Anyone here trade in gold, foreign currency, penny stocks, etc..

[Arkitech]

I've always wondered if it's possible to consistently earn modest amounts of money on the market with a low risk investing strategy. I've heard people talk about doing well dealing in gold and money trading, but I'm pretty clueless about the market so I'm not really sure how that works.

Anyone here work in the market? Do you work independently or for a company?

Is the reason people lose huge amounts of money due to ignorance or greed? or both?

Can a studious person consistently beat the market and earn a modest income?

 

[Lonyo]

Probably as easy as losing 25~50 a day.

 

[Arkitech]

Originally posted by: Lonyo
Probably as easy as losing 25~50 a day.

lmao, that's really easy

 

[vi edit]

When I worked for a "prominent" stock broker, I had a couple clients that ranked in our Top 100 list. I was on the tech support side of things and they would call me for PC support.

In between reboots and downloads and what not we'd shoot the breeze. These guys were making decent side income trading QQQQ options. They had some indicators that they looked at each morning and then placed their orders around 10:00AM. They were generating around $5,000 a month in "fun" money doing this. And with only a couple minutes of actual work.

I don't know any specific details, just the general overview.

From my experience with very active traders, they tend to "pick their pony" and just flip the same stock(or option) over and over again.

 

[SZLiao214]

Originally posted by: vi_edit
When I worked for a "prominent" stock broker, I had a couple clients that ranked in our Top 100 list. I was on the tech support side of things and they would call me for PC support.

In between reboots and downloads and what not we'd shoot the breeze. These guys were making decent side income trading QQQQ options. They had some indicators that they looked at each morning and then placed their orders around 10:00AM. They were generating around $5,000 a month in "fun" money doing this. And with only a couple minutes of actual work.

I don't know any specific details, just the general overview.

From my experience with very active traders, they tend to "pick their pony" and just flip the same stock(or option) over and over again.

Don't want to hijack the thread but what did those guys do the rest of the time? In the media they are usually portrayed as people who work 12 hours a day everyday.

 

[Specop 007]

Originally posted by: vi_edit
When I worked for a "prominent" stock broker, I had a couple clients that ranked in our Top 100 list. I was on the tech support side of things and they would call me for PC support.

In between reboots and downloads and what not we'd shoot the breeze. These guys were making decent side income trading QQQQ options. They had some indicators that they looked at each morning and then placed their orders around 10:00AM. They were generating around $5,000 a month in "fun" money doing this. And with only a couple minutes of actual work.

I don't know any specific details, just the general overview.

From my experience with very active traders, they tend to "pick their pony" and just flip the same stock(or option) over and over again.

And how much money were they playing with. $5k a month is easy if your playing with $5mil.
$5k a month is a bit trickier if you start with only $10k.

 

[vi edit]

That's the interesting thing about options. All you need is the equity coverage available (cash or stock) and after that you are fronting a relatively small amount of money.

These guys were retired and had their "real" money locked away. They had enough in the acocunt to cover their equity requirments and just used this for fun money to play with.

 

[Specop 007]

Originally posted by: vi_edit
That's the interesting thing about options. All you need is the equity coverage available (cash or stock) and after that you are fronting a relatively small amount of money.

These guys were retired and had their "real" money locked away. They had enough in the acocunt to cover their equity requirments and just used this for fun money to play with.

But the question remains.
I dont mean to nitpick or be an ass, but even assuming 10% up front you could put up a "small $5k and have a whopping $50k to play with.

But I do see your point. The thing with just getting the amount earned on investment is you dont know the initial investment value. Again, assuming $2 million to play with $5k a month isnt all that good. Not bad but certainly not beating the market.

Now, if their making $5k a month off a relatively small investment of $50k or less, they doing pretty damned well!

But the same could be said of the OP too. 25-50 a day would be easily doable if you have $50k to play with. Much harder if you have $1k to play with.

 

[mugs]

Originally posted by: vi_edit
When I worked for a "prominent" stock broker, I had a couple clients that ranked in our Top 100 list. I was on the tech support side of things and they would call me for PC support.

In between reboots and downloads and what not we'd shoot the breeze. These guys were making decent side income trading QQQQ options. They had some indicators that they looked at each morning and then placed their orders around 10:00AM. They were generating around $5,000 a month in "fun" money doing this. And with only a couple minutes of actual work.

I don't know any specific details, just the general overview.

From my experience with very active traders, they tend to "pick their pony" and just flip the same stock(or option) over and over again.

Based on the way you put "prominent" in quotes... Edward Jones?

 

[vi edit]

You really have to understand how options work to really "get" the logic behind it.

"1 option lot" is worth 100 shares of the underlying stock. You buy/sell your option for a premium which is anywhere from $.05 to a couple bucks.

If the premium is $.05, then you front $5.00 + comissions for the option.
If the premium is $2.50, then you front $250 + comission for the option.

In the first example if you buy 10 contracts you front $50.00.
In the second if you buy 10 contracts you front $2500.

Equity requirements get really messing depending of you are long the option and covered or not, so it's really hard to figure that into the math.

Actual profits can vary widely too, but I'll give you a rough idea of how you can score big on options.

Say you have a really good feeling that company X is going to explode in price after their next earnings call. Right now their stock is trading at $25 a share.

You go out and buy 10 contracts at a strike price of $25 for $.50 per option. You have to front $500 + comission for them.

After the earnings call profits are all time high, and the stock shoots up to $32 a share.

You can either exercise or close out your option(which most do) based on the current price.

So your profit looks like this now: $7 a share (32 - 25) x 1000 = $7000. Take away your premium of $500 and commissions and you are looking at around $6500'ish in profits.

Not bad for a $500 fronting of cash. To make that much in standard trading you would have needed to front $25,000 (assuming you weren't buying on margin).

These guys were doing similar things but they were trading in larger lots (like 15-20) but they were talking gains only in single digit % (1%-2%) but with the leverage they had through the options it added up to decent cash.