Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[MagicHef]

Originally Posted by Hammock Parties

No - what is it, you set a price you'll sell a stock for 3 months in the future or something? Hope some rube comes along?

I saw AMD was down yesterday, and figured it would likely go up soon, so I bought a couple hundred options (8/21, $87) at $0.56 each. They were cheap because AMD is not likely to go up to $87 by next Friday.

AMD did go up this morning, so while it's still unlikely to get to $87 by the 21st, it's more likely than it was yesterday. I sold the options today at $0.83 each. 48% profit in one day isn't too bad. If AMD had gone down, I could have potentially lost my entire investment, but it wasn't a very high dollar amount.

[scho63]

Originally Posted by scho63

Everybody is touting gold.........SHORT IT!

[Buehler445]

Originally Posted by scho63

BAAAAHAHHAHAHAHA. I've long said gold is a commodity and is traded as such, not an investment.

But Wow. That is serious.

[ChiliConCarnage]

Originally Posted by SupDock

The impact of splitting is confusing to me. In an era where you can buy fractional shares, why does this matter? I get that the stock surged after the news, but why?

Granted, I am a set and forget investor, so I don't pay attention much.

Buying in fractions is amazing but share price does matter. Let's say Amazon is 6k/share and I have 10k. Fidelity has a great new app and is paying to transfer your account so I want to move my account. I'll end up with 1 Amazon share and 4000 dollars and a tax bill from any profits on my fractional amount. At least I wasnt a guy with 5k of Amazon who had his whole position sold off. I'd rather my amounts held in fractions stay smaller.

I don't have fractional selling so I'd rather have more shares for flexibility. If I've got 2 shares of AMZN for $6400, the only way I can take profit is selling 50% of my position. I'd much rather they 4 to 1 split and give me the option of selling a smaller slice.

Fraction selling/buying is pretty new. Even if half of US brokerages have some version, people from outside the US buy on our markets and tend to not have as great of brokerage options.

[Rain Man]

Originally Posted by ChiliConCarnage

Buying in fractions is amazing but share price does matter. Let's say Amazon is 6k/share and I have 10k. Fidelity has a great new app and is paying to transfer your account so I want to move my account. I'll end up with 1 Amazon share and 4000 dollars and a tax bill from any profits on my fractional amount. At least I wasnt a guy with 5k of Amazon who had his whole position sold off. I'd rather my amounts held in fractions stay smaller.

I don't have fractional selling so I'd rather have more shares for flexibility. If I've got 2 shares of AMZN for $6400, the only way I can take profit is selling 50% of my position. I'd much rather they 4 to 1 split and give me the option of selling a smaller slice.

Fraction selling/buying is pretty new. Even if half of US brokerages have some version, people from outside the US buy on our markets and tend to not have as great of brokerage options.

I've never thought about this before, but I wonder if share price makes a bigger difference in retirement portfolios. If I'm retired and I want to take out my appreciation for living expenses, it may be hard to do that if the stock is really expensive and I don't have a lot of shares. I'd have to sell off more than I want in order to liquidate some of it.

[SupDock]

Originally Posted by ChiliConCarnage

Buying in fractions is amazing but share price does matter. Let's say Amazon is 6k/share and I have 10k. Fidelity has a great new app and is paying to transfer your account so I want to move my account. I'll end up with 1 Amazon share and 4000 dollars and a tax bill from any profits on my fractional amount. At least I wasnt a guy with 5k of Amazon who had his whole position sold off. I'd rather my amounts held in fractions stay smaller.

I don't have fractional selling so I'd rather have more shares for flexibility. If I've got 2 shares of AMZN for $6400, the only way I can take profit is selling 50% of my position. I'd much rather they 4 to 1 split and give me the option of selling a smaller slice.

Fraction selling/buying is pretty new. Even if half of US brokerages have some version, people from outside the US buy on our markets and tend to not have as great of brokerage options.

Excellent insight. Thanks for posting it.

[MagicHef]

I'm on Robinhood, which allows fractional buying and selling, but I haven't done it yet. I feel like it would bother me owning only a fraction of a share of something.

[ChiliConCarnage]

Originally Posted by Rain Man

I've never thought about this before, but I wonder if share price makes a bigger difference in retirement portfolios. If I'm retired and I want to take out my appreciation for living expenses, it may be hard to do that if the stock is really expensive and I don't have a lot of shares. I'd have to sell off more than I want in order to liquidate some of it.

I think this stuff is way easier in a retirement account. Have a stock that's 100k/share. Sell it. Remove 50k for expenses, then buy something else in the retirement account with the leftover 50k or fractional shares for half the 100k. In a retirement account if your fractionals get liquidated during an account transfer, you just don't have that money in the market for a short period. As soon as it lands at your new brokerage you can repurchase.

[philfree]

Made back today what I lost yesterday and maybe a fraction more. I'm thinking these swings are going to be common place until the election. If in the short term Trump starts looking undefeatable the DOW will hit 30,000..

[lewdog]

Originally Posted by scho63

A stock split brings in MORE individual investors.

Sure but enough to move the stock price much?

Anyone only wanting to buy shares because they’re “cheaper” after a split doesn’t have enough capital to move a stock much.

[lewdog]

Originally Posted by ChiliConCarnage

Buying in fractions is amazing but share price does matter. Let's say Amazon is 6k/share and I have 10k. Fidelity has a great new app and is paying to transfer your account so I want to move my account. I'll end up with 1 Amazon share and 4000 dollars and a tax bill from any profits on my fractional amount. At least I wasnt a guy with 5k of Amazon who had his whole position sold off. I'd rather my amounts held in fractions stay smaller.

I don't have fractional selling so I'd rather have more shares for flexibility. If I've got 2 shares of AMZN for $6400, the only way I can take profit is selling 50% of my position. I'd much rather they 4 to 1 split and give me the option of selling a smaller slice.

Fraction selling/buying is pretty new. Even if half of US brokerages have some version, people from outside the US buy on our markets and tend to not have as great of brokerage options.

Good observation. Hadn’t thought about that.

[wutamess]

Originally Posted by lewdog

Good observation. Hadn’t thought about that.

What's so good about the observation?
I'm lost.

[lewdog]

Originally Posted by wutamess

What's so good about the observation?
I'm lost.

The ability to sell a smaller position if you have more shares after a split. I’m with TDAmeritrade and don’t have option for fraction shares.

[Stewie]

Stock splits meant A LOT about 25 years ago and before. Individual online trading started in the mid 90s in a big way and changed the industry.


It takes a while for old adages to work their way through the mindset. Kind of like changing engine oil every 3000 miles. That became obsolete in the mid 90s but people still followed that "rule" even into the 2010's.


Anyway, the reason stocks splits were a hot item back in the day is that you had to go through a broker to buy/sell. Most brokers wouldn't even answer your call if you weren't trading 100 shares. Well, if a stock was trading at $50 ($5000 investment) it would be a big chunk to buy. If it suddenly went to $25 that was a great opportunity to get in. People would buy en mass and drive the price up. Hence, a stock split meant there were going to be buyers. Not so much anymore.



It's kind of like when Berkshire bought Burlington Northern. Part of the deal was to make Berkshire shares affordable to their new railroad employees (mostly in their stock matching in retirement funds). They offered a new share of Berkshire at 1/100 (if I remember correctly) to accommodate people that didn't have thousand$ to buy a single share. It initially brought in buyers and drove up the price. It settled down and makes no difference now.

[Hog's Gone Fishin]