't 'repay' anymore automatically with sell 'repay' option.... (I have to visit myself and do it manually each time)

c) with sell option it doesn't choose maximum available on the trade /bought earlie (in possession) pair currency to sell at 100% chosen level, but, the same as with buy, again, on sell
100% setting, it tries to add more of the pair coin (again with a pop up notification) on by 'borrowing' it; and putting you in debt on the pair coin of the trade which you've just sold on long... !(if you won't watch out and press things/jump too quickly) - even you're on 'repay' NOT 'borrow' option for sale!!!! on that coin tries to force you to borrow what's possible of the pair currency and sell it immediately - so to run into debt onto that currency and having to buy it back)
(so one has to now check how much of the pair currency he/she has and put the amount manually)

It makes most of your 'automatic'/"handy" settings on spot margin trading going to shit and become just another level of trap (among many other existing - purposefully I believe - in the cryptocurrency world) for a trader - especially a beginner... (but anyone else also)





I'm 1500% sure (out of experience by now of how this whole shady cryptocurrency world works for small, and what you do do for big) you set up this change as a trap... though you'll have 1000 explanations (80% of them not making sense) ready by now...
submitted by Elavias to binance [link] [comments]

How to invest in FIFA 20

So I've seen a lot of posts on here that have been asking how to trade/make coins/who to buy for team of the season, so I thought I'd make a post to save everyone a whole lot of effort. Here is how to trade in Fifa 20.
Firstly, here's what you have to get into your head: trading tips do not work. At all. If someone online is telling you to buy player X for Y amount of coins, it is already too late. That person has probably cornered the market and is trying to get you to buy his own players. It's a glorified ponzi scheme. This is why I will only lay out the technicals and not tell you who or what to buy - this is better in the long run anyway.
I believe that all FIFA trading can be broken down into two styles: investing and bid/Bin spread trading. I will cover both.
Investing
Investing is the long term approach, and generally has a higher reward/time ratio while also carrying slightly higher risk. Here you buy players in bulk that you believe will go up in value in the short term. Key players to buy are gold rares/high rateds which will be useful for SBCs or objectives. For example, in upcoming TOTS SBCs, 86 rateds will probably be useful, so you buy them up at X and sell them for X + 3k and make a profit. Making sure that your selling price incorporates EA's 5% selling tax.
Here's a simple equation:
Selling price = (purchase price + profit margin) / 0.95.
Remember for this method, you are speculating that the value of the player will go up, so you will have to hold until this reality comes into fruition, and it is not guaranteed to happen. Finally, you have to make sure that the player's price hasn't already priced in the change of value (the market has already made the price higher to account for the players use in SBCs, this will mean that if an SBC does occur, the player's price won't rise much). To check if an event is already priced in, look at a player's daily price graph on FUTBIN and see if it has risen over the last few days.
Trading
Trading is my favourite way to make money on Fifa 20, it's so simple and very low risk. This can also be broken down into two categories: high margin and high volume.
Before I tell you how to trade in FIFA 20, you have to understand two things.
Firstly, the idea of a bid/BIN spread. The average bid price of a card is the average amount you can buy the card for using the auction-style bidding process, while BIN is the lowest price that you can buy the card for instantly on the market place. The average bid of a card will always be lower than the BIN of a card. The difference between the average bid versus the lowest BIN is what is called the spread.
Spread = BIN - Average Bid
Secondly, the difference between margin and volume of trades. Margin is the profit made in a trade (adjusted for EA's selling tax). Its equation is:
Margin = (Selling price x 0.95) - cost.
Note that selling price is always multiplied by 0.95 BEFORE adjusting for cost. This means that buying and selling LOWER priced cards will more often than not create a higher margin (or more realistically, a lower-risk margin).
While volume is the speed at which you can buy and sell cards (for example, gold cards are bought and sold more frequently than silver cards as they have greater utility).
The profit that you can make in a given time period is:
Profit = Margin x Volume.
Now, trading can be done by either trading high volume, or high margin, cards.
For high volume, say for example, there is card X that has an average bid of 700 and an average BIN of 950.
You bid on as many card Xs as you can at the average bid, 700. You then sell the cards by listing them for their average BIN, taking advantage of their bid/BIN spread, making 250 coins per trade. To make a substantial amount, you will need a high volume, to up the total profit. So you buy and sell as many as you can.
For high margin, the same process is true, but you buy and sell fewer cards, but that is fine as the high margin means you don't need to turnaround as many cards to make as much profit. Typically, higher margin cards are bronzes/silvers that are useful for SBCs. You can buy them all on bid and corner the market, selling them at a higher BIN than normal, with most SBC-doers willing to pay the extra price to save a few extra seconds.
This strategy relies on there being a scarcity of the card in question and few viable substitutes. This means you can easily control the market, and the price rise won't cause the other people to use alternative cards.
Word of warning for high margin strategies: Often in high margin strategies, you may stumble across a card that seems ripe for a high margin spread play. However, the BIN may be inflated by another trader already operating in the same space. If this happens, you may buy up the cards, and find that the BIN quickly collapses with insufficient demand to keep it high. Therefore, make sure that the BIN price makes sense (is the card really useful for SBCs or objectives etc?). For this reason, I believe that high volume trading is better for beginner traders instead, due to a better risk profile.
Deal Sourcing
It is actually quite easy to source a trading opportunity. For high volume and high margin trades, large spreads are typically found in SBCs as people rush to buy players to complete the challenge. Therefore, it can be easy to make a profit on SBC cards. To find a card just look at a sample of different cards that could fit a certain SBC.
Risk Mitigation
What you do not want is to put all your coins into players and then be unable to sell them. Therefore, an easy way to reduce risk is to find players whose bid is around their quicksell value. This means that the bid can not fall very far, limiting potential downside.
THING TO REMEMBER: Always account for the 5% tax when working out bid/BIN spread.
Tl;dr I lost my investment banking internship because of Covid-19, thought i'd waste my limited financial knowledge by teaching you guys really basic trading.
submitted by Laughingboy14 to FIFA [link] [comments]

Defi Coins List In Detail

A Detail List Of Defi Coin

Lending

Trading

Payments

Wallets

Interfaces

Infrastructure

Analytics

Education

Podcasts

Newsletters

Communities

submitted by jakkkmotivator to Latest_Defi_News [link] [comments]

How to operate online gold investment to ensure money?

How to operate online gold investment to ensure money?
With the continuous development of the Internet, more and more people now choose to invest online. In addition, spot gold investment has an unparalleled advantage over other investment products.

Online speculation of London gold is particularly popular with investors due to its convenient and simple operation, long transaction time, and no geographical restrictions.

However, when investors conduct online gold speculation transactions, how can they ensure its security is the most important point for everyone. So, how can online gold investment be operated to make money? There is a detailed explanation below.

https://preview.redd.it/xg8xodyynxh51.jpg?width=500&format=pjpg&auto=webp&s=6a52aab213057fa0370d8d208441baf01d8d28b4
First of all, beginners must study patiently, step by step, and do not rush to open a real trading account. Don't compare with others, because everyone needs different learning time and gains different experiences.

In the learning process of simulated trading, your main goal is to develop a personal operating strategy and style. When your profitability increases, and your monthly profit gradually increases, it means that you can open a real trading account for margin Traded.

Click http://t2.mademoney.net, add your teacher's whatsapp: +918098239109, help you open an account, and teach you one-on-one how to make money online.

Second, remember not to use your living funds as trading capital. Excessive capital pressure will mislead your investment strategy, increase trading risks, and lead to even greater mistakes. And each investment is best to be one-third of your idle funds, and you can gradually join when you succeed.

https://preview.redd.it/ql713y8znxh51.jpg?width=600&format=pjpg&auto=webp&s=31ae2e30ec487ef6afc391814e1319ed606b33cb
Third, strictly stop losses and reduce risks. When you are trading, you should establish a tolerable loss range, and make good use of stop-loss trading to avoid huge losses. The loss range depends on the situation of the account funds. It is best to set the total account amount to 3-10%. Reach your tolerance limit, do not find excuses to try to bet desperately to wait for the market to turn around, you should close your position immediately.

Finally, study patiently, diligence can make up for one's weaknesses. There are many ways to learn about margin operation. You can read relevant comments every day, learn about various information about gold, carefully analyze the trend of gold, keep learning every day, and work hard to make up for your weakness.
submitted by Xboxend to u/Xboxend [link] [comments]

Margin Trading for Beginners - PHEMEX GUIDE - SUB ACCOUNTS Introduction to Margin/Leverage Trading on Deribit Margin Trading  Trading Terms - YouTube The basics of margin trading Margin Trading 101: How It Works - YouTube

A maintenance margin is the minimum amount of equity that must remain in a margin trading account. It is expressed as a percentage of the total current market value of all the assets held. To put it a different way, your equity is the current market value of all the assets you own, minus the margin loan borrowed from the exchange. So is margin trading good or bad. Well, margin trading is an incredible opportunity offered by brokers to trade large amounts of an asset in the financial markets with a small initial investment. Of course, this isn’t without any risks, but if managed well, you can amplify your profits while trading currencies. Margin-trading is an important tool that all of us should understand to know if we should implement it or not, and how… by crypt0trips The Definitive 2020 Guide to Margin Trading for Beginners — Hive 4.8 (6) Contents1 Margin Trading Definition:2 Margin Call:3 The Advantages of Margin Trading:4 Risks of Margin Trading: Margin Trading Definition: Margin Trading is purchasing stocks without investing the full capital. The trades have a systematized strategy for purchasing stocks in future market without having the capital. For example, Assume that you want to purchase 1000 … Margin Trading for Beginners. Aug 22, 2018 | Day Trading, Stock Brokers. Benefits of Margin Trading Increase Buying Power and Profit Potential. Margin trading offers you the ability to increase your buying power and, correspondingly, your potential profits from trading. Margin trading allows you to buy a greater value of stocks and options

[index] [365] [155] [402] [501] [72] [39] [142] [168] [168] [14]

Margin Trading for Beginners - PHEMEX GUIDE - SUB ACCOUNTS

Disclaimer: Trading carries a significant risk of loss and may not be suitable for all investors. Traders should assess these risks either themselves or in consultation with a financial advisor ... Brian explains the basics of margin trading to answer this question. ... Day Trading Strategies for Beginners: Class 1 of 12 - Duration: 55:18. Warrior Trading 7,083,405 views. ... A Beginner's Guide to Trading Using margin margin. Loading... Unsubscribe from margin? ... 9 Tips for Trading on Margin 👊 - Duration: 10:18. UKspreadbetting 4,738 views. Forex trading for beginners, part 5 - How Margin trading works, examples of why and when margin call and stop out happens. What is Equity and Free Margin. I ... What is margin trading? What is a margin? What is the difference between a cash account and a margin account? In episode #34 of Real World Finance we dive de...

#