The Bull Responds

Lets get to the mailbag;

Anonymous Melanie said...

I know this is dumb but could you just go over like limit orders and other things like that?

- Melanie,

Market order: An order to buy or sell a stock at the current market price. This means that no matter what you will get the stock you want but you may get it at a much higher price than you originally wanted. One of the Bull's ten commandments is never use market orders.

Limit order: If a Limit Buy then you receive the stock at or below the price you entered as your limit order, if the price is above what you put in, then you do not receive the stock. If a limit sell than you only sell if the stock is at or above the price you set in for a limit sell.

Stop-Limit Order: Once the stop price is reached, the stop-limit order becomes a limit order to buy or to sell at a specified price.

Day Orders(sometimes call Duration Order): Unless you give your broker specific instructions to the contrary, orders to buy or sell a stock are "day orders," meaning they are good only during that trading day.

If there are any more Melanie, just let the Bull know.


Anonymous Rob said...

ok, what the fuck is a 130/30 strategy, i even tried to find it online but it makes no sense

Rob, this is something you will never need to know but here is the most simplistic way to understand 130/30. You find an index you like, for this we will take the SP 500, you then invest 100% into the SP 500 with shorting 30% of the stocks you think will fare worst in the SP 500, then you take the proceeds from the shorted stocks and invest them in the stocks you think will do best in the SP 500. It is more complicated than that but that is the basic understanding of it.

Anonymous Anonymous said...

what is P/E, like what does it mean, i realize its price per earnigs?

Anonymous, glad you asked this question because so many times it is used incorrectly. You hear people talk all the time how much a stock is trading compared to its earnings but what does it matter? In general, a high P/E means investors see the stock growing at a large rate in the future and a low P/E means investors see the stock not growing at all. But many times investors have it wrong. The best way to use P/E is to compare stocks within the same industry, outside of that there is little good for it for the novice trader.

Anonymous Anonymous said...

How would you trade google

Anonymous, I would get into GOOG. I think it has hit bottom. At worst take some late summer calls on it.

Anonymous Anonymous said...

how much value should i put into volatily, does it matter

Anonymous(no one likes leaving names?), not sure what you mean by volatility? If in the volume sense, it is best to buy stocks on low volume or high volume days since the stock is either usually to high or to low on those days. If you mean how to play a volatile stock I would recommend a "Long straddle" which you can see in more detail in my January post titled "ABK MBI ect".

Anonymous Anonymous said...

Bull,

Explain what the the indexes all are

Anonymous, indexes are nothing more than stock exchanges, it is where a person goes to trade a stock. Imagine a mall, on one end you might have Bloomingdales, on another Dicks Sporting Goods, both these places sell items that one pays for, Bloomindales sells upscale clothes and Dicks sells sporting goods. Well the Nasdaq sells "tech stocks" and the NYSE would be like a wallmart, a little of everything.

Anonymous Anonymous said...

whats a margin call?

Anonymous(names people names), Margin call really comes into play when one is to short a stock, you receive a margin call if one of your securities(stocks) went below a certain price level. For instance, I have 10,000 dollars in my account and I short stock A for 5,000 dollars at 100 dollars per share, but the stock goes to 500 dollars and now I owe 25,000 dollars, how do I pay that back? The broker will have a margin call on you before that happens to assure that this situation does not come up.

Anonymous Anonymous said...

I need some tech play help, is Garmin done like u said in another post or is there a shot they can come back?

Anonymous, I would be shorting Garmin.


There were also a lot of questions on option strategies. I will have a post detailing them at a future point in time.

Lets get to some picks from the Bull:

I want everyone of the Bulls disciples to be shorting PDLI. The stock is down 18% in after hours after it decided not to put itself up for sale. It is a huge mistake and I like this stock going lower. Get into March/April puts on it people. Will make you money tomorrow. I personally like the 12.50 put at 10 cent per share and the 15 dollar put at 35 cents for march 08. These will skyrocket tomorrow. Get in and Get rich.

I will give you five stocks for tomorrow later tonight.