Trading and time

Discussion in 'Options' started by matt5555, Sep 24, 2003.

  1. matt5555


    I have an intresting question. On August 15th I bought 80 30 Strike Yahoo calls. I paid a $1.35 premium, and the stock was trading at $29.88. Fast forward to September 23. I do not have $240,000 so I sold the calls for $7.20 each. I ended up with around $55,000.

    Keep in mind this was my first options trade. I bought a book on them and thought about trading them back in the summer of 2000 but never did anything.

    I turned 18 a week before and had just opened my own account (my other account is a custodial account with my father). Either way, I now sit here with $55,000 as well as this which I mention below:

    I bought 60 JNJ Strike 50 calls on August 30th for $0.65. I sold them 9/10 for $2.15 each. In this account I have 15,000 now (I had more cash other than what I paid for the calls.

    I now have two accounts with different brokers, one with over $50k and the other with $15k.

    I forgot to mention that I am 18, and a high school senior. At any rate I find that other positions I enter (which I have a few I did not mention) I do not have the time to get in and out at the best points. Those two trades I mentioned were before the school year started.

    What do I do? I have a laptop and I have unlimited data through Verizon wireless (144k/second). That enables me to watch positions during any free time I have but I always miss the opening and I am usually around for the closing.

    Next year I will be going to college which means probably less time for trading. Right now I am sitting on some LEH calls and it's a bit unsettling having positions when I can not babysit them.

    Any ideas what to do?
  2. Take your profits and run.
  3. quit school ?

    just kidding :D
  4. matt5555


    Problem is, I don't have a "system" per say and I don't know what would keep me from going broke which is why I wouldn't do that. At a minimum I am going to finish high school (obviously) and receive my diploma. However, should I take a year off before I go to college?

    I see time as money, and time going buy is missed opportunities.

    However, I doubt I could do this. One, my parents do not even know I am trading again. I had a little stunt back in 2000 (before all of the freeloading and daytrading rules) and traded that whole summer. What happened? I overtraded and ended up losing it all.

    I spent two years saving and earning money. Last summer I interned (and was paid) at a local trading firm.

    Now my parents see the statements again (one of my brokers sends confirmations after each trade) and they are questioning. I perfer to keep quiet about this just for the heck of it.

    I mentioned before I don't have a system. I hate to say it, but that Yahoo trade was pure luck. The day before I had my wisdom teeth removed and for some reason I was on the computer the next day and I loaded up on those YHOO calls. The markets started going up and I had to fight the urge to sell them as they doubled, and kept going up.

    The JNJ trade was a bit more informed. It looked oversold, it appeared to be consoliding and some indictators were very bullish.

    Since I could keep an eye on it I watched it along with a few others. One morning I was watching the quotes of the calls and considered entering in a bid for $.60. I did, but then canceled it a minute later. I then saw an ask of $.65 for 400 and I took it. I had a few weeks left, those were damn cheap.

    Maybe I have a little bit of a system, I can't say. Either way with the news coming up with regard to the stents when JNJ was at 52 and change and reaching heavy resistance I unloaded since I didn't expect the news from BSX to be good for JNJ (and was right).
  5. Congratulations on your windfall.

    Pay your tuition bill. Buy a nice, thoughtful gift for your parents.
    Depending on which region of the country you live in, consider buying yourself a small condo to live in while you go to school, and telling your 'rents you want to be on your own (financially, at least)

    Read 'Education of a Speculator', and after you get all excited about trading yen barefooted, google some articles on the demise of niederhoffer's fund.

    You will be very lucky indeed if swinging giant portions of your account around like that doesn't ruin you soon.

    Best Regards and Buena Suerte,

  6. ''quit school'' was a joke.

    you seem to have some knowledge and potential for being a highschool kid.

    i would say go to college and just learn and learn and learn about the markets while youre in college. then when you graduate with a degree you can decide for yourself if trading is what you want to do. if it is try it and see what happens. plus you will have a degree to fall back on.
    (wish i would have done exactly that)

    college will teach you nothing about trading ...... so dont think taking a finance class or something will. you will have to learn by just reading books or websites. this website has lots of valuable info. see that search ''button'' in the upper right hand corner ?? use it , it does the trick, or just post on here.

    whatever you do good luck (you have lots of time)
  7. Bluedog


    Cherish every penny! They don't always come that easy!!

  8. matt5555


    Yes, I know it was a joke, of course I thought about delaying once or twice, although each time I come to the conclusion that it is not the best idea.

    The funny thing is that I intend to major in Civil / Environmental Engineering. I may change my mind and go with a business program however after working at the place I did this summer I discovered that hardly any of the traders majored in business/finance. Some were bio majors, others engineering, and a few econ majors.

    This firm at least trains their employees when they come to work (they have a "trader" course) It doesn't seem to help much because most of their trades lost money and if you (personally) wanted to make money just take the other side of one of their trades :)

    At any rate it seems to be an advantage not to take business courses (or at least not major in that area) as the firm you work would rather teach their way to you when they hire you (from what I have heard speaking with many people).
  9. matt5555


    No, they don't. I've had many losing trades and in the beginning my losing trades would be much larger than my gaining trades (where I would risk too much for such a little gain).

    I need to develop a system.
  10. kserra


    I experienced a similar situation to you in while still in high school. At the time I was about to graduate I had been working and had a lot of money left over from school, not really knowing what to do with it I bought several hundred shares of a small company at about two dollars, about a year later the company was bought out and I got out for about 18 bucks a share. Needless to say I was exstatic, but instead of becoming a trader I looked for more ways to invest. I figured if it was that easy the first time why wouldn't it be the second time.

    Anyways I ended going long, in mid 2000, a lot of shares in AMD and in INTEL, the rest is history, but I still have a rather large chunk of change left over. I did not really know what to do so I just held on to these shares until earlier this year when i liquidated all positions in the hopes of becoming a trader.

    I started getting really interested in the idea of swing trading after reading dave landry's book and began to formulate ideas for a system. I came up with one based on stochastics (big mistake) and made a little and lost a little but ended up pretty much in the same position I was in before. I learned a lot about myself and about how I like to trade just from those several months of trading. I learned that holding positions overnight is not for me (made me too nervous, and pissed me off to wake up to losing a profit from the day before) I also learned that stochastics (buying based on oversold overbought) is not very effective. Anyways knowing these things I am continuing my search of knowledge for a trading system that is suitable for me.

    My suggestion to you would be to take some time off. You are now dealing with more money than you have ever dealt with in your entire life, you made it easy but remember you can lose it twice as easy. I would highly recommend going to college, I have found that I have much more time to trade in college than ever before in high school. I am located on the west coast so i purposely schedule my class in the evenings so I have the mornings to watch the market. If you want to become a trader, you certainly have a nice grubstake to start with, but I would recommend trading small when/if you do start. Read a lot of books on trading until you feel you have a good grasp on it. Put away some of the money so you don't have to work in college and don't start trading again until you have a system that you have extensively backtested, paper traded and are totally comfortable with. Best of luck.
    #10     Sep 24, 2003