If it walks like a duck and quacks like a duck you might as well call it Cramer. An .80 contract means $80 per contract not including the commission. A $10 commission min means are 25% in the hole without having to deal with the spread. So you have to buy multiple contracts to lower your disadvantage. Then there is the ugly spreads when you are outside the money and then there is the depreciation sitting through one expiry after another. I think he honesty felt it would trade like a stock.
Best options strategies I've seen are straddles just before earnings. You pick a low float stock with a high short & preferably and buy straddles (equal calls & puts) on it. If you get a rally or a tank you win either way. You sell the winner and hold the loser expecting a reversal and the euphoria dies out. If you get enough volatility for the stock to swing you in on both sides you sell both and you are doubly victorious. There is still risk involved as the stock could not move on earnings and you now have to risk depreciation expecting either move to occur.
You can even straddle potential breakout of a trading range. If it fails the breakout you win on one side if it breaks you win on the other. The leverage from the winner should offset the capital invested on the losing side.
Sometimes diversification is good for the simple reason that it keeps you from overtrading an equity. lol, its a stretch but I guess if you buy into 50-100 stocks by the time you come back around to the first one you traded it should be up. Hey maybe I should patent and sell that trading plan. ;-)
IHub is a motley sort; it’s filled with gamblers not winners, gamblers. I doubt the majority of people here have more that 20k to 50k to trade with. I could be just a few thousand left. That is why the penny stock boards are the hot and heavy volume for posts. If people could really make money in the market they could do it with larger capitalization stocks for smaller percentage gains. I'm catching myself before I go off on the rant of people selling concepts and agendas here.
In his defense though. the problem I see is he's covering waaaay to many trades, real or not. Ah but see this is where most newletters and IHub posters get their claims to fame. If you post one stock for the week you run the risk of it falling flat. But if you post 20 or 30 you can go back in 2-3 weeks and then point to your winning picks and the percentages they return. Lebid does this all the time and many of the newsletter services. Even Cramers pulls a recap to show his winners but quickly fades the losers.
Is he doing this? I don’t know. I still think he jumps on a bandwagon pick a side and screams at it until it moves his way. Precther did that in the 80s. Screamed a market top all the way to 2000. I figured out that the markets are built for Cramers but mostly for Kudlows. Buy, buy, buy. If you just keep buying stocks mostly dividend issuing kinds over the course of 30-50 years you will out perform any savings plan. When the market goes up buy a little, when it goes down buy a boat load, when it is flat… ummm just buy. Dividends pay regardless if the stock is up or down, most stocks recover in time and like an ADOT if you buy 10k shares at .03 then pick up 1mil at .0005 and you will get averaged down enough to where .001 will look good on the balance sheet. ;-) Good luck by the way.
I ran a quasi buy and hold simulation a while back that buys on breaks under short term moving averages but holding above longer ones with a sell after a 40% gain with sold profits getting reinvested on the next buy signal. It is quite profitable on the trades it makes but a lot of capital is very much tied up in market tops. There is no stop loss on the simulation because I found that the stop loss hurt it tremendously regardless of the percentage that would trigger it. Even a trailing stop loss was bad. In most markets it seems that buying going up and buying going down was the most profitable system by far. At least the most reliable. The simulation was run against the Dow 30 and the NAS 100 components.
So markets are predominately bullish, and who can blame them when you have dividend reinvestments, employee matching on 401ks bimonthly with every paycheck, even allotment into bonds and anyone and everyone trying to daytrade or short the markets without knowing what they are doing. The money in the 60s and 70s was not made in short term trading or timing the markets but just buying everything that was down before the economic cycle turned up and resolved the secular bear. Most traders lost their shirts back then as bulls and bears fought over which way the market went with the net result being that the bears were slaughtered come 1982.
It’s good to be bearish as far as being cautious and keeping aware of tell tale warning signs but to start looking for even the weakest signals as a telltale sign of turning points goes too far.
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