People set money aside each week/month/quarter or whatever. That's how. That money they set aside you don't have to immediately buy a stock. They may hold off for a price point to enter. Not that difficult to understand
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- Thread starter SoapyCy
- Start date
Yea I sold off some stock from march that I bought major cheap and took a nice profit then hit big again on peloton when I bought some debit spreads and stock. This week though I took a hit. Thought we might have one more good week before everything turned down before the actual election
oh, i understand it. I invest in my 401k every paycheck automatically and a set amount every week automatically - the difference for me is i put it in a fund right away, i don't hold it in cash so i'm not tempted as much. in previous years i was tempted to truly gamble with that money. now i'm a strictly buy and hold kind of guy.
We are currently down about 500 points off the high for the week. If that's something to panic-post about on CF, then the stock market isn't a good investment choice for you.
I'm really confused by what you call a debit spread? I assume you are talking about an option spread but those only come in calls or puts. And usually debit means you bought them up front but you can do that with either call or put options.
Nothing I said was a panic post. You just took it that way, for whatever reason. All I said was a fact, that the market drops 2-3 weeks before the election. Sorry that somehow burnt your butt.
I would normally be more concerned about another correction, but understand there is a lot of money (not mine) idle on the sidelines
Correct. You can do a debit spread in both a call debit spread or a put debit spread. A debit spread is where you simultaneously buy and sell an option at different strike prices with the same expiration date. A call debit spread is where you are buying a call option (typically near the current stock price) and then sell an option at a higher strike price than the call option you bought. The difference in the premium between the option you bought and sold leaves you with a small debit to be paid to enter. The larger the spread of the strikes the larger the gain. You do this strategy cause you aren't susceptible to IV crush like you are with regular put and call options, your max loss is the debit you paid, and are able to enter high reward option trading on expensive stock for a much lower price. You can do this same type of strategy with a put as well. Your max gain on this strategy is the difference in the two options strike price minus the debit you paid to enter.
The opposite side of the coin is a credit spread which is where you are paid to do essentially the same thing. The issue with credit spreads is you could be assigned the call/put you sold early which means you have to end up covering your naked contract within 24 hrs.
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Debit Spread Definition
A debit spread is a strategy of simultaneously buying and selling options of the same class, different prices, and resulting in a net outflow of cash.
I do the same with my 401K's as well. I just have some left over money at the end of each money after all my bills etc have been accounted for so I usually put some of that left over money into a personal account that I buy and trade stocks and options with
Correct. You can do a debit spread in both a call debit spread or a put debit spread. A debit spread is where you simultaneously buy and sell an option at different strike prices with the same expiration date. A call debit spread is where you are buying a call option (typically near the current stock price) and then sell an option at a higher strike price than the call option you bought. The difference in the premium between the option you bought and sold leaves you with a small debit to be paid to enter. The larger the spread of the strikes the larger the gain. You do this strategy cause you aren't susceptible to IV crush like you are with regular put and call options, your max loss is the debit you paid, and are able to enter high reward option trading on expensive stock for a much lower price. You can do this same type of strategy with a put as well. Your max gain on this strategy is the difference in the two options strike price minus the debit you paid to enter.
The opposite side of the coin is a credit spread which is where you are paid to do essentially the same thing. The issue with credit spreads is you could be assigned the call/put you sold early which means you have to end up covering your naked contract within 24 hrs.
.Debit Spread Definition
A debit spread is a strategy of simultaneously buying and selling options of the same class, different prices, and resulting in a net outflow of cash.www.investopedia.com
Ok, just a call spread and I guess I'd not heard it referred to as the more generic debit spread.
I can't believe Gamestop's stock is still holding on. The company is closing 450 stores this year alone.
They didn't close that many this year but they needed to close some. Way too dense in some cities. It's been a 4 bagger for some of the shares I bought but I was way too early with some. This is all about the broken market and short interest that is greater than the number of shares outstanding. Musical stock certificates and someone could get burned.
Bull call spread or Call debit spread are all the same thing. Saying call spread is also generic because a call credit spread would be a call spread and if you build a call credit spread you are hoping or wanting the underlying stock to go down.
Regardless, sorry for the confusion. I should have just said I have call debit spreads
Bold and underlined above. I try to take a 10% increase in share price and sell 10% percent of the holdings. That locks in the profit on that stock at that given time. 25% gain I sell 25% of my original purchase. Stock have done so well the last 6 months that I have 25% cash right now. For my house that is a huge cash percentage. Doing it this way takes the guesswork out after a purchase and it feels good to sell a profit.
The only thing you have to balance that with is you also need to let winners run and sell the losers quickly. But nothing is typical now and many things look weak, imo.
Im not an expert, but I've read a few things. I kinda like how you have different strategies in each "bucket", and have thought about doing the same. Instead of having each balanced/diversified, have your whole diversified.
You should have the one you expect to grow the LEAST in your 401k, because you are going to be taxed on that growth. Put the ones you expect to have HIGHEST growth in your Roth's, as that growth is tax free. Do you think your Dividend and REITs will out grow your SP500? Maybe you have it the way I described, but it seems your Dividend would be your least??? IDK just something to think about.
One big difference is that in my 401k and Roth 401k, I only have a limited amount of investments choices and they are all expensive except the S&P 500 Index. With my Roth IRA, I can invest in about anything.
That is crappy. If someone quits, do they not get the match for the year in progress?