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Old 05-26-2017, 03:22 AM
AuburnKid AuburnKid is offline
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Anyone try no-risk investing?

Of course you say that there is no investment with zero risk. Not exactly true. Sometimes other people make little mistakes with big consequences. Once I was on a Florida real estate company's subscriber list. I got a few offers and then one day, someone forgot to use the Bcc: send to box. I got his >6000 names and email addresses of interested real estate buyers. I used it and sold a condo I had to one of his customers. Happened in 1998 too from some casino online. I used the list to get free offers from other casinos.

No rules in 1929 when a paperboy placed a bid of $1 for 100 shares of a stock that was $155 a day ago. Closed higher so he was up many $1,000s. Good day's pay was about $10 so he was set for life.

These are just simple mistakes but where is the big money? Sometimes people enter orders "at the market" in thinly traded stocks, or commodities. Also there are computer programs that buy and sell in accordance with the programmers logic.

Watch Eddie Murphy movie "Trading Spaces" if you never saw it.

https://en.wikipedia.org/wiki/Trading_Places

There is a "speed of transmission" issue. It has to do with speed of light is way faster than speed of electrons through wires. My bedroom DVR is one quarter second behind living room DVR. It's annoying if I am in bedroom and wife is watching same channel in living room. Time lag.

This happened on Nov. 1, 2016 in the Dec. gasoline market. An important government report was coming out at 11:00.00 CST. I was not expecting anything so I made no money, but suppose I was prepared? This is like past posting in betting. Dec Gasoline was trading at $1.43?? I could have placed a limit order in morning of "Sell 10 Dec /RBZ6 at 1.62". If you're a multi millionaire, you are not reading this but the limit is 5000 contracts in gas in each month. Gas is $420 per penny and about a $5500. margin. So I could afford 10 or $4200/penny. Day trading has 1/4 needed margin.

This is where the expert systems (one of many names for computer programs that trade without human input) programs can go wild. New York or Chicago gets news a few milliseconds first. One of their systems saw the news as a wild shortage of gas and bought many thousands of contracts. The price rocketed up in a few milliseconds and my order of sell 10 would have been filled as market hits 1.6351. The limit is a 20 cent move before all trades must be placed by humans. As soon as humans read the news, they saw the supply was really bearish news and sold, driving price down to the 1.44 range. Price drifted lower for two weeks until a rebound. My short sale would have made $420X10X20 cents or $84,000. About 40,000 contracts were traded.

It's all about placing orders with little chance of getting filled but sometimes you win big.









About 3/4 into this post I saw the logic fallacy in the gas short sale but since I spent so much time on the email addresses, paperboy story which works and are true, I'm putting this here.

Can you see what is wrong with the gasoline short sale?

Answer soon if no one gets it.
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