Board 8 > Stock Topic 22

(+) Yeah! (+)

red sox 777 posted...

If he had a stop loss between $1.18 and $1.04, it would have triggered immediately at open....at $1.04.

oof

Menji posted...

Roblox IPO set for 3/10

You have your online dating ipos and your airbnbs and your doordashes

This is what I've been waiting for

Glorious block based entertainment for the childrens. Gonna go hard on this one.

---

Read that as Redbox at first and was very perplexed

Welp feeling pretty bad for taking profits early on AMC right now. The FOMO is hard to resist. But my thesis of people losing confidence in GME and lots of that momentum transferring to AMC seems to be happening. It's getting insane volume once again. Hoping for an end of day dump to buy, but it will probably keep surging.

---

Also feeling pretty good that FPVD finally bottomed out. Who really knows with this one, but I've been watching level 2 on it a lot today and tons of whales have been buying. Lots of million+ share orders (which I can only hope are whales and not FOMO small accounts).

I bought AGAIN back under .02 though baby after making money earlier. I'm liking day trading this one. I'll look out for an end of day dump on it, but holding if that doesn't happen.

---

AMC recovering feels so good. Makes me very optimistic that in the long term my $14 entry was not a problem. It's my biggest blunder so far, but I think it'll eventually get back there, and it'll certainly get back to $11-12 which will make covered calls put me back to neutral pretty easily I think if I choose to do that.

(by eventually I mean in the very long term of normalcy coming back to movie theatres, not necessarily in the next few months... but you never know in these volatile market times)

---

StartTheMachine posted...

Also feeling pretty good that FPVD finally bottomed out. Who really knows with this one, but I've been watching level 2 on it a lot today and tons of whales have been buying. Lots of million+ share orders (which I can only hope are whales and not FOMO small accounts).

I bought AGAIN back under .02 though baby after making money earlier. I'm liking day trading this one. I'll look out for an end of day dump on it, but holding if that doesn't happen.

Man it's down a lot right now but the 3month chart shows us we are on the other side of a bell curve. are you really confident this BIGT thing is going somewhere and that this isn't just the end of a pump and dump?

---

pvdg still holding strong today despite all the craziness. Just sayin...

---

CoolCly posted...

Man it's down a lot right now but the 3month chart shows us we are on the other side of a bell curve. are you really confident this BIGT thing is going somewhere and that this isn't just the end of a pump and dump?

I am not confident at all! This is my lowest conviction/riskiest play I'm playing with some of my huge ENZC wins, hoping to find the next one of those early. I do like their CEO a lot, I do like that Cathie Wood follows him and BigToken on Twitter, I do like the potential here and the app already having millions of users. But it's a very high risk high reward trade. That said, I think we see .10 again soon but who the hell knows.

https://www.stck.pro/news/FPVD/11201722

Hoping this turns things around for the stock short term.


---

I didn't sell anything today

---

AVCTW still holding up is astounding to me, especially since it's not the discord. Collectively, we know the discord own(ed) about 30% of all available warrants, but almost everyone sold except the biggest whale (who owns an insane 3 million warrants). Even though most of us there are super bulls, we're convinced it's overbought from the Atlas mention and the Casey Research buy recommendation. The other biggest whale sold then bought back half his position at 1 because it won't drop lol.

I still refuse to FOMO and hope it drops by the week's end. At least volume is getting lower every day, though it's still nuts.

---

Workhorse lol

---

What on earth happened with Workhorse though

---

On the edge of my seat to see if Moonroof put on DNN limits

I for one believe in Moonroof!

---

I wonder what happened too lopen

---

https://www.barrons.com/articles/workhorse-stock-gets-crushed-as-usps-drops-a-bombshell-51614117075

---

Metal_DK posted...

pvdg still holding strong today despite all the craziness. Just sayin...

Thank you for this recommendation!

---

GME's CFO has resigned. I think that's bullish - best if the old management team leaves so that this company can achieve its turnaround.

---

Also eagerly awaiting the Moonroof update.

---

F5

---

Also, today (and the last week) is a good lesson on the dangers of margin. Imagine getting a margin call at the bottom this morning and being forced to sell, only to watch your stocks rebound 10-15% within an hour. Probably happened to more than a few people this morning!

---

Yep, Margin just never ever makes sense to me. I think taking debt normally to invest in stocks is a very bad idea, but using margin for it is just inconceivably bad. It has the downside of debt of owing somebody and paying interest, and being in bad shape if things go down, and adding the fact that if it goes down it'll just immediately be sold with the difference taken from your other assets.... the decision making of whether to hold for a recovery is completely taken away from you.

I wonder if there's a good reason people use it other than "well it's right there and provided by the broker so I'll just go ahead and use it". I guess basing it off of existing collateral could prevent people from taking debt they can never ever actually pay back with their regular income.

---

Well here's the thing.

1. Most brokers will give you some sort of warning before a margin call if it's not a super tank like today (and even if it is like today if you're using sufficiently low amounts of margin you shouldn't be margin called), letting you figure things out yourself on a reasonable schedule
2. I can't speak for every broker but if you get a hardcore MUST GO NOW margin call E-Trade at least will literally call you to get decisions on the assets to sell. I assume this is probably standard.

So I mean margin is a bit risky but if used responsibly the risk is much lower. You're given much more power than you probably should be given if you don't self regulate (they allow you to borrow much more than they probably should, and let you put it into more risky things than they probably should), but if you're taking small amounts relative to your portfolio there's a lot more upside than risk.

---

I think if you exclude sudden sharp drops like today margin probably does not cost EV. Actually, it would probably be +EV in the sense that I very much doubt your margin interest rate would be higher than the long-run stock market rate of return (9%). The problem is that sudden sharp drops like today where it literally reverses within an hour can cause devastation from price movement that may not even get noticed otherwise (because it's reversed by the time you've checked the stock price). Getting a call from them isn't helpful if you don't have any more money to deposit (if you did, one might wonder.....why didn't you use that money to buy stock in the first place instead of borrowing?). Choosing which stocks to sell is more helpful but still not too helpful if many of your stocks decline at once.

The problem, and what costs EV, is that sudden severe drops like this morning are not uncommon, and appear to almost be designed for taking out stop loss orders and margin calls and then reversing. It doesn't have to be by design - that is the "invisible hand" of the free market, and the immediate trigger is probably that other people's stop losses and margin calls are hitting, causing a cascading downward movement until they are exhausted.

---

Well like I said you can mitigate the risk of events like today mattering by simply not using a lot of margin relative to your portfolio size. If your portfolio size is 25k without margin and you're only using like 3k of margin you're not likely to get a margin call even after something like today unless you picked the absolute hardest hit stocks. I used the 1k free margin on Robinhood for most of while I was using it (and for most of when I was using robinhood that was a non-negligible amount of my portfolio and never once got a margin call and I had some rather nasty days-- I did get get a warning a couple of times but yeah.

Now the problem with margin is the broker will usually let you match your investment in margin by default, with that being adjusted by maintenance (a risk value associated with each stock). And then if you maintain a good margin there is a good faith modifier of sorts that lets you borrow even more.

So a 25k portfolio could in theory get 25k of margin loaned to them or even more if they get that good faith up. Realistically they'd probably get closer to 10-15k due to maintenance rules, but that's still much much too high. If you keep your borrowed margin down to closer to like 10% of your portfolio in my experience it seems pretty unlikely to actually trigger a margin call, and if your portfolio is sufficiently large even a low value like 10% that can matter. Like even for me, I can get like 4k of margin lending with that rule of thumb and that would be enough to grab like 100 shares of FUBO for passive income every week, which is nice, and way over the interest I'd pay on that!

(I actually can't, because my portfolio is almost all calls now, which have 100% maintenance meaning I can't tap into margin, but you know)

---

Yeah, if you are only using a margin loan of 10% of assets that's probably pretty safe. But, it's also not going to juice your returns all that much. And, a Great Depression level event would still wipe you out (if you invested in a Dow Jones index fund with a 10% margin position in September 1929 and broker didn't force sell your positions until you had no equity left in the game, at the bottom in July 1932, after including margin interest, you'd be completely wiped out). Then you'd miss out on the 765x return the DJIA has generated since then.

For a slightly better return in the event the 100-year catastrophe event doesn't hit, it's not worth the stress IMO. I mean it may possibly be worth it now while the amount I have invested is small compared to the amount I expect to earn from work in the future, but once that ratio gets higher? Not worth it.

---

i have a margin account so i don't get free wheel ride violations and for extreme cases (like if the market tanked i would prob use it to buy a little until i can pay it off with my job income

---

Chris Camillo of Dumb Money was 100% leveraged on margin because dude is an absolute lunatic with ambitions of being the next Warren Buffet and...he was down 5 mil on market open today (last I remember his portfolio was 30 million+ so that's quite a dump). But his portfolio was diversified enough that he just sold some of his huge winners and trimmed his margin down significantly. Nonetheless, 100% margin is fucking insane to me. Of course, I haven't been investing for 20 years like he has.

Yeah, you can use it responsibly but even then it's a bit too nerve wracking for my taste and I've always sold gains with it very quick. My only recent use was buying IEA on some margin on one of the dips. Think I bought at 18 and sold around 22. I've maybe used it like 3 times ever and always small percentages of it, always on dips of companies I'm comfortable going long on. Mainly have the margin account so I don't have to wait for funds to settle.

One thing I don't like is you can only buy margin when your cash position is completely exhausted, no? Like on TD, it only automatically transfers a buy to margin buying after you've exhausted free cash. When I had 30k free cash I think I had like 90k available margin to buy, but it would only start dipping into margin if I made a single order over 30k and the rest would automatically buy on margin. There's no "buy on margin" option or anything. So...how do people own a bunch of stocks on margin? It's only after you've successfully made one margin investment and are holding positive returns that then you can make more margin investments, basically?

---

oh and there was that GNUS yolo when I bought on margin and didn't even know it! those were the days

---

The margin probably applies to the whole account. So that's why you can sell winners so that you can maintain margin requirements on losers.

---

With 50% Margin, 30% Maintenance Requirement (assuming that you have suddenly declined to the % loss point, and enough stocks are liquidated to bring you back within the 30% margin maintenance requirement):

% Loss | % Gain Needed to Recover
10% | 11%
15% | 18%
20% | 25%
25% | 33%
30% | 50%
35% | 100%
40% | 200%
45% | 500%
50% | Infiniti

Notice that up through 25%, everything is normal. After that it balloons out to infiniti really fast as margin calls hit.

---

red sox 777 posted...

With 50% Margin, 30% Maintenance Requirement (assuming that you have suddenly declined to the % loss point, and enough stocks are liquidated to bring you back within the 30% margin maintenance requirement):

% Loss | % Gain Needed to Recover
10% | 11%
15% | 18%
20% | 25%
25% | 33%
30% | 50%
35% | 100%
40% | 200%
45% | 500%
50% | Infiniti

Oof yeah, who needs that stress in their life. I'm with Cole here, I would only ever use substantial margin on blue chip stocks if they crash and get silly cheap again. And even then, not until the recovery has already started, because you're never going to perfectly buy the dip.

With the Fed pumping the market and the vaccines being distributed, who knows if we ever get a real crash like last time. I'm optimistic that we will so I can buy cheap, but who knows! Would crypto or Tesla imploding drag the whole market down for a while? I'm not sure. More likely scenario is some event we don't see coming. Some strain of Covid being worse than ever before or something. And it would probably just be a flash crash, so I'd ride it out if I was holding anything and average down.

I am getting somewhat paranoid that some of my under the radar stocks aren't as immune to a market crash as I thought they were after this last week though. Maybe only AVCT has true invulnerability.

---

Edit: I think the calculation was a little more complicated than I realized. I forgot to account for the fact that after the deleveraging, the margin loan is lower. New calculations (it's not as bad as before, but still pretty bad):

% Loss | % Gain Needed to Recover
10% | 11%
15% | 18%
20% | 25%
25% | 33%
30% | 45%
35% | 70%
40% | 120%
45% | 270%
50% | Infiniti

---

I wouldn't count on another crash of this magnitude for another decade at least. It was 12 years between the last two.

---

CaptainOfCrush posted...

I wouldn't count on another crash of this magnitude for another decade at least. It was 12 years between the last two.

Everybody was so damn hungry to buy this morning, makes me feel good we're going to see some green days soon once again.

---

red sox 777 posted...

And, a Great Depression level event would still wipe you out

Not really. If you have cash equal to the margin you're using, which is completely reasonable for such a small amount of margin used, you can just deposit cash to be a stopgap while your assets recover

Also for all but the worst catastrophes if you're properly diversified you should have some asset that doesn't drop all that much. Like assuming I'd been margin called today I could have easily just sold some of my BP or BTI or DIS which didn't drop much.

---

Lopen posted...

Not really. If you have cash equal to the margin you're using, which is completely reasonable for such a small amount of margin used, you can just deposit cash to be a stopgap while your assets recover

Also for all but the worst catastrophes if you're properly diversified you should have some asset that doesn't drop all that much. Like assuming I'd been margin called today I could have easily just sold some of my BP or BTI or DIS which didn't drop much.

I'm sort of confused. If you have cash, why pay margin interest instead of using it in the first place? Keeping the cash in a bank account and paying interest for the margin loan seems strictly worse.

---

After the last few days if anialation I keep expecting my $500 gain so far for the day to suddenly tank

---

Oh yeah everything is green. I'm up 8k. Closed yesterday -6k so this makes up for one bloodbath so far. 15 grand more to go to get back to 125k.

---

I guess I am going to have to get used to these hourly 10% fluctuations with DNN, huh

oh ya go my AMC

---

This seems like a great time to get into WING, especially since the ship has sailed (relatively speaking) on a lot of other restaurant stocks.

This message is brought to you by Rick Ross. RUH! BAWSE!

---

AMC calendar spreads are insane value right now

---

I honestly might load up on as many AMC calendar spreads I can buy

Sell March 5th $9
Buy March 19th $9

Getting them for $25 a pop with the March 5ths going for $1.05

---

Lets go baby

---

red sox 777 posted...

I'm sort of confused. If you have cash, why pay margin interest instead of using it in the first place? Keeping the cash in a bank account and paying interest for the margin loan seems strictly worse.

Cash from your checking account you'd use for your bills, cash in the form of a loan you get spur of the moment

Cash doesn't mean just sitting on something in a savings account.

I guess if the question is "put literally 100% of your liquid worth into the stock market and then 10% margin on top of that" yeah that's not necessarily smart but I'd say the problem there is you putting 100% of your liquid worth into the stock market to begin with as much as danger of your 10% margin call eating you alive. You should always have some sort of emergency line to tap that isn't a stock in case you're in a position where you don't want to sell anything when you need some money

---

GME back over $50!

---

Lopen posted...

Cash from your checking account you'd use for your bills, cash in the form of a loan you get spur of the moment

Cash doesn't mean just sitting on something in a savings account.

I guess if the question is "put literally 100% of your liquid worth into the stock market and then 10% margin on top of that" yeah that's not necessarily smart but I'd say the problem there is you putting 100% of your liquid worth into the stock market to begin with as much as danger of your 10% margin call eating you alive. You should always have some sort of emergency line to tap that isn't a stock in case you're in a position where you don't want to sell anything when you need some money

It seems like 90% invested + 10% margin is pretty similar to 100% invested with no margin. Provided you are planning to use that last bit of cash to cover margin calls, it's basically the same except that you are also paying interest.

I mean I agree that it's probably a good idea to have some allocation for cash.

---

Well I dunno I just think you're going to have a little cash on hand and you're not necessarily going to want it directly sitting in a portfolio either. Like just naturally. And if you don't you can get a front on a paycheck, have a buddy front you a few hundred bucks.

Also keep in mind that with a very small amount of margin used you can recover it through sales of any stock that didn't dip very much. Which will probably happen. You can also sell calls to get capital.

Again I must stress that I don't use margin but the actual functional risk from it is very low if you're using a small amount-- that's all I'm saying.

---