Beta Chasing

Questions about risk at BBs has come to the forefront again following JPMorgan's CIO hiccup, but what about risk management when trading your own cash?

At the moment, I'm only investing what I can afford to lose (just under $600) and have been putting it in fairly volatile stocks (pink sheets in particular) looking to see what sort of gains I can get. It could be up 200% or bust in a matter of hours, but I dont mind as I have set aside that much to lose; if I was putting my whole savings account to work it would be a very different story.

I'm interested to see how much risk other monkeys take on in their retail accounts?

Comments (6)

Jun 22, 2012

out of the money calls, 6-12 mo expiration

Jun 22, 2012

I was willing to lose it all.. and did

Last summer during the debt crisis fiasco I took a huge gamble. I forgot the S&P level, but the DOW was down 400 points. My boss was like "if this doesn't rebound im cashing my 401k". 10 minutes before market close he sells everything. I decide to scoop up some SPY monthly calls expecting at least a 0.5% bounce or so, then I was going to take profits ASAP. Nopeeeeeeeeee. Next day the bottom fell out and my account blew up =x

It's a trade I'm willing to do 9 times out of 10 though. With small accounts you're forced into risky positions to make up for getting raped by commissions

Jun 23, 2012
WSOWill:

I was willing to lose it all.. and did

Last summer during the debt crisis fiasco I took a huge gamble. I forgot the S&P level, but the DOW was down 400 points. My boss was like "if this doesn't rebound im cashing my 401k". 10 minutes before market close he sells everything. I decide to scoop up some SPY monthly calls expecting at least a 0.5% bounce or so, then I was going to take profits ASAP. Nopeeeeeeeeee. Next day the bottom fell out and my account blew up =x

It's a trade I'm willing to do 9 times out of 10 though. With small accounts you're forced into risky positions to make up for getting raped by commissions

I think buying calls/puts to make a play like that is stupid if you only have that limited amount of money.

I would much rather buy/sell tiny put/call spreads that collects theta.

Jun 22, 2012

Long-term down & out calls / up & out puts (with barrier at strike), and I get in when the stock is around 5% away from the barrier

=> volatility doesn't come too much into play
=> ultra leverage
=> very short term trade, a day or two... sometimes a matter of hours

It's just to make up for the fees and... seriously, it's way too boring to buy 10 stocks at $20 and see that it you made 5%... or $10

Jun 22, 2012

Trade apple weeklies - Straight ca$h homie

Jun 24, 2012
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