Drive BY trading... URGENT HELP

[trademonkey]

Ok first of all let me explain something. I desperately want to start investing some of my liquid cash that i have been previously squandering on useless things in something constructive. I want to get into this trade and will be looking for a mentor in the near future.

However i have a burning question as of right now that i need answered so as to give me a leg up on this path.
I know there is a touch of wrecklessness involved in this hypothetical but please feel free to throw caution aside as i am in a very confident position.

LEts assume that i know for sure that the stock price for company X is going to go down, by a minimum of 3 dollars in the next 3 months or (even tomorrow) What would be the best way for me to exploit this situation for maximum profit. (Please assume for certain that the stock price decrease is a given)
Also, i have a maximum of only 17k set aside for this particular example.
Please advise on the best method.

Ps..Put options have been mentioned to me by a friend, supposing the stock is currently at $45, this would require me to risk 17k for a very small profit. (unless i misunderstood him.)

Please help.

And while you are at it, is there any broker who provides practice trade accounts that can recommend?

thanks in advance

[brownsfan019]

	Quote:	trademonkey
	Ok first of all let me explain something. I desperately want to start investing some of my liquid cash that i have been previously squandering on useless things in something constructive. I want to get into this trade and will be looking for a mentor in the near future. However i have a burning question as of right now that i need answered so as to give me a leg up on this path. I know there is a touch of wrecklessness involved in this hypothetical but please feel free to throw caution aside as i am in a very confident position. LEts assume that i know for sure that the stock price for company X is going to go down, by a minimum of 3 dollars in the next 3 months or (even tomorrow) What would be the best way for me to exploit this situation for maximum profit. (Please assume for certain that the stock price decrease is a given) Also, i have a maximum of only 17k set aside for this particular example. Please advise on the best method. Ps..Put options have been mentioned to me by a friend, supposing the stock is currently at $45, this would require me to risk 17k for a very small profit. (unless i misunderstood him.) Please help. And while you are at it, is there any broker who provides practice trade accounts that can recommend? thanks in advance

monkey - I don't actively trade stocks anymore but the most bang for your buck is in options in my opinion. Now there's a million different ways to make a play using options so you'll have to read up on what is best for your scenario. Buying puts is a quick and easy way where your risk is limited and potential gain is unlimited (in theory). But, just buying puts is not always the best play either.

[trademonkey]

	Quote:	brownsfan019
	monkey - I don't actively trade stocks anymore but the most bang for your buck is in options in my opinion. Now there's a million different ways to make a play using options so you'll have to read up on what is best for your scenario. Buying puts is a quick and easy way where your risk is limited and potential gain is unlimited (in theory). But, just buying puts is not always the best play either.

I am not looking to make a safe play in any shape way or form. The 17k i am looking to use here is not an amount i would sweat if i lost all of it.

I am just looking for one of the million ways to make a play on that situation
and increase my current 17k and get the maximum return on the play possible.

Please tell me one of the ways..(lets do away with the puts for now)

[Sparrow]

If you know in which way the price will go in a single stock with a high probability, the way to make the most is of course with high leverage.
Options are great for that, also limiting your loss.
Another thing you could look at are CFDs, the problem with them though is that most CFD brokers are bucket shops and not playing fair. And even if you find a good broker, you still might make more money with options.

[trademonkey]

Are you guys saying that the only way a person can profit from knowing the future rise or drop of a stock is through options?

Come on people, there have to be other ways to profit from such knowledge.
With options, the most profit i calculate comes to about $1000. Not exactly the kind of return i am looking for here.

please help out...

[brownsfan019]

	Quote:	trademonkey
	Are you guys saying that the only way a person can profit from knowing the future rise or drop of a stock is through options? Come on people, there have to be other ways to profit from such knowledge. With options, the most profit i calculate comes to about $1000. Not exactly the kind of return i am looking for here. please help out...

Monkey - however you are calculating that, it is WRONG.

If you just buy a put or call and it moves like you say it is, the profit is unlimited theoretically.

I suggest some more studying on your end before making these posts. It's obvious you want something for nothing and to be honest, not many here are going to want to step up to help out.

Why don't you start by telling us what stock(s) you just know are going to move and why. Maybe that will spur some discussion.

If you just want a free lunch, try yahoo message boards.

[MrPaul]

	Quote:	trademonkey
	Are you guys saying that the only way a person can profit from knowing the future rise or drop of a stock is through options? Come on people, there have to be other ways to profit from such knowledge. With options, the most profit i calculate comes to about $1000. Not exactly the kind of return i am looking for here. please help out...

Trademonkey,

How are you calculating this hypothetical profit? How are you so sure a stock price is going to drop?

What kind of return are you looking for? Unfortunately in the world of finance reward is proportionate to risk.

To reiterate what everyone else has said, options are your best course of action if you want leverage. Sorry if you were looking for some other answer.

Also, what stock is it? Perhaps someone could offer more advice if we had more details to look over.

[Anonymous]

First the legal stuff: If this post is ever used in an SEC investigation, I, as writer of this post have no personal knowledge of the thread starter or the company involved. I offer a strategy based on a hypothetical presented in the first post.

No, I kid. Or do I?

Sounds fishy to me. But if your premise is true, why not just sell the stock short? With options there would be the issue of time decay and Volatility. I am not an options guy, so I could be wrong here. But in a sure thing situation that you present I would think the most bang for your buck is to just sell at the current market price and watch the price go down 3 dollars. Along the ride down, add to the position. Normally, I would not recommend adding on by more than the original buy, but rather reverse pyramiding- adding on be less and less each time you add on. Yet, since this is such a SURE THING (unlike everything else in the market ) just keep adding on by as much as you can.

[trademonkey]

	Quote:	brownsfan019
	Monkey - however you are calculating that, it is WRONG. If you just buy a put or call and it moves like you say it is, the profit is unlimited theoretically. I suggest some more studying on your end before making these posts. It's obvious you want something for nothing and to be honest, not many here are going to want to step up to help out. Why don't you start by telling us what stock(s) you just know are going to move and why. Maybe that will spur some discussion. If you just want a free lunch, try yahoo message boards.

I have figured as much. Many want to hold their cards close to the chest and not divulge the truth without being able to benefit of course. Standard way the american capitalism system operates. Everybody wants something for something.

Thank you for the little help you have provided.

May i suggest one thing in the future. If given a free chance to win the lottery, take it no matter the odds.Its free and you dont have to lose anything other than picking your ticket.

A little advice here would have cost you nothing, and at the same time could have helped you in reverse.

thanks all for you help...

[trademonkey]

	Quote:	PivotProfiler
	First the legal stuff: If this post is ever used in an SEC investigation, I, as writer of this post have no personal knowledge of the thread starter or the company involved. I offer a strategy based on a hypothetical presented in the first post. No, I kid. Or do I? Sounds fishy to me. But if your premise is true, why not just sell the stock short? With options there would be the issue of time decay and Volatility. I am not an options guy, so I could be wrong here. But in a sure thing situation that you present I would think the most bang for your buck is to just sell at the current market price and watch the price go down 3 dollars. Along the ride down, add to the position. Normally, I would not recommend adding on by more than the original buy, but rather reverse pyramiding- adding on be less and less each time you add on. Yet, since this is such a SURE THING (unlike everything else in the market ) just keep adding on by as much as you can.

smart cookie this one...

thanks all for your help