Drive BY trading... URGENT HELP

[trademonkey 10]

Ok first of all let me explain something. I desperately want to start investing some of my liquid cash that i have been previously squandering on useless things in something constructive. I want to get into this trade and will be looking for a mentor in the near future.

 

However i have a burning question as of right now that i need answered so as to give me a leg up on this path.

I know there is a touch of wrecklessness involved in this hypothetical but please feel free to throw caution aside as i am in a very confident position.

 

LEts assume that i know for sure that the stock price for company X is going to go down, by a minimum of 3 dollars in the next 3 months or (even tomorrow) What would be the best way for me to exploit this situation for maximum profit. (Please assume for certain that the stock price decrease is a given)

Also, i have a maximum of only 17k set aside for this particular example.

Please advise on the best method.

 

Ps..Put options have been mentioned to me by a friend, supposing the stock is currently at $45, this would require me to risk 17k for a very small profit. (unless i misunderstood him.)

 

Please help.

 

And while you are at it, is there any broker who provides practice trade accounts that can recommend?

 

thanks in advance:):)

[brownsfan019 17]

Ok first of all let me explain something. I desperately want to start investing some of my liquid cash that i have been previously squandering on useless things in something constructive. I want to get into this trade and will be looking for a mentor in the near future.

 

However i have a burning question as of right now that i need answered so as to give me a leg up on this path.

I know there is a touch of wrecklessness involved in this hypothetical but please feel free to throw caution aside as i am in a very confident position.

 

LEts assume that i know for sure that the stock price for company X is going to go down, by a minimum of 3 dollars in the next 3 months or (even tomorrow) What would be the best way for me to exploit this situation for maximum profit. (Please assume for certain that the stock price decrease is a given)

Also, i have a maximum of only 17k set aside for this particular example.

Please advise on the best method.

 

Ps..Put options have been mentioned to me by a friend, supposing the stock is currently at $45, this would require me to risk 17k for a very small profit. (unless i misunderstood him.)

 

Please help.

 

And while you are at it, is there any broker who provides practice trade accounts that can recommend?

 

thanks in advance:):)

 

monkey - I don't actively trade stocks anymore but the most bang for your buck is in options in my opinion. Now there's a million different ways to make a play using options so you'll have to read up on what is best for your scenario. Buying puts is a quick and easy way where your risk is limited and potential gain is unlimited (in theory). But, just buying puts is not always the best play either.

[trademonkey 10]

monkey - I don't actively trade stocks anymore but the most bang for your buck is in options in my opinion. Now there's a million different ways to make a play using options so you'll have to read up on what is best for your scenario. Buying puts is a quick and easy way where your risk is limited and potential gain is unlimited (in theory). But, just buying puts is not always the best play either.

 

 

I am not looking to make a safe play in any shape way or form. The 17k i am looking to use here is not an amount i would sweat if i lost all of it.

 

I am just looking for one of the million ways to make a play on that situation

and increase my current 17k and get the maximum return on the play possible.

 

Please tell me one of the ways..(lets do away with the puts for now)

[Sparrow 10]

If you know in which way the price will go in a single stock with a high probability, the way to make the most is of course with high leverage.

Options are great for that, also limiting your loss.

Another thing you could look at are CFDs, the problem with them though is that most CFD brokers are bucket shops and not playing fair. And even if you find a good broker, you still might make more money with options.

[trademonkey 10]

Are you guys saying that the only way a person can profit from knowing the future rise or drop of a stock is through options?

 

Come on people, there have to be other ways to profit from such knowledge.

With options, the most profit i calculate comes to about $1000. Not exactly the kind of return i am looking for here.:(

 

please help out...

[brownsfan019 17]

Are you guys saying that the only way a person can profit from knowing the future rise or drop of a stock is through options?

 

Come on people, there have to be other ways to profit from such knowledge.

With options, the most profit i calculate comes to about $1000. Not exactly the kind of return i am looking for here.:(

 

please help out...

 

Monkey - however you are calculating that, it is WRONG.

 

If you just buy a put or call and it moves like you say it is, the profit is unlimited theoretically.

 

I suggest some more studying on your end before making these posts. It's obvious you want something for nothing and to be honest, not many here are going to want to step up to help out.

 

Why don't you start by telling us what stock(s) you just know are going to move and why. Maybe that will spur some discussion.

 

If you just want a free lunch, try yahoo message boards.

[MrPaul 10]

Are you guys saying that the only way a person can profit from knowing the future rise or drop of a stock is through options?

 

Come on people, there have to be other ways to profit from such knowledge.

With options, the most profit i calculate comes to about $1000. Not exactly the kind of return i am looking for here.:(

 

please help out...

 

Trademonkey,

 

How are you calculating this hypothetical profit? How are you so sure a stock price is going to drop?

 

What kind of return are you looking for? Unfortunately in the world of finance reward is proportionate to risk.

 

To reiterate what everyone else has said, options are your best course of action if you want leverage. Sorry if you were looking for some other answer.

 

Also, what stock is it? Perhaps someone could offer more advice if we had more details to look over.

[Anonymous 11]

First the legal stuff: If this post is ever used in an SEC investigation, I, as writer of this post have no personal knowledge of the thread starter or the company involved. I offer a strategy based on a hypothetical presented in the first post.

 

No, I kid. Or do I?

 

Sounds fishy to me. But if your premise is true, why not just sell the stock short? With options there would be the issue of time decay and Volatility. I am not an options guy, so I could be wrong here. But in a sure thing situation that you present I would think the most bang for your buck is to just sell at the current market price and watch the price go down 3 dollars. Along the ride down, add to the position. Normally, I would not recommend adding on by more than the original buy, but rather reverse pyramiding- adding on be less and less each time you add on. Yet, since this is such a SURE THING (unlike everything else in the market ) just keep adding on by as much as you can.

[trademonkey 10]

Monkey - however you are calculating that, it is WRONG.

 

If you just buy a put or call and it moves like you say it is, the profit is unlimited theoretically.

 

I suggest some more studying on your end before making these posts. It's obvious you want something for nothing and to be honest, not many here are going to want to step up to help out.

 

Why don't you start by telling us what stock(s) you just know are going to move and why. Maybe that will spur some discussion.

 

If you just want a free lunch, try yahoo message boards.

 

 

I have figured as much. Many want to hold their cards close to the chest and not divulge the truth without being able to benefit of course. Standard way the american capitalism system operates. Everybody wants something for something.

 

Thank you for the little help you have provided.

 

May i suggest one thing in the future. If given a free chance to win the lottery, take it no matter the odds.Its free and you dont have to lose anything other than picking your ticket.

 

A little advice here would have cost you nothing, and at the same time could have helped you in reverse.

 

thanks all for you help...

 

:cool:

[trademonkey 10]

First the legal stuff: If this post is ever used in an SEC investigation, I, as writer of this post have no personal knowledge of the thread starter or the company involved. I offer a strategy based on a hypothetical presented in the first post.

 

No, I kid. Or do I?

 

Sounds fishy to me. But if your premise is true, why not just sell the stock short? With options there would be the issue of time decay and Volatility. I am not an options guy, so I could be wrong here. But in a sure thing situation that you present I would think the most bang for your buck is to just sell at the current market price and watch the price go down 3 dollars. Along the ride down, add to the position. Normally, I would not recommend adding on by more than the original buy, but rather reverse pyramiding- adding on be less and less each time you add on. Yet, since this is such a SURE THING (unlike everything else in the market ) just keep adding on by as much as you can.

 

smart cookie this one...

 

thanks all for your help:):)

[brownsfan019 17]

I have figured as much. Many want to hold their cards close to the chest and not divulge the truth without being able to benefit of course. Standard way the american capitalism system operates. Everybody wants something for something.

 

Thank you for the little help you have provided.

 

May i suggest one thing in the future. If given a free chance to win the lottery, take it no matter the odds.Its free and you dont have to lose anything other than picking your ticket.

 

A little advice here would have cost you nothing, and at the same time could have helped you in reverse.

 

thanks all for you help...

 

:cool:

 

Yo Monkey - we've all told you options are the way to go. W/o knowing what the underlying is, THERE IS NOTHING ELSE WE CAN DO FOR YOU.

 

So, if you want something, maybe you need to offer something in return as well.... Perhaps taking your own advice could work here. Food for thought.

 

Good luck in your endeavor b/c as PP alluded to, this sounds incredibly shady and if you are telling the truth, odds are you are trading on inside information which of course is an illegal activity. If you want to stay off the radar of the SEC and any insider trading activities, maybe now is a good time to divulge what your stock is and what the trade setup is. If you cannot tell by now, I am making sure to say insider trading throughout this post so when the SEC webcrawlers go all over the internet, this post may hit their servers since we may have an insider trading case here.

 

 

Good luck and I hope you are not trying to commit insider trading and break any well-known SEC insider trading laws.

[brownsfan019 17]

... and just in case you are not aware of what insider trading is, here is a link directly to the SEC website that deals with insider trading - http://www.sec.gov/answers/insider.htm'>http://www.sec.gov/answers/insider.htm

 

-----------------------------

 

Here's the text of the link in case your web browser will not direct you there:

 

 

Insider Trading

 

"Insider trading" is a term that most investors have heard and usually associate with illegal conduct. But the term actually includes both legal and illegal conduct. The legal version is when corporate insidersâ€â€officers, directors, and employeesâ€â€buy and sell stock in their own companies. When corporate insiders trade in their own securities, they must report their trades to the SEC. For more information about this type of insider trading and the reports insiders must file, please read "Forms 3, 4, 5" in our Fast Answers databank.

 

Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include "tipping" such information, securities trading by the person "tipped," and securities trading by those who misappropriate such information.

 

Examples of insider trading cases that have been brought by the SEC are cases against:

 

* Corporate officers, directors, and employees who traded the corporation's securities after learning of significant, confidential corporate developments;

 

* Friends, business associates, family members, and other "tippees" of such officers, directors, and employees, who traded the securities after receiving such information;

 

* Employees of law, banking, brokerage and printing firms who were given such information to provide services to the corporation whose securities they traded;

 

* Government employees who learned of such information because of their employment by the government; and

 

* Other persons who misappropriated, and took advantage of, confidential information from their employers.

 

Because insider trading undermines investor confidence in the fairness and integrity of the securities markets, the SEC has treated the detection and prosecution of insider trading violations as one of its enforcement priorities.

 

The SEC adopted new Rules 10b5-1 and 10b5-2 to resolve two insider trading issues where the courts have disagreed. Rule 10b5-1 provides that a person trades on the basis of material nonpublic information if a trader is "aware" of the material nonpublic information when making the purchase or sale. The rule also sets forth several affirmative defenses or exceptions to liability. The rule permits persons to trade in certain specified circumstances where it is clear that the information they are aware of is not a factor in the decision to trade, such as pursuant to a pre-existing plan, contract, or instruction that was made in good faith.

 

Rule 10b5-2 clarifies how the misappropriation theory applies to certain non-business relationships. This rule provides that a person receiving confidential information under circumstances specified in the rule would owe a duty of trust or confidence and thus could be liable under the misappropriation theory.

 

For more information about insider trading, please read Insider Tradingâ€â€A U.S. Perspective, a speech by staff of the SEC.

http://www.sec.gov/answers/insider.htm

[trademonkey 10]

Actually its not insider trading and i am doing nothing illegal.

 

If i were, i wouldnt post on a public forum.

 

 

Regarding the advice i gave you..(the reverse wouldnt have worked since i actually have something of value to lose)

 

But fear not. Everything has been ironed out and to each his own..:o:o:o

[trademonkey 10]

Ps... i highly doubt those sec webcrawlers go out hunting for the term "inside trading"

 

 

People dont make posts about buying wacky tabacky if they are actually going do it..(I wonder who the DEa webcrawlers fare with a word like "weed")