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Hobbies outside of Cars


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carjunky
Enthusiast

Mar 23, 2005, 9:36 AM

Post #1 of 9 (3040 views)
Hobbies outside of Cars Sign In

Hi I know we all either enjoy cars but I'd like to know what other hobbies people have that come here.

I personal like to look at different ways to buy real estate or buy stocks. Even though both markets are very hard to predict these days.

I was looking into this buying stocks with options but need to learn some more about it before i drop any money into it.

Does anyone understand how this works?


Tom Greenleaf
Ultimate Carjunky / Moderator
Tom Greenleaf profile image

Mar 23, 2005, 3:00 PM

Post #2 of 9 (3036 views)
Re: Hobbies outside of Cars Sign In

Cool Off Topic Stuff. It could be a book. Options are generally "Puts" or "Calls" done in units of 100 shares. Puts are insurance against loss, and calls can make you money but can also ruin a real winner stock. Fun stuff, as you should know it's all white collar gambling! Be well,



carjunky
Enthusiast

Mar 23, 2005, 3:06 PM

Post #3 of 9 (3034 views)
Re: Hobbies outside of Cars Sign In

Funny you should mention it.. Someone needs to be 21 to gamble in a casino, yet any one could gamble on the stock market, which lately it seems to be... just a gamble.


Tom Greenleaf
Ultimate Carjunky / Moderator
Tom Greenleaf profile image

Mar 23, 2005, 6:23 PM

Post #4 of 9 (3032 views)
Re: Hobbies outside of Cars Sign In

What really get me is the "Brokers" aptly named??... as they make bucks whether you win or lose! They don't DO gambling.Smile Fun to chat, hope nobody gets hurt with this stuff,



carjunky
Enthusiast

Mar 24, 2005, 6:43 AM

Post #5 of 9 (3029 views)
Re: Hobbies outside of Cars Sign In

True..

My confusion with options is that if I buy an option for stock "abc" to expire in 3 months. so 1 option is for 100 shares.

And todays price is $1.00 so I buy the options at a value of $1. <hoping the stock rises> and say in three months that stock is now worth $3.00 and I want to exercise my option, could I actually buy the stock or is options trading just trading the option to buy or sell?

So i would be able to see my option to someone else?


Tom Greenleaf
Ultimate Carjunky / Moderator
Tom Greenleaf profile image

Mar 24, 2005, 9:16 AM

Post #6 of 9 (3027 views)
Re: Hobbies outside of Cars Sign In

If you bought an option to buy a $1 dollar stock, for let's say $1.50 for 90 days you might pay 10 cents. If the seller bought the stock for $1 and you just paid them 10 cents they just made 10%. If that stock goes way up to $3 you have to pay $1.5 for the stock - the agreement was for that price and you just made some money. If the stock goes down you could still buy it but it would be a loss, and you agreed to pay $1.5, the broker gets trading fees no matter what happens.

The prices for puts and calls is constantly changing. It depends on the amount of time and the particular stock. This is going on by the millions of shares all the time.

In the example above, the seller (lets say they paid $1 for the stock) got $1.60 for their stock and you got a $3 stock for the $1.6 if you bought it and made $1.40 per share in that example.

Just to be funny - you both made money. Allan Greenspan raises interest rates because too many people have too much money which can cause inflation and you pay tax on the gain and your adjustable rate mortgage goes up! Smile - it's gambling no matter what they might say.



carjunky
Enthusiast

Mar 24, 2005, 9:58 AM

Post #7 of 9 (3025 views)
Re: Hobbies outside of Cars Sign In

So actually Tom you would pay for the option, and when the stock went up to the 3.00 you would actually buy the stock from the seller, so you would need to pay $160.00 for the 100 shares in the option ( + some broker fees), which would now be worth $300.

So could you then turn around and sell the stock at the $3.00 a share on the market for your $140.00 profit?


Tom Greenleaf
Ultimate Carjunky / Moderator
Tom Greenleaf profile image

Mar 24, 2005, 1:05 PM

Post #8 of 9 (3024 views)
Re: Hobbies outside of Cars Sign In

That's correct! If you are real cleaver, you sell an option on the shares for $4 lets say you can get a dime, now your cost is back to $150. At the same time you might be able to pay 5 cents for a "put" that forces someone to buy them for $2.50 - that's like insurance. If it dropped back to a dollar a share you still get the 2.50. If you catch that loop hole that may only last minutes (on the options market) before someone change the deal you are just about assured of a profit no matter what happens to the stock price. I actually know someone who has found those and using 100,000 bucks made some serious money but you have to watch like a hawk to catch one of these.

Now - If you really want to test your testicular fortitude, you can borrow on margin up to 50% of your portfolio and keep on buying and selling. It's like "leap frog" Say you have a portfolio worth 10,000 bucks, borrow 5,000 for more stock and an option your total is now 15,000 so you can borrow another 2,500!! Head spinning yet?? Now this is all fun but if the stock values drop you have to send the money to get you back to 50%. Be prepared with a mini van and a sleeping bag because when all that happens it could be your new home!!!! Be careful if you get wound up in all this. Be well,



carjunky
Enthusiast

Mar 25, 2005, 6:34 AM

Post #9 of 9 (3023 views)
Re: Hobbies outside of Cars Sign In

Ok Now my head is spinning.

But I could see the value in options.

In stead of putting out $1000 to buy the stock at today's price. I could pay $50 for the option to buy the stock at today's value.

So if the stock does tank I only lost $50. Where if I would of bought it outright I could lose my whole $1000 which has happened once or twice :-(

And if the stock does rise make a nice profit.






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