Discussion ***Official*** 2020 Stock Market Thread

[dasherHampton]

I was talking to a guy today about trading options. He mentioned something called the "50% rule" that, according to him, pro options traders live by. It's pretty simple: They close positions as soon as the gain hits 50%. So, in simple terms, if you sell a batch options for $1000 you close the positions soon as your gain hits $500.

I had never heard of this rule. It sure seems like that leaves a lot of profit on the table but I guess it allows a trader to trade more options in a shorter amount of time.

Still seems a little strange.

 

[KB]

I just try to focus on the big picture. No matter who wins the election tomorrow, the future is green energy, electric vehicles, AI, and full self driving. And China.

Same here. I keep telling myself. No matter who wins, the sun will rise in the morning and the market will likely rise too.

 

[FelixDeCat]

And this is the reason I took no position prior to the election. Today is a short covering rally (for now) based on polls.

Tomorrow?

 

[ponyo]

Sold some Nov 20 $65 LMND covered calls. Earnings next Wednesday.

 

[dasherHampton]

Ugh I was early on selling my STX calls.

I was a little anxious about what might happen today so I sold them yesterday. What can you do?

 

[jpiniero]

Seems Wall Street is quite happy that Biden is going to win, but only barely such that the Republicans are probally going to keep the Senate.

 

[ponyo]

Market punishing all the weak hands who sold and exited the market thinking the market will crash from election uncertainty. Now the weak hands have to pray for flash crash or some type of big pullback so they can buy back in. The question is when? We're entering what's normally good period of the market with November and December generally good months with Santa Claus rally coming up. FOMO is real and people want their end of the year bonus. Have fun chasing!

 

[ultimatebob]

Speaking of dumb CNBC headlines:

Rally gains steam even with election uncertainty, Dow jumps more than 500 points

I thought that the stock market hated election uncertainty?

 

[s0me0nesmind1]

Speaking of dumb CNBC headlines:

Rally gains steam even with election uncertainty, Dow jumps more than 500 points

I thought that the stock market hated election uncertainty?

No - they actually love it. It means nothing gets done and nothing changes.

At this point the results is pretty clear regardless.

Biden is probable to win - but they won't have the senate. Status quo will go on.

 

[dullard]

I thought that the stock market hated election uncertainty?

That is true, which is why they said "even with".

For example, "Our team is now winning 'even with' a halftime point deficit".

Back to stocks: over history the market has done the very best with a Democrat president and a Republican congress.

 

[ponyo]

VIX is down 18% so anybody with puts is getting double screwed. IV crush combined with market gap up is just murdering put options.

 

[Red Squirrel]

I don't know if it's election related or not but my company stock (ESP) sure took a bit of a dive lol. It's been unstable since the pandemic though. All my other stocks that I bought myself have been doing pretty poorly since day 1 since I'm a noob at this and also can't afford to buy the bigger stocks, but the ESP is the one that I actually do make money on since the company contributes a bit too and it's a blue chip stock. Sitting at 34k right now, it was at 37k earlier. Waiting for it to hit at least like 50k before I cash in. Ideally I will probably want to wait until covid is over, hopefully in a few years.

One of my mining stocks might potentially grow too, the company was at a standstill for a while but got approval to continue forward with ore processing. That one is more long term though, like 10+ years.

 

[ponyo]

^^You're Canadian. Probably the best company on your stock exchange is Shopify (SHOP). Valuation is super rich but that's because they're killing it. SHOP is on my very short list of stock to buy if we get another crazy drop.

 

[ponyo]

Holy crap, Biogen (BIIB). Biogen is the only drug stock on my watchlist because of the potential for their Alzheimer's drug approval. Now it looks like the drug will get approved and the stock exploded higher today on the news.

https://www.cnbc.com/2020/11/04/bio...ta-to-support-approving-alzheimers-drug-.html

People with call options just won the lottery. Some of the gains on the weekly BIIB call options are what dreams are made of. 10-20x your money in minutes. Wow.

 

[jpiniero]

Market punishing all the weak hands who sold and exited the market thinking the market will crash from election uncertainty. Now the weak hands have to pray for flash crash or some type of big pullback so they can buy back in. The question is when? We're entering what's normally good period of the market with November and December generally good months with Santa Claus rally coming up. FOMO is real and people want their end of the year bonus. Have fun chasing!

GOP keeping the Senate was definitely not priced in. Facebook is up over 8% today.

 

[Red Squirrel]

^^You're Canadian. Probably the best company on your stock exchange is Shopify (SHOP). Valuation is super rich but that's because they're killing it. SHOP is on my very short list of stock to buy if we get another crazy drop.

Yeah I could not afford those stocks lol. Even one. I need to buy 100 at a time with the site I buy from so that would require a second mortgage lol. But yeah that would be a good one probably, they are huge. They are practically an American company, they're just registered here. Even their pricing is in USD. They basically target American market more than here. Lot of major websites are actually using them in the back end.

The nice thing with the corporate ESP I'm with is even though I would never be able to afford to buy my corporate shares manually, the way the ESP works is it takes a set percentage of the pay cheque and buys whatever amount of stocks it can, including fractions of stocks. Though come to think of it, I wonder if there are ways to do that with other stocks too, like some kind of investment account where I choose a certain % and it can buy fractions of stocks I choose. Probably better looking into mutual funds instead I guess, they handle all that and mix with many stocks. I will worry about that once I hit a point that I actually have enough disposable income though. Right now most of my money goes towards bills, the rest goes towards mortgage and credit line. I have $20 that goes into my stock account and once I have enough to buy stocks I can afford I buy. But right now I'm mostly just holding what I have.

 

[s0me0nesmind1]

Wouldn't mind some community thoughts on my ESPP.

So my company gives me a 15% discount on ESPP. I pay income tax on that 15% discount - because it's effectively loaded onto my paycheck.



On top of that though - what I like the most... is the price advantage. The buying of the ESPP goes in quarterly periods. So for example, 1/1/2020 - 3/31/2020 go by - and it then buys stocks based on how much I've deducted from the paycheck for those 3 months. The Pricing is the sweet spot where it takes the price of the beginning of the period (1/1/2020) and the end of the period (3/31/2020) and gives me whichever price was lower. Not bad, eh? Only one slight catch - and that is before you can sell the ESPP you have to hold it for 1 additional quarter.

Originally going into this - I was planning to sell-off immediately. But lately after re-evaluating, I'm considering holding long term. Our company is pretty stable - and has been surviving just fine during COVID. Stock price continues to climb. Dividend of roughly $1.50/share per year.

Just wondering what you fellow ATOT folks would do. Sell it off ASAP for quick pocket of gains - or hold on to it for long period of time?

 

[Brainonska511]

Wouldn't mind some community thoughts on my ESPP.

So my company gives me a 15% discount on ESPP. I pay income tax on that 15% discount - because it's effectively loaded onto my paycheck.



On top of that though - what I like the most... is the price advantage. The buying of the ESPP goes in quarterly periods. So for example, 1/1/2020 - 3/31/2020 go by - and it then buys stocks based on how much I've deducted from the paycheck for those 3 months. The Pricing is the sweet spot where it takes the price of the beginning of the period (1/1/2020) and the end of the period (3/31/2020) and gives me whichever price was lower. Not bad, eh? Only one slight catch - and that is before you can sell the ESPP you have to hold it for 1 additional quarter.

Originally going into this - I was planning to sell-off immediately. But lately after re-evaluating, I'm considering holding long term. Our company is pretty stable - and has been surviving just fine during COVID. Stock price continues to climb. Dividend of roughly $1.50/share per year.

Just wondering what you fellow ATOT folks would do. Sell it off ASAP for quick pocket of gains - or hold on to it for long period of time?

Depends how much you have in it and your risk tolerance. In my view, I'd try to sell asap. I already hold enough risk in my company by working for them. No need to carry extra risk in their stock.

If you wanted to wait, there is also a holding period that also gets you preferential tax treatment (I think 2 years, if I remember my company's ESPP correctly).

I never bothered with my company ESPP. It's only a 5% discount and the price is the average price on the last day of some arbitrary quarter. With a $40 per sale + small amount per share fee, it isn't worth the tax headache for a few bucks.

 

[s0me0nesmind1]

Depends how much you have in it and your risk tolerance. In my view, I'd try to sell asap. I already hold enough risk in my company by working for them. No need to carry extra risk in their stock.

If you wanted to wait, there is also a holding period that also gets you preferential tax treatment (I think 2 years, if I remember my company's ESPP correctly).

I never bothered with my company ESPP. It's only a 5% discount and the price is the average price on the last day of some arbitrary quarter. With a $40 per sale + small amount per share fee, it isn't worth the tax headache for a few bucks.

I have about 2 quarters worth in it now. So nothing that big. With my salary + advantages I get roughly $10k in there per quarter. Prior to that I was selling off every quarter.

I don't know of a different type of holding period for mine though for long-term other than just not selling?

Basically I've recently joined the 25% tax bracket - so holding it long term would save 10% for LTCG tax rate of 15% - but also the quarterly dividends.

 

[Red Squirrel]

Wouldn't mind some community thoughts on my ESPP.

So my company gives me a 15% discount on ESPP. I pay income tax on that 15% discount - because it's effectively loaded onto my paycheck.



On top of that though - what I like the most... is the price advantage. The buying of the ESPP goes in quarterly periods. So for example, 1/1/2020 - 3/31/2020 go by - and it then buys stocks based on how much I've deducted from the paycheck for those 3 months. The Pricing is the sweet spot where it takes the price of the beginning of the period (1/1/2020) and the end of the period (3/31/2020) and gives me whichever price was lower. Not bad, eh? Only one slight catch - and that is before you can sell the ESPP you have to hold it for 1 additional quarter.

Originally going into this - I was planning to sell-off immediately. But lately after re-evaluating, I'm considering holding long term. Our company is pretty stable - and has been surviving just fine during COVID. Stock price continues to climb. Dividend of roughly $1.50/share per year.

Just wondering what you fellow ATOT folks would do. Sell it off ASAP for quick pocket of gains - or hold on to it for long period of time?

From my understanding it's only taxed once you cash it in, though I could be wrong. I've been holding mine long term too, originally they used to open some time in January but now the way it works is each individual unit needs to be in at least 2 years before you cash in. So basically it's more like 3 years, because on the 2 year mark, the newest unit is only 1 year old. So I got used to the idea of not cashing for a while and now I've just been accumulating it. My company is stable, but so was Nortel back in the day..... so I do worry a bit about leaving it in there, but basically I try to at very least cash when they are break even, what the company gives me is a bonus and it acts as a saving account. Right now they are low, so my hope is that in a few years they go back to what they were before, that means I'm buying it low.

Also there are dividends and it's actually a half decent amount, comes up to like $300 per quarter or something like that in my case, with around 34k in stocks. (was sitting at 37k for a bit but it went down) I have mine setup to reinvest in more stocks. As long as my company does not go Nortel on me I think I will do good keeping them in there.

I'm about to buy a 65k property so I would love to be able to pay most of it with the stocks eventually.

 

[FelixDeCat]

It seems like some of us here have not only picked the winner of the election but surmised stocks will only go up from here. To this I say "LOL!!!"

Now that we have had the overconfidence rally out of the way, its time for a pull back as uncertainty will now take hold.

 

[FelixDeCat]

In other news, my Casava Sciences (SAVA) did well today. It rallied BIGLY on additional data about its Alzheimers drug.

Biogen also announced progress in Alzheimers today, which helped SAVA rally. Knowing CASAVA SCIENCES fairly well, Im pretty sure it will consolidate baring any more positive news, thus I sold the calls.

 

[s0me0nesmind1]

It seems like some of us here have not only picked the winner of the election but surmised stocks will only go up from here. To this I say "LOL!!!"

Now that we have had the overconfidence rally out of the way, its time for a pull back as uncertainty will now take hold.

Well -

The election does mean a lot of things politically.

1) Will news media cover COVID outbreaks to the same degree that they do currently?

2) Will there be as much push-back on passing stimulus now, or will it breeze through?

 

[Brainonska511]

I have about 2 quarters worth in it now. So nothing that big. With my salary + advantages I get roughly $10k in there per quarter. Prior to that I was selling off every quarter.

I don't know of a different type of holding period for mine though for long-term other than just not selling?

Basically I've recently joined the 25% tax bracket - so holding it long term would save 10% for LTCG tax rate of 15% - but also the quarterly dividends.

I think the tax issue just comes with how the capital gains and the discount get accounted for if you sell before or after holding for 2 years.

 

[s0me0nesmind1]

I think the tax issue just comes with how the capital gains and the discount get accounted for if you sell before or after holding for 2 years.

I believe since the discount isnt an asset but rather the equivalency of putting cash in my pocket - I think that accrues as income regardless of how long I hold the ESPP. Infact, I believe it will be income on my W2 and everything.

Also long term cap gains is 1 year from everything I'm aware of.