Board 8 > Stock Topic 22

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GameStonk
02/24/21 1:37:44 PM
#402:


I really hope Moonroof is okay
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red sox 777
02/24/21 1:39:32 PM
#403:


Yeah it's odd that he hasn't posted here in a couple days. I really hope he didn't get stopped loss out at 95 cents or something.

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DoomTheGyarados
02/24/21 1:40:38 PM
#404:


He did say he was going to be swamped with work.

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Lopen
02/24/21 2:00:12 PM
#405:


He should have invested in a multinational billion dollar oil company instead of a lowly uranium mine

Currently got a 5 bagger+ going here

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CoolCly
02/24/21 2:04:51 PM
#406:


I really hate the idea of using your emergency fund to cover a margin call. The most likely time to need to do that is in a steep market decline - which is a time when you can't liquidate market holdings without locking in losses if you need cash to support yourself IRL if something bad is happening like you've lost your job (which can very naturally be correlated with a steep market decline).

Putting extra money you have on hand into the stock market during a decline isn't a bad idea because it's a good time to get some discounts, but being *required* to do it for a margin call at a time when might need that cash for something else is dangerous. The cash flow is going the wrong way!

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Lopen
02/24/21 2:09:24 PM
#407:


CoolCly posted...
Putting extra money you have on hand into the stock market during a decline isn't a bad idea because it's a good time to get some discounts, but being *required* to do it for a margin call at a time when might need that cash for something else is dangerous. The cash flow is going the wrong way!

I mean the idea is you put the money in and don't invest it in that dire time. You withdraw that money when the market recovers and you've sold some of your assets which have bounced back to cover. You're using your emergency money for just that, an emergency.

Realistically though if you're using only 10% margin I'm skeptical even something like last March would crush you. I don't know the exact numbers but keep in mind those numbers Red Sox posted were based off of 50% margin use, not 10%. I'm pretty sure the % loss for infinity% is much much higher when you're at 10%. I've lost 20% portfolio value in one day with 10% margin use and all I got was a warning. No margin call. I've never received an actual margin call yet. I have clarified the details which is why I know they often literally call you to resolve it but yeah.

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CoolCly
02/24/21 2:14:20 PM
#408:


I'm saying that those time when the market has taken a massive dump is when you need your emergency fund for actual emergencies - like paying for mortgage/rent/food, unexpected medical bills, car repair or whatever. You can't wait for the market to recover - you'd have to wait for that to liquidate your ordinary holdings to withdraw for support either.

Imagine getting margin called in March 2020 when you've lost your job? It's not just having to use your fund to cover an amount- it's having to use it when your IRL situation is bad.

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Lopen
02/24/21 2:17:55 PM
#409:


In March 2020 unless you were in the worst possible stocks most stuff bounced back where you could reliably sell it at a small loss or break even within a week or two-- you are very unlikely to need all your emergency cash in that window, even if you did lose your job. Proper diversification will help a lot with damage control.

I mean sure if you break your leg, destroy your car, and the stock market all crashes in the same day you're going to have trouble. You'd have trouble if all that happened without 10% margin use too.

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red sox 777
02/24/21 2:32:25 PM
#410:


A lot of blue chip stocks fell literally 80-90% in March 2020. If you had a retail/travel heavy portfolio, you could have been in serious trouble. Even if you didn't actually get margin called, the experience of watching that crash would have been vastly more stressful - knowing that it does not matter that you are confident the business will survive and come back, if it falls some more tomorrow based on pure fear and deleveraging, you could be broke, even if it immediately recovers.

Like, suppose you owned UAL last year, and it lost around 75% of its value. Your 10% margin has now become 40% margin. In the middle of a pandemic with the world shut down. At this point without the margin you would see this as a great buying opportunity, but with the margin you are probably thinking about if you should sell some to bring down the risk because 40% is awfully high.

On the other side, how much extra in gains are you really getting with 10% margin? Probably not a lot in the grand scheme of things. Like if I retire with 10 million dollars vs. 11 million dollars, does it really make that big a difference to me? I don't think it's really that big a difference. For me, it's not worth the tail risk of hitting 1929/2008/2020. I mean if the rate is 3 in a century that means we'll probably hit 2 more in my lifetime.

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Lopen
02/24/21 2:34:04 PM
#411:


Like here's a fun way to use margin in an extremely safe way

Use ~10% margin now on a fairly safe stock. Blue chipper. Get 100 shares of it

Immediately sell a very slightly OTM call with those 100 shares that expires EOW. Do not reinvest the cash received from the sold call.

Repeat this process until your call is exercised. Note profits made from sold calls, set aside to not reinvest, repeat process. You'll be surprised how quickly your 10% margin use will become 5% and then become your actual cash. Like if my whole portfolio was relatively safe STOCKS not calls I'd absolutely use some margin. It is not really that scary. I'm pretty sure to reach the infinity point Red Sox said at 10% margin use on 30% maintenance you'd need a 90% loss across the board or something? Even in March that absolutely did not happen in a day.

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red sox 777
02/24/21 2:46:04 PM
#412:


Er, if you start with 10% margin and don't re-up the margin as your stocks go up then it's fairly safe because you are fairly unlikely to start off by hitting a catastrophic event. But the problem is, if it's a good idea to use 10% margin in 2021, surely it is still a good idea in 2022 and 23 and 24 and so on......so you would just keep using your profits to borrow more margin. Until you eventually will hit a crash, and then it's a question of whether your accumulated extra gains over the years are enough to offset the extra loss from the crash.

I mean, I guess you could make these decisions based on portfolio size and years left to retirement - while you're young, you can take on more risk because you have plenty of future work income as a backstop. When you're old and have a lot of assets, don't use margin because it could (even if unlikely) literally be the difference between retiring with multiple vacation homes and boats and living paycheck to paycheck on social security. And I can't imagine an extra boat or 2 is worth that risk.

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Lopen
02/24/21 2:51:14 PM
#413:


The other thing to realize is crashes to that extent don't come out of literal nowhere

Black Tuesday in 1929, The Coronavirus Crash of 2020. You saw the market being bear for a good month before it got super bad. You also saw world events that could have caused a crash. You deleverage a bit seeing a higher risk going in and you're fine.

I guess like with anything you should do some DD on market conditions before using margin, but with a low amount you'll endure fluke events like yesterday that had no particular cause or warning very easily.

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greengravy294
02/24/21 3:10:24 PM
#414:


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Lopen
02/24/21 3:11:32 PM
#415:


We up 600%+ on dis oil.

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GameStonk
02/24/21 3:26:58 PM
#416:


What is this in reference to?
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HeroicCrono
02/24/21 3:34:04 PM
#417:


GME at $68.

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Menji
02/24/21 3:34:09 PM
#418:


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Lopen
02/24/21 3:34:56 PM
#419:


British Petroleum

I was saying buy 3/5/2021 calls for it (or Jan 2023 calls if you're feeling less adventurous, company should recover nicely in the next few years) a few times around the beginning of the month based on rising oil prices, OPEC meeting, and positive UK quarantine news being likely

I had a stack of 80 3/5 $23 calls for it. Have sold down to 47 of them at the moment taking profits/removing risk at varying points.

Currently up around 600% on them and have banked 3k profit. (11k unrealized profit right now, but think $26-$30 SP by March 3rd isn't out of the question so will keep holding a lot of them)

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greengravy294
02/24/21 3:39:03 PM
#420:


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Lopen
02/24/21 3:39:53 PM
#421:


This deep into the run I would not recommend any of the short term calls as being particularly safe but if you don't mind holding a while I think the Jan 2023 $20 call has a really attractive price point still. Could see that as an easy 2x.

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red sox 777
02/24/21 3:40:55 PM
#422:


Make that $78 for GME. Trading halted for 5 minutes for volatility.

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GameStonk
02/24/21 3:41:18 PM
#423:


Lopen posted...
British Petroleum

I was saying buy 3/5/2021 calls for it (or Jan 2023 calls if you're feeling less adventurous, company should recover nicely in the next few years) a few times around the beginning of the month based on rising oil prices, OPEC meeting, and positive UK quarantine news being likely

I had a stack of 80 3/5 $23 calls for it. Have sold down to 47 of them at the moment taking profits/removing risk at varying points.

Currently up around 600% on them and have banked 3k profit. (11k unrealized profit right now, but think $26-$30 SP by March 3rd isn't out of the question so will keep holding a lot of them)
Nice man!
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Tirofog
02/24/21 3:43:27 PM
#424:


I literally sold my two shares of GME yesterday for a loss... FeelsBadMan.

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red sox 777
02/24/21 3:46:13 PM
#425:


Over $90 now.

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Tirofog
02/24/21 3:47:20 PM
#426:


AMC also spiking, up above 9 now.

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Nanis23
02/24/21 3:48:09 PM
#427:


What...what the fuck happened to GME

My one share I bought at $75 turned into a profit holy shit

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Nanis23
02/24/21 3:49:10 PM
#428:


Tirofog posted...
I literally sold my two shares of GME yesterday for a loss... FeelsBadMan.
Why would you sell two shares

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wololo
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Menji
02/24/21 3:50:22 PM
#429:


So glad I held GME. Time for 1,000!

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StartTheMachine
02/24/21 3:51:32 PM
#430:


Hot diggity dog AMC! Wish I went hard on it again, but FPVD currently had a better day % wise so glad I doubled down there for now

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masterplum
02/24/21 3:51:45 PM
#431:


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StartTheMachine
02/24/21 3:52:30 PM
#432:


Oh GME has it obliterated wow

Very nice

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Lopen
02/24/21 3:53:01 PM
#433:


https://www.nasdaq.com/market-activity/stocks/bp/dividend-history

It's actually a pretty good stock for dividend too. Annual $1.24 per share, or double that before last year (we will work back up to that dividend again I'm sure)

Side note short squeeze madness means FUBO is getting rocket fuel too so I'm happy even if I'm not gonna make anything from AMC this time

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greengravy294
02/24/21 3:55:29 PM
#434:


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StartTheMachine
02/24/21 3:56:40 PM
#435:


I take it a bunch of new people shorted GME and AMC on the way down and are paying for it now or what

Those movements didn't seem organic. I was watching AMC when it rocketed and it was mostly trading sideways before that

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red sox 777
02/24/21 3:58:06 PM
#436:


This feels like another one of those gamma squeezes we've seen several times in GME.

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GameStonk
02/24/21 4:02:10 PM
#437:


Quick @ExThaNemesis buy GME at the peak!
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masterplum
02/24/21 4:02:21 PM
#438:


Don't think this one is going to last

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masterplum
02/24/21 4:02:32 PM
#439:


GameStonk posted...
Quick @ExThaNemesis buy GME at the peak!

lmao

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masterplum
02/24/21 4:04:38 PM
#440:


Yeah, something fishy with those GME numbers. Massive amounts of buys all came in at the same time

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StartTheMachine
02/24/21 4:06:54 PM
#441:


I sold my AMC. I had 1500 shares, not too much for the positions I like to take. Been fun and more profitable to swing trade this (so far). If I got back in at 5.50 it would be different and I would have held a while

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red sox 777
02/24/21 4:07:17 PM
#442:


masterplum posted...
Yeah, something fishy with those GME numbers. Massive amounts of buys all came in at the same time

Looks like a gamma squeeze, like the other 4 or so.

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StartTheMachine
02/24/21 4:11:27 PM
#443:


I regretted not buying GME at 80 twice now

You absolue fools!

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MikeTavish
02/24/21 4:11:27 PM
#444:


Bought a bunch of AMC at $5~ a bit ago. Feeling good atm.

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red sox 777
02/24/21 4:11:30 PM
#445:


Although, I feel like this squeeze lasted longer in time than any of the other gamma squeezes. Also the only one to run into the end of the trading day and now we are over $120 in after hours. Almost makes me wonder if this is the long-awaited true short squeeze.

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StartTheMachine
02/24/21 4:17:12 PM
#446:


Lol just made a grand off GME I had my fun

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StartTheMachine
02/24/21 4:18:51 PM
#447:


You've still been holding shares this whole time red sox? Got an exit plan for this madness?

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red sox 777
02/24/21 4:19:39 PM
#448:


Okay, so I do feel quite a bit of regret about (1) not doubling my position when it was below $40, and (2) selling too many shares earlier on the way up today compared to later on the ramp. I still like the ramp idea, but it would have been better if I had sold less shares earlier and more shares later. Also, I should have held onto more shares haha. I guess hindsight is perfect.

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Nanis23
02/24/21 4:22:39 PM
#449:


I admit I don't know how Gamma Squeeze work
Is this some sort of a short squeeze? why would it squeeze so soon?

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red sox 777
02/24/21 4:25:25 PM
#450:


The plan is to be more willing to buy the dips and sell the surges in the future. Psychologically, this is comfortable because I do not have very much money left in GME and even a 100% loss from here would still leave me with a nice profit on GME from before. If I were being totally objective I might buy back in for much more money, but I really don't want to risk more of my winnings lol.

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Colegreen_c12
02/24/21 4:26:38 PM
#451:


Nanis23 posted...
I admit I don't know how Gamma Squeeze work
Is this some sort of a short squeeze? why would it squeeze so soon?

I think i described it a few topics ago but basically it has to do with people selling naked calls. The further OTM they are the more likely you will see naked ones. A gamma squeeze is when a stock price spikes hard and people that are short those naked calls now need to buy actual shares so they can honor their short position. This buying raises the price more causing more people buying shares to cover their short positions.

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