Share tips thread (Vol 2)

[vindaloo79]

Can anyone recommend a UK platform for options trading on US shares.

I use IG for spreadbetting, it doesn’t seem to have much coverage for options.

[Burwood]

vindaloo79 said:

Can anyone recommend a UK platform for options trading on US shares.

I use IG for spreadbetting, it doesn’t seem to have much coverage for options.

IG will write you an option if you want one. However the most efficient way by far is to open a US based account. Mucho dollars in fees if UK based.

[jammy-git]

Tuna said:

g4ry13 said:

It's not about share price. The market cap is the important bit.

Rivian is valued as a $113bn company. To put that into perspective: Ford is valued at just under $77bn!

When you compare their valuation to Ford or GM it's absolute bonkers.

The problem is that Tesla has "reset expectations" for the EV space - with claims that if you're EV you're not just a car company. The new entrants are being compared to Tesla (who have a small overall market share of the automotive space) rather than Ford or Toyota (who sell orders of magnitude more cars).

I can't see it ending well, but what do I know? The biggest issue I have with Polestar is that their plans (and cars) are relatively pedestrian. I can happily believe they're going to build a solid line up with solid sales - but that doesn't justify a mad valuation. The only thing that makes me pay attention is that as part of the Geely group the SUV plans and future tech are likely to be shared with Lotus...

The problem is that the price of shares diverged from any rational basis a long time ago.

[sicasey]

Burwood said:

vindaloo79 said:

Can anyone recommend a UK platform for options trading on US shares.

I use IG for spreadbetting, it doesn’t seem to have much coverage for options.

IG will write you an option if you want one. However the most efficient way by far is to open a US based account. Mucho dollars in fees if UK based.

Are there no UK brokers offering options directly on the platform?

[Scootersp]

jammy-git said:

The problem is that the price of shares diverged from any rational basis a long time ago.

In the long run though will they transfer back to value/fundamentals? Surely they have to at some point.........

[vindaloo79]

sicasey said:

Burwood said:

vindaloo79 said:

Can anyone recommend a UK platform for options trading on US shares.

I use IG for spreadbetting, it doesn’t seem to have much coverage for options.

IG will write you an option if you want one. However the most efficient way by far is to open a US based account. Mucho dollars in fees if UK based.

Are there no UK brokers offering options directly on the platform?

I was hoping to have an account in place in time to short rivian!

Interactive broker looks about the best so far but reviews on them all are mixed

[jammy-git]

Scootersp said:

jammy-git said:

The problem is that the price of shares diverged from any rational basis a long time ago.

In the long run though will they transfer back to value/fundamentals? Surely they have to at some point.........

They only way I can see that happening is if we have one humongous recession and they are allowed to reduce back to fall in line with fundamental values. But if that happens a lot of very rich and powerful people are going to lose a lot of money. So it won't happen.

[vindaloo79]

jammy-git said:

Scootersp said:

jammy-git said:

The problem is that the price of shares diverged from any rational basis a long time ago.

In the long run though will they transfer back to value/fundamentals? Surely they have to at some point.........

They only way I can see that happening is if we have one humongous recession and they are allowed to reduce back to fall in line with fundamental values. But if that happens a lot of very rich and powerful people are going to lose a lot of money. So it won't happen.

Surely they just make money shorting back down and start again ?

[Burwood]

jammy-git said:

Scootersp said:

jammy-git said:

The problem is that the price of shares diverged from any rational basis a long time ago.

In the long run though will they transfer back to value/fundamentals? Surely they have to at some point.........

They only way I can see that happening is if we have one humongous recession and they are allowed to reduce back to fall in line with fundamental values. But if that happens a lot of very rich and powerful people are going to lose a lot of money. So it won't happen.

are you suggesting the stock market is rigged? It really isn't. Some have an advantage but it's not up to a few rich guys

[Phooey]

Burwood said:

are you suggesting the stock market is rigged?

Yes, I am

Ok maybe not ‘rigged’ but it’s (some of it) totally out of sync with value/worth/etc? I sometimes wonder if it’s best to be in boring staple blue chip stocks than these new age gambles.

[Tuna]

jammy-git said:

They only way I can see that happening is if we have one humongous recession and they are allowed to reduce back to fall in line with fundamental values. But if that happens a lot of very rich and powerful people are going to lose a lot of money. So it won't happen.

There have been predictions of a bubble for some time now, and some of the large players are apparently reducing their exposure - but as with any bubble, the question is what event triggers the pop.

Inflation will certainly test the markets, and if we see interest rates rise, then one of the prime reasons for money to have rushed into stocks will reduce or even reverse. China is still trying to stop their housing market from collapsing, and this winter is going to be a big test for the world's health policies.

At the same time, the tech darlings of the pandemic are seeing their gains wiped out as 'normality' returns, though it hasn't been commented on much as people have focussed on the ones that are still defying gravity.

Rich and powerful people will, on the whole, remain rich and powerful. The most likely to be hit are inexperienced retail investors who started to believe that everything was heading to the moon.

[Burwood]

Tuna said:

jammy-git said:

They only way I can see that happening is if we have one humongous recession and they are allowed to reduce back to fall in line with fundamental values. But if that happens a lot of very rich and powerful people are going to lose a lot of money. So it won't happen.

There have been predictions of a bubble for some time now, and some of the large players are apparently reducing their exposure - but as with any bubble, the question is what event triggers the pop.

Inflation will certainly test the markets, and if we see interest rates rise, then one of the prime reasons for money to have rushed into stocks will reduce or even reverse. China is still trying to stop their housing market from collapsing, and this winter is going to be a big test for the world's health policies.

At the same time, the tech darlings of the pandemic are seeing their gains wiped out as 'normality' returns, though it hasn't been commented on much as people have focussed on the ones that are still defying gravity.

Rich and powerful people will, on the whole, remain rich and powerful. The most likely to be hit are inexperienced retail investors who started to believe that everything was heading to the moon.

Not everything is grossly over valued. We may not see a pop either. It is an undeniable fact that prices can't keep rising unchecked. What we might see is much lower returns for an extended period. No one knows and as you say, something will come along and trigger a correction. Why? Because nervousness is high and increasing and knee jerk reactions. The media will do its best to print doom and gloom until something gives. However, don't be like the daft twit mate of mine who parked his substantial pension pot in cash 18 months ago and is waiting it out.

[millen]

Haven't looked closely at Rivian but sounds reminiscent of the dot.com bubble. So many similar companies valued on the assumption that they can each achieve world domination, while in practice only one can! Could be a successful short-term trade but how to know when to exit before it implodes?

[Burwood]

millen said:

Haven't looked closely at Rivian but sounds reminiscent of the dot.com bubble. So many similar companies valued on the assumption that they can each achieve world domination, while in practice only one can! Could be a successful short-term trade but how to know when to exit before it implodes?

Have a look today. It will demonstrate why it's a lively stock to play with

[vindaloo79]

Burwood said:

IG will write you an option if you want one. However the most efficient way by far is to open a US based account. Mucho dollars in fees if UK based.

Do you play around with options on US stock from the UK much? If so which broker do you use ?

Your username suggests you know your way around things

Looking at IG then it seems the charge would be:

"5c on US shares"

So the Stock I am looking at is an ETF and is currently around $18 dollar say, the futures for Feb/May 2022 for a BUY LONG CALL are $1.34 to $3.4p (depending on strike price and date) on https://www.optionsprofitcalculator.com/calculator...

So how much would you estimate the cost for £1k worth in fees and charges, I am new to this but it seems decent value for something that the underlying could change 5% a day on and the strike prices are 5-20% off

I'm a bit out of my depth in jargon terms but feels worth giving em a ring.

Edited by vindaloo79 on Sunday 21st November 00:04

[Condi]

You can trade options on Robinhood I think? Not sure what range of stocks they offer it on, but might be easier to open an account there for free, and then see what tradable prices they show.

Suspect they will be quite a distance from fair value though.

[vindaloo79]

Condi said:

You can trade options on Robinhood I think? Not sure what range of stocks they offer it on, but might be easier to open an account there for free, and then see what tradable prices they show.

Suspect they will be quite a distance from fair value though.

What happened to the UK launch?
We initially planned to launch Robinhood in the UK in 2020. A lot changed in the world in the first half of 2020, and so we made the difficult decision to postpone our UK launch indefinitely in July 2020.

We know many people in the UK were excited to invest through Robinhood, and we regret that we didn’t deliver our product to UK customers in 2020.

Although our global expansion plans are on hold for now, we remain committed to opening access to financial markets for more people around the world. We look forward to the day when we can bring this mission to the UK.

[Burwood]

It depends on the volatility and how easy IG can lay off the risk. You aren’t looking at a spread bet. What you pay is the max liability with an option. You might have some Fx exposure. You can look up the rates online if it exists via Nasdaq. Google the etf..’options chain’.

[NowWatchThisDrive]

vindaloo79 said:

Do you play around with options on US stock from the UK much? If so which broker do you use ?

Your username suggests you know your way around things

Looking at IG then it seems the charge would be:

"5c on US shares"

So the Stock I am looking at is an ETF and is currently around $18 dollar say, the futures for Feb/May 2022 for a BUY LONG CALL are $1.34 to $3.4p (depending on strike price and date) on https://www.optionsprofitcalculator.com/calculator...

So how much would you estimate the cost for £1k worth in fees and charges, I am new to this but it seems decent value for something that the underlying could change 5% a day on and the strike prices are 5-20% off

I'm a bit out of my depth in jargon terms but feels worth giving em a ring.

Edited by vindaloo79 on Sunday 21st November 00:04

Interactive Brokers is also worth a look if you're in the UK and wanting to trade US listed options (or UK options for that matter, not that many people do!).

With regard to richness, as Burwood suggests it's not really about the price per se but about implied vol and where it is relative to historical/realised vol. Not sure how familiar you are as you mention jargon - there's a whole branch of maths around option pricing but you don't necessarily have to bury yourself in the maths to be able to make intuitive sense of the concepts and understand what you're doing.

If you want a book on it then John Hull's is considered the core text but it's pretty substantial and there's probably plenty of free online resources to exhaust before you start to need the depth it goes into.

In any case, if you're buying then your downside is limited to the premium. It's when you start writing them that things get interesting and you can get into a lot of trouble if you don't know what you're doing.

[vindaloo79]

Thanks both for your input I’ll take a look at the book.