Monday, March 30, 2009

Speculative Trade

I decided to use the remaining cash in the account to make a spec trade today by buying 3 contracts of the BAC(Bank of America) May 5 Put(BYOQE) @ .84. I have no technical reason for making this trade other than the fact that I think big banks will be trading their 52wk lows before May, hence the reason why I am saying that it is a spec trade.
Total Transaction: $267.24

Current Balance:
Note: It is not good practice to use all of the cash in your account to make trades or to over trade by using a large portion of your cash on one trade. Generally I keep 20% cash in my personal portfolio. I am using all of the available cash in this account because it is a small amount. Once I get this account near 5 - 10k, I will use a more sophisticated approach to making trades(i.e allocating a certain percentage per trade and keep 20% of my cash available)
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2 comments:

  1. MsKlovibesMarch 31, 2009 at 8:34 AM

    Rashad,

    You have listed several of your favorite investing sites, have you read any other literature or what literature would you suggest someone read before becoming a trader?

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  2. RashadApril 1, 2009 at 4:32 PM

    There are quite a few books that I like - "The Secret" by Rhonda Byrne, "Think and Grow Rich" by Napoleon Hill - but my favorite is "The Complete Turtle Trader" by Michael Covel. Also look for any books on LEAPS and covered calls

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