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Online trading services?

Discussion in 'Financial Cents' started by melbo, Jun 3, 2007.

  1. melbo

    melbo Hunter Gatherer Administrator Founding Member

    Anyone here use anything?

    I took a look at www.scottrade.com and https://us.etrade.com/e/t/home
    Looking for realtime quotes and trades executed within a minute of being placed.

  2. TnAndy

    TnAndy Senior Member Founding Member

    I use Etrade.....get real time quotes and 30 second confirmation of most trades ( as long as they trade on a major exchange.....things like OTC and Pink Sheets, where the market may be very small, not included ). Not sure what level of account you have to have to get real time quotes, and 9.99 trade.....I'm thinking it's 50k total all accounts......

    I did some trading back in the late 90's, and lost about as much as I gained....or maybe came ahead a little.....I did buy my tractor out of the proceeds of one stock I got in on at 3.50, rode to 18 when I sold, and it went on to about 25, then crashed and burned to nothing ! I'd pretty much decided it is a rigged game, and in many ways, STILL feel that way....about like a casino designed to separate you from your money.

    That said, I've been playing two oil deals this spring, thinking we were going into Iran, and the price of crude would skyrocket temporarily and a good profit to be made if it did so.

    One is USO.....an exchanged traded fund ( EFT ) that is a like a mutal fund, but trades like a stock. A 'normal' mutal fund only figures the NAV ( net assest value ) once a day, after the market close. You buy at the last calculated NAV from market close to market open....once the market opens, you can't buy again until the next NAV is calculated ( you can put in an order, say at 11 am, but you won't know the price until close of market today )

    EFT's trade like stocks.....their price will move up and down during the day based on the underlying asset.....say gold, for example.....as the price of gold moves up and down during the day, so does a gold EFT.....in the case of gold, and silver, the price of the EFT will mirror fairly close to the price of gold or silver, less expenses of the fund......

    For example, let's look at SLV.....the Barclay's silver fund.


    Looking at it TODAY, you see the price per share of the fund is about 136.38.
    In theory, by owning 1 share of the fund, they have set aside 10 ounces of silver for that share. I say "in theory" because some folks argue, and may be quite right, that they may NOT actually HAVE the silver sitting there....that the whole game is paper....I don't know, I don't play silver or gold EFTs, but merely use this as an example of EFTs.

    The high today was 137.....the low was 135.39.......and closed at 136.38, down .62 from yesterday's close. And if you look at the Kitco box up top in this forum, you see silver had a high of 13.82/oz, and a low of 13.56/oz....so you see the fund runs fairly close with silver ( times 10 ounces of course ).....should the price of silver rocket to 25/oz, a share in this fund ought to follow to about 245-247 range, or so.

    The 'advantage' of this type of fund, or really ANY EFT, is that you don't have to take physical possession of the asset. OF COURSE, the downside is, as my ole buddy Ponce used to say, "IF you don't hold it, you don't own it"....which means you are playing a paper game, and have the chance to get a screwing in the end.

    BUT as long as paper fiat DOES rule, you have the chance to make more of that fiat playing these funds.

    HOW ?

    OK, look at an EFT with some volatility.....like SLV....you see average volume traded everyday is 420,000......and the swing between high and low today is FRN 1.61 ( 137 high subtract 135.39 low ).....say you watch this fund for several weeks or months, and you see the average swing ( you can get the historical prices from Yahoo on SLV ....I actually like the Yahoo site better ) is 1 buck or more each day.....if you owned, say 250 shares, and can catch the swing for about 50 cents during the day or over the next day, you could pick up 125 bucks ( less commissions, Etrade, that's 20 bucks total for me ), or little over 100 bucks....do it 5 days a week, and you pick up 500 bucks/wk....problem is, you tie up 135 bucks/share times 250 shares or about 34,000 to play in this poker game......so it actually DOES take money to make money....

    Now let's look at another EFT.....USO.....United States Oil.


    I got interested in this one back in the winter.....ya'll remember back when gas was under 2 bucks/gallon ??? Well, it turns out USO, which is loosely based on the price of West Texas Intermediate Crude oil ( WTIC ) was at a 52 wk low back in January......we'd come off some Middle East scares, and the effects of Katrina were winding down.....and crude fell. USO hit a bottom of around 42 bucks/share sometime in mid January when WTIC hit a low of about just under 50 bucks/barrel.

    BUT I was looking forward......figuring we had a good chance of an Iran attack, summer driving season coming up, and since last year wasn't too bad a hurricane year, chances were THIS year could be......all of which could spike oil to 70-80 bucks/barrel on the LOW end, and God-only-knows on the upper end IF we attack Iran and they close the Persian Gulf to oil shipping.....it could easily spike over a 100/barrel.

    SO, I stared studying USO pretty close. One thing I found was the average volume was 3-4 million shares a day....this is a BIG fund, played by MAJOR institutional players.....and the average swing on the price was a shade over a buck/day ( downloaded a year's worth of prices from Yahoo into Excel and averaged ) .....AND the price was a lot lower than SLV, with WAY more potential for an explosion. Believe me, even though I'm sorta day trading in and out of this EFT, I NEVER go into the weekend without 500 shares or so in case Bush and Company decide one Saturday morning is the day to bomb the crap out of Iran, and the Monday morning open would find USO up 30 bucks a share before I could even get an order in !

    So, what I do is, the days I have time to sit at the computer, is try to pick up 30-40 cents a share on 1000 shares......about 50k of play money. Some days, I won't buy at all.....some days, I'll buy in and sell out twice in a day....sometimes I hold a couple days, but rarely longer. My goal was too see if I could beat a 5% CD rate I had the money in at the bank.....first month, I made 3.5%....next month it was a little over 2......so IF I continue to average over 2% per month, that works out to 24% or so a year......beats the bank all to pcs. Let ya'll know next March how it worked out.....AND should we get a major hurricane or Middle East flare up, THIS is one fund to be in during that time......

    OK....next oil play.....assuming you don't want to day trade on something like this.

    Check out BP Prudhoe Bay Royalty Trust (BPT)


    This is an oil trust simply for income that beats the pants off bank CDs.

    Shares in this trust get you a percentage of the oil revenue out of Prudhoe Bay...it's averaged 13% over the last few years. You get a dividend paid each quarter PLUS if the price of crude DOES skyrocket, you can make out like a bandit by selling your shares if you want.

    Example.....I bought 750 shares two months ago at 65 bucks/share. Share price is running about 68ish right now, and has been as high as 91 in the last year ( when crude spiked )......plus you're gonna get about 2 bucks a share or so ( estimate is 2.10 this quarter ) income which works out to 2/65 =3% for the quarter, or about 12+% for the year. Not a bad little income producer with the potential to make a pile IF crude spikes, or just even goes up and up and up gradually. Let's say we get another major Gulf hurricane, and crude jumps from the current mid-60 level to the mid 80's.....and BPT jumps 20 bucks/share.....heck, I'd sell mine, pick up 15k plus the dividend of 1500 bucks in July, and maybe wait on the Oct one as well depending on the date of the storm for another 1500 bucks, and pocket 18k by Halloween....a respectable 37% gain for 6 months. I'd bank that in Etrade bank, at 5.05%... and wait for the price to fall again as crude came down....probably Jan/Feb......and start the game over again.

    That's my game plan with online stuff.....of course, you understand ALL of the above is merely for entertainment purposes only.....This is NOT financial or investment advice, I am NOT a financial adviser or a registered representative ......Should you decide to ACTUALLY invest any money, do your own due diligence because the market WILL take you to the cleaners if you are not very very careful.......and sometimes even if you ARE very very careful.
  3. melbo

    melbo Hunter Gatherer Administrator Founding Member

    Wow. I need to read this a couple more times.
    Good info! You get a banana.

    I'm wanting to play with a few 'hurricane stocks' Doom and gloom stuff like USO. THe 4 or 5 I'm looking at are all penny stocks and most of them run a very regular pattern starting now till the winter. Many have been 4 and 5 baggers the past 3 years. Yep, even last year when we had no real activity.

    Kinda fun to be able to buy 2 million shares of BUGS for $20,000 @ .01 a share. This one tends to go to .03-.05 every year.

    More later
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