LogFAQs > #949097420

CoolCly posted...

Everything StarTheMachine was saying earlier is nonsense to me after all. LIFO? Da fuq?

LIFO is just a tax lot ID method. It stands for Last In First Out, as opposed to FIFO, First In First Out.

Whenever you make a purchase of a stock, you're always using some form of tax lots. Most brokers if not all default to FIFO, which simply means that the first shares you bought are the first that are going to be sold. So if you buy 100 shares of a company, then an additional 50, and later sell only 50, those 50 will come from the first batch of the 100 you bought.

There are more than just these two tax lots; there's low cost, high cost, loss harvester, and Ameritrade even has specific ID lots where you can go in and pick from any buy batch to sell (though strangely enough I think you can only pick this from the cost basis page AFTER you've already made the sale - but BEFORE the settlement period. You can't choose this method before you actually make the sale).

I traded for months without ever thinking about tax lots. It's been useful to me lately because I'm averaging down on these warrants I've been holding for a long time, simply waiting for news, hopefully of a big contract for this company to expand their revenue in the coming years.

Lopen posted...

Warrants are basically just dumbed down options as I understand it, as the Strike and Expiry are priced in. Robinhood doesn't support them so I don't really care to look into if there's any nuance beyond that.

Yeah, they're like super long calls with a set strike price and expiration date. AVCT warrants expire in 2025, so you're essentially speculating how a company will do over a very long period of time if you buy early. This is why they can be so lucrative if you have patience and are in on the right company.

Alternatively you can have the best of both worlds like AVCT, where it's also a low floater so the thing can explode at any news drop. AVCTW went from 30 cents to 2 dollars the morning of August 6th. This is why I don't mind holding my 50k+ warrants for like a year if it means a potential 100k trade from a news drop. I have no interest in actually exercising my warrants, only in trading them like I would any common stock.

Wish I'd expanded my research on the AVCT discord though because these guys were also discussing IEA warrants back in August, when they were trading around 20 cents. They are now stabilized around 3 dollars. A 15x gain in under 6 months. Pretty unreal.

That server is really strong

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