I don't know what to do with my life. My local organizing is in limbo and I'm not sure I want to keep doing it for several reasons. I don't have a job, lost mine when my campaign work officially ended on 12/1. I used to write code for a living but really don't want to go back into it. It's not what I want to do for a living. Also....
Capitalism is dumb. Really really stupid. I hate how there are so many people busting their butts working in Amazon warehouses or meat packing plants, or those kids mining rare metals in Africa, making scraps and actually making all of these modern Capitalist treats possible. And then there's people who are clicking a few buttons on a stock broker app and pulling in thousands of dollars just like that!
Actually working for an honest wage feels like a scam at this point. I get to be pushed around, mentally distressed (hooray Autism) and eventually stressed out to the point of burning out for whatever wage I "agree" to take (aka whatever "the market" says I'm worth). OR I can turn the trading I'm doing into a "system" and hone it to a point where I can pull in $300-500 per day making trades on the market.
I'm not even talking about a fancy trading strategy with a bunch of indicators or other nonsense. I'm just scalping SPY, buying Call or Put options at a certain point and selling them when they go up in price by 20 cents. 25 contracts x .20 profit / share / contract = $500 - $25 in broker fees = $475. In theory I could run this every day and be in and out of my trade within minutes. The full strategy has risk management rules and then the "hard part" is picking the right entry point for each trade.
I'll be running a back test on this simple plan but I know from actually doing it on a smaller scale that it works. It's so dumb how I can make (and lose) a month's rent on a single trade.
It's disgusting. On one hand I am glad I have this "gift" of hyper-focus so that I can dig into topics like day trading and figure it out. OTOH there's a lot of jealousy over people who I see out and about as "normal" and knowing I'm not going to be them. Part of me wishes I could just deal with a 9-5 job like most people and maybe empty my mind of Politics. I'd be less informed but maybe happier?
The other thing that bothers me is that Capitalism is pushing me towards this route. I'd rather be spending my time learning how to make music, mixing with the gear I have, reading some of these theory and history books that are piling up, or doing something actually good for society. However I need money to survive and after going through plenty of really bad programming jobs I guess I'd rather try to make money on my own. So here I am, becoming the financial equivalent of a river leech, sucking some blood from my host each day, and those hosts being parasites themselves, those stock prices rising from stealing the labor value of everyone possible, charging as much as possible, screwing over everyone as much as they can get away with.
Yeah, absolutely. Happy to help because if this works I want other comrades to find a way out of the rat race!
Pattern Day Trading: The rule is that if your account value is less than $25k, if you are buying and selling the same position within the same trading day you will receive a "pattern day trader flag". After a few of these (I believe 5 within a few day period) the brokers have to lock your account temporarily. It's an SEC rule and not something the brokers themselves are choosing to do. I got really lucky during the GameStop fiasco and have an account that is large enough to ignore the Pattern Day Trader rule. It's not a brag, just peace of mind knowing I can pay rent for a while and figure things out. Money = time and I'm very fortunate to have this time.
Cash needed to start: Based on how tomorrow's option chain looks right now I'll need to put down around $4800 (see image) in order to purchase 25x Calls at the $587 price point. My strategy involves buying the next dollar amount above the current price when the next dollar "out of the money" is close to becoming "in the money", then when it goes "in the money" wait for the positions to increase by at least 20 cents and place an order to sell. This is going to change day by day and is really going to depend on where SPY goes in pre-trading hours, if it is trending up or down, etc.
I've had plenty of +$100-200 days trading around $1k with this plan and I'm ready to try scaling it up.
What makes this strategy promising is SPY usually moves by .5% each day, so it fluctuates in a few dollar range. I'm not trying to hit home runs here, just make base hits as often as possible. I have to refine the risk management plan because on some days SPY will drop by a couple percent and then these daily options become worthless.
This is where people on Reddit tend to screw up! It's easy to manage winners. Worst case is you take profit and leave some extra profit on the table. Managing losing trades is a different thing entirely. There's a lot of phycological work needed to keep a cool head when the trade goes red. For starters, don't put your entire account up for trade on a daily basis! I'm trying to trade in small amounts so that if I lose a trade I'm only losing under 2% of my account's value. I'm going to increase my trade size because I need an income replacement right now but ideally I keep trades small so that I can survive a few bad days.
I'm glad you have the patience for this, because while I love most number-heavy stuff, this feels like to me it would be absolutely dismal.
It is, I tried it, I would need a lot more discipline next time. I did not beat the market.
I was hooked enough on the game that when I was closing out my accounts and getting ready to be homeless for a while I couldn't bare to sell the last couple of stonks that were going up and they've kept doing it. Now the platform won't accept my fucken ID so I can sell them and cash out if I want to. So irritating.
Anyway if you have a tendency towards risky behavior and gambling, be wary of stonks and crypto trading.
Thanks for this. It's quite easy to understand your writing.
One thing I want to understand about you wrote is what you mean when you say those "daily options become worthless." You said you would need to buy $4800 worth of calls on SPY. Combining these two statements, does that mean you could have days where you gain $100 - $200 and other days where you lose $4800?
Good question.
For me to hit my ~$500 daily gain with the amount of Calls that I want to purchase (25) I need to buy those calls for around $4800. That means, yes, potentially I could lose all of that money if I do literally nothing and sit on them until they expire. Options have expiration dates and the ones I am trading expire on the same day they are created. You'll see people talk about them as "0DTE", meaning 0 days until expiration.
However, I'm not going to do that. I'm not 100% on what the "take loss" strategy is going to be, but basically I'm going to watch the position and sell if it drops before a threshold that I'm willing to lose. In this case, say SPY goes down, I got my entry point wrong, and now my options are worth less than I paid for them. I'm going to close my position at a .40 loss, 2x my targeted gain, rather than sit on them and hope they will rebound.
Say I paid 1.97 per contract per share, so $197 per contract x 25 = $4925. SPY goes down by a couple dollars and now I'm holding contracts worth 1.57. I'll put in a Limit sell order for 1.57 and take the loss of .4 per share x 100 shares x 25 contracts = $1000 loss. Now I'm left with $3925, but I don't lose everything!
The hard part is telling that nagging part of the brain that thinks "it will turn around" to shut up. At the same time, you don't want to take a loss at, say, a 5 cent drop because there's time for that to flip around. Daytraders talk about this balance between wins and losses in terms of a Risk:Reward ratio. For me I'm comfortable with a ratio of 1:2, so my losing trades cost me double what my winning trades earn me.
The $100-200 gains came from much smaller purchases. On those days I bought 5-7 Calls for around $1000-1200 total and in some cases saw my options go up by 30 or 40 cents each. There's been days where I had such a good entry that the options went up by $1-2/share each! However, I'm not banking on those. My plan to limit risk is to put in Trailing Stop Loss orders once that 20 cent gain shows up rather than trying to get more, not selling while ahead, and losing instead. I'm trying to get in and out within a span of minutes instead of watching the charts all day and hoping that SPY keeps going up.
I saw 0DTE and was about to do a concern. You got this.
I have a homie who's got a lil money printer running crypto trades. They are not wealthy at all and I care not to judge them- we didn't ask to be born in this whack ass hierarchy and man-made jungle full of amorphous apex predators, get that bag if you can.
No op. But question for you. Why not do stop loss?
"It'll bounce. It'll bounce. It's gonna bou- ah FUCK SELL SELL SHIT FUCK SELL"
I too once tried to be a finance bro. hahahahahaha.
Yep, lots of gambler's fallacies and loss aversion to overcome. IMO the mental part of this is the hardest to learn. Otherwise it's math and probability plus a bit of timing.
Yeah it's a bit pathetic in my case, I'd hacked together a system that would let me algorithmically trade using a fee-free android app in an emulator, even just to code in basic functionality like stop losses etc.
But I got into the thrill of actively live trading instead and crashed out chasing memes and dreams.
Oh that's very interesting. Going the long way instead of using API. Robinhood had one. Not official one, but had one.
Ah yeah we didn't have robinhood access in my region so I just used a UI regression testing framework to drive the UI and added some crude data scraping. It never really reached its full potential because I went full brace beldon until I had to cut my losses and cover the costs of moving.
edit: to clarify for my government handler and the rest of you, full "brace beldon's silly trollish theories about gambling" it's a bad bit in retrospect. I didn't YPG.
I do once the position hits my profit target.
Today's trade went great. I put in a .11 trailing stop loss once my Calls were breaking $2, allowing them to keep going up and triggering a sell when they slipped. The downside is if I didn't put the stop loss on when I did, or if I picked a much wider stop, I could have made a few thousand dollars today instead of $980. But, can't predict the future and that stop loss could have easily saved me from these Calls dropping to half price!