Proposition Joe said:

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Not having the cash to deploy elsewhere is a completely separate issue.

If your reasoning for getting out of a position you feel still has room to run is so that you can free that capital up to invest elsewhere, then you are selling because you are over-invested and need capital - not because of some fabled "net free".

It's a risk management habit/strategy, but it's key to understand that doing so has likely left significant money on the table in a bull market (read: the last 4-5 years).

"going net free" a lot of the time is the same as "capping ones upside".

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How so? If the money is going to something else productive, especially something that hasn't broken out and made its move yet, I'd argue you're worse off leaving your money in the stock that already made its move. But it depends on the setups and where you are in the process. Hard to slam any strategy without knowing details.

I can assure you though.. when I go net free, its because something better is brewing or the stock is about hit its head and at the very least take a long breather. Plus, you can ALWAYS get back in.

Heineken-Ashi said:

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Proposition Joe said:

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Not having the cash to deploy elsewhere is a completely separate issue.

If your reasoning for getting out of a position you feel still has room to run is so that you can free that capital up to invest elsewhere, then you are selling because you are over-invested and need capital - not because of some fabled "net free".

It's a risk management habit/strategy, but it's key to understand that doing so has likely left significant money on the table in a bull market (read: the last 4-5 years).

"going net free" a lot of the time is the same as "capping ones upside".

---

How so? If the money is going to something else productive, especially something that hasn't broken out and made its move yet, I'd argue you're worse off leaving your money in the stock that already made its move. But it depends on the setups and where you are in the process. Hard to slam any strategy without knowing details.

I can assure you though.. when I go net free, its because something better is brewing or the stock is about hit its head and at the very least take a long breather. Plus, you can ALWAYS get back in.

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If you know a stock has "already made its move" so to speak, and you know another will soon be making its move... Then why are you not deploying 100% of your funds from one to the other? It's because there's no way truly to be certain.

Either you have enough capital to make certain future plays, or you don't. Going "net free" on something to get that capital is a bankroll issue.

Either you think the stock you correctly identified is still a good investment, or you don't. Going "net free" shouldn't impact that thought process.

It's not a slam on any kind of strategy - risk management as a whole varies from person to person. In a bull-market, "going net free" is typically going to cap your upside and leave money on the table. In a bear-market, "going net free" likely saves you money.

In short, its a mental hedge -- nothing more.

Proposition Joe said:

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Heineken-Ashi said:

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Proposition Joe said:

---

Not having the cash to deploy elsewhere is a completely separate issue.

If your reasoning for getting out of a position you feel still has room to run is so that you can free that capital up to invest elsewhere, then you are selling because you are over-invested and need capital - not because of some fabled "net free".

It's a risk management habit/strategy, but it's key to understand that doing so has likely left significant money on the table in a bull market (read: the last 4-5 years).

"going net free" a lot of the time is the same as "capping ones upside".

---

How so? If the money is going to something else productive, especially something that hasn't broken out and made its move yet, I'd argue you're worse off leaving your money in the stock that already made its move. But it depends on the setups and where you are in the process. Hard to slam any strategy without knowing details.

I can assure you though.. when I go net free, its because something better is brewing or the stock is about hit its head and at the very least take a long breather. Plus, you can ALWAYS get back in.

---

If you know a stock has "already made its move" so to speak, and you know another will soon be making its move... Then why are you not deploying 100% of your funds from one to the other? It's because there's no way truly to be certain.

Either you have enough capital to make certain future plays, or you don't. Going "net free" on something to get that capital is a bankroll issue.

Either you think the stock you correctly identified is still a good investment, or you don't. Going "net free" shouldn't impact that thought process.

It's not a slam on any kind of strategy - risk management as a whole varies from person to person. In a bull-market, "going net free" is typically going to cap your upside and leave money on the table. In a bear-market, "going net free" likely saves you money.

In short, its a mental hedge -- nothing more.

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Because nothing is a certainty? I deploy a strategy that invests into what I consider high probability setups. But that doesn't mean they always work. The goal is high reward on minimal stop risk. But I don't deploy everything even into the best setups because that's the literal opposite of risk management. Some of us have been around long enough to know that there absolutely will be times that really really bad things happen. I would never expose myself that hard.

My system is simple. I don't expose more than 4% of my account into any one play, whether options or shares. If I have a clean stop on an entry, I assess what 1%-4% (depending on confidence in the setup) of my account would be lost should I get stopped. That determines how much I buy. If that ends up using a massive chunk of cash, I downsize the entry position.

You do you. Again, I can promise you that my strategy is very successful. I bet yours is too. I just preach risk management above all else. Because the majority of this board got their **** pushed in 2022, which was a fairly benign cool off in the grand scheme.

NBIS $

The purple & yellow money board has a long running thread on it. Hopefully reading it doesn't give me the aids, but it has made me a lot of money in the last few months. Shares and buying / selling calls.

Heineken-Ashi said:

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Proposition Joe said:

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Heineken-Ashi said:

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Proposition Joe said:

---

Not having the cash to deploy elsewhere is a completely separate issue.

If your reasoning for getting out of a position you feel still has room to run is so that you can free that capital up to invest elsewhere, then you are selling because you are over-invested and need capital - not because of some fabled "net free".

It's a risk management habit/strategy, but it's key to understand that doing so has likely left significant money on the table in a bull market (read: the last 4-5 years).

"going net free" a lot of the time is the same as "capping ones upside".

---

How so? If the money is going to something else productive, especially something that hasn't broken out and made its move yet, I'd argue you're worse off leaving your money in the stock that already made its move. But it depends on the setups and where you are in the process. Hard to slam any strategy without knowing details.

I can assure you though.. when I go net free, its because something better is brewing or the stock is about hit its head and at the very least take a long breather. Plus, you can ALWAYS get back in.

---

If you know a stock has "already made its move" so to speak, and you know another will soon be making its move... Then why are you not deploying 100% of your funds from one to the other? It's because there's no way truly to be certain.

Either you have enough capital to make certain future plays, or you don't. Going "net free" on something to get that capital is a bankroll issue.

Either you think the stock you correctly identified is still a good investment, or you don't. Going "net free" shouldn't impact that thought process.

It's not a slam on any kind of strategy - risk management as a whole varies from person to person. In a bull-market, "going net free" is typically going to cap your upside and leave money on the table. In a bear-market, "going net free" likely saves you money.

In short, its a mental hedge -- nothing more.

---

Because nothing is a certainty? I deploy a strategy that invests into what I consider high probability setups. But that doesn't mean they always work. The goal is high reward on minimal stop risk. But I don't deploy everything even into the best setups because that's the literal opposite of risk management. Some of us have been around long enough to know that there absolutely will be times that really really bad things happen. I would never expose myself that hard.

My system is simple. I don't expose more than 4% of my account into any one play, whether options or shares. If I have a clean stop on an entry, I assess what 1%-4% (depending on confidence in the setup) of my account would be lost should I get stopped. That determines how much I buy. If that ends up using a massive chunk of cash, I downsize the entry position.

You do you. Again, I can promise you that my strategy is very successful. I bet yours is too. I just preach risk management above all else. Because the majority of this board got their **** pushed in 2022, which was a fairly benign cool off in the grand scheme.

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You too often take a dissection of a concept as an attack on your success rate or strategy.

Two things can be true: You could have been wildly successful the last 5 years and you could have left a lot of money on the table.

Based on your post history and risk management and the insane bull market we've been in, you likely have done both.

It's ok to say those with a higher risk tolerance have turned out to be right the last 5 years -- as I'm sure when this house of cards inevitably does collapse you'll remind us how often you "warned us". Just because someone has been "more right" than you the last 5 years doesn't mean that you haven't been extremely successful.

Got into selling covered calls because of the WWR thread. Decided to diversify a little because of the WWR thread.

On Yahoo Finance, looked at the big list of gainers for the day (on 9/26) and landed on ACHR because it was $9.70 a share and I could swing that in my learning account. Bought 100.

Sold a $10 call that expired that day (9/26) for $4 (total, not per share) to see what would happen. Didn't get called. Sweet, $4.

On Monday, sold a $11 call that expires today for $5 because that was the furthest from the current price that people were buying. It looks like it will get exercised, because it's sitting at $11.38 right now.

So I'm making $29 less than if I had just bought and sold, but it's my second week trading options and I still made $139 on the whole deal. I feel pretty ok about it.

What can I improve on?

I respectfully disagree that 10% is the right number for a stop upon entry. That can depend on a lot of factors. I am sure 10% has served you well. I would agree with you that having a plan and a thesis for each investment (anything that takes emotion and gut instinct out of the decision making) is the best approach. I also always enjoy your insights and value what you bring to this forum.

But using 10% as a general guideline may not be smart if you are long or even swing trading on that stock. You still end up having to time the market for that to work. And running away from something that drops 10% on what may be a bigger move that is going up can cost a lot of money. I am not pretending that I know better than you, but that is a brush too broad for me to accept as good advice.

I dislike stops. They have rarely served me well when doing my swing trading.

For me I manage risk by creating buy and sell ladders. If the stock keeps falling, my lower orders will catch the dip.

Granted if could fall right through all of them and keep going, but in that case the only thing to do is grit your teeth and wait for the eventual bounce.

This is the downside that I'm willing to accept and has served me in the past.

Disclaimer is I only do this with ETFs and not single stocks, with the exception of BRKU which tracks BRKB.

Big election news in Japan. More dovish monetarily policy in the works. Nikkei up 2.8%. Rat race in stocks to stay in front of inflation continues.