So I sold my car to a junk yard/auction place. It was extremely hard. It was still running but had a potential transmission problem. Needless to say, I’m getting great gas mileage now. I originally purchased my Jeep for $15,000 about ten years ago. Put a good 170,000+ miles on it. I ended up selling it for $455.00. I have been meaning to have a stock related post so this will be the starter. I have been playing around with RobinHood and the lovely free commissions. I have put $455 in an account and will be working my way at making back my $15,000.00 hopefully. I will post a blog post at least once a week but also will post on when I enter and get out and why. I’m also going to try and mix my strategy up for longer holds. If I can have the same car for 10+ years…I should be able to hold a stock for more than a week. Right?
I will be trading solely options. Unlike the OTC, big-board stocks are not my forte. This little play account will not be easy and could crash and burn in a heartbeat. Unlike other stocks, options have an expiration date. If the price of the underlying stock isn’t above the strike price you will have lost your entire investment on expiration date. Options were always such a mystery to me. The idea of paying $5.00 for one contract. The strike is for 210.00. The stock price is $205.00. In order for you to make any money you need stock price to be at $210.00. To get back your initial investment the stock needs to be $215.00. Why would you pay $5.00 for a stock that is $10.00 away from being in the $$? That is where the intrinsic and extrinsic values come in. Let’s say you bought some contracts today 8/10/19. The expiration date is 10/12/19. You have two months for that stock to go up. The stock has a history of making big swings. It could gain $20.00-$30.00 in a single trading period. So it may seem like it’s a lot but you could erase that initial $10.00 difference in a matter of one day. The closer you get to the expiration without the stock price going up it loses value. That $5.00 value could turn into $2.50 after a month and the stock is at 206.50. You get a little confused as the stock price has gone up but your option lost value. The loss is due to the time that has been lost. You no longer have two months to make up the difference.
So Here It Is!! Updates Coming!