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Asset Distribution

I took a look at my tradeking account asset distributions at the end of today...I don't strive for any particular distribution though I'm not one to be overweight options. However, I am willing to speculate and take risks, so I can imagine my options as high as 30-40% at some times.  

Stock (AAPL, CEO, FMCN): 74.5%

Options (QOH GJ): 12.75%

Cash: 12.75% 

In general, I like to have cash to day trade options. I dont' need the cash, as I keep cash in my normal bank accounts for the bills, bars, whatever. I never trade on margin. What do you guys/gals think about these distributions?

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Posted by godspeedj on 04/04/08 at 09:21 AM

Tag It | 1 user tagged it: asset distribution, stock, options, cash

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WallStreetKing

Member since: Mar 07

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Trade Notes 41
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Age: 40's
NC UNITED STATES
WallStreetKing

I never thought about just investing capital percenatges. I keep a percentag as cash on hand %.

25% investing 75% Cash = liquid assets. If I had to set the 25% to 100% then divide it out (if I had a margin account) I would probably keep 50% in Long Stock, 20% in Options Leaving 30% in margin. Of course that wouldn't be set in stone and would fluctuate a little with the markets and trading activity. Peace. 

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snowman

Member since: Mar 07

5 Day -35.03%
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6 Month 220.54%
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Construction Union
Age: 40's
Pittsford , NY UNITED STATES
snowman

Well there is money to be somewhere all the time. If you do not see an opportunity then it is best to sit back and wait. I can imagine going all in on one option. It depends on your goals. I view it kind of like black jack. You sit down at the table and the first hand is 49.9% chance of winning. After that the odds all go to the house. Options are gambling, unless covered. The way things are going, a company like BSC is gambling (152-10), so it is wise not to gamble on unstable companies or companies not having very good credit ratings. If you notice all the financial companies even the best one GS have all had their credit ratings lowered.

In a regular market I would be 90% stocks 10% options. Not here and not now! Maybe when we hit 1170 on the SPY.

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DannyUpshaw

Member since: May 07

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English Instructor
Age: 20's
Monroe, LA UNITED STATES
DannyUpshaw

I use margin all the time and try to keep about a 20%-25% cushion to avoid margin calls.  Of course, when I buy a stock, I look at the one year, three year, and five year lows.  If I think the stock is overvalued, I *usually* don't buy it.  If it's floating just a dollar or two above its low for the year, it's probably not gonna go down a lot more (assuming the business is in decent shape).  If I was trading with larger amounts of money (say, $15,000 or above), I would probably keep less on margin because a margin call could become very hard to cover.  As it is, if I had a margin call now, slipping some cash over from my checking wouldn't be a big deal. 

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