Trade Stock Tip

[Denny Crane]

A few weeks ago, I bought 25,000 shares of a penny stock for $160. It was on a hunch.

The name of the stock is NTEK, Nanotech Entertainment. They run a service called UltraFlix, a library of 4K content for streaming to TVs. Their UltraFlix app is prominent on Samsung TVs and Sony TVs and probably many others. They're also prominent on Roku.

$99 for 99 movie rentals. I saw some people suggest they might be the netflix of 4K content.

I figure as the 4K tech gains popularity, people will look to get 4K content. UltraFlix app being in front of so many eyeballs should get them some sales. I figure.

The stock was less than $.01 when I bought it (about $.006/share). Today it's at $.0123.

Not much downside risk for me. If it goes to $0, I lose $160.

The company has over 1 billion shares outstanding and a market cap of less than $10M (less than $5M when I bought it). I figure if nothing else, some company will come along and acquire NTEK, lock stock and barrel, just for the content and content deals alone.

Don't bet the ranch on this stock. If you have a couple $hundred to risk, you might make a little money on this one.

A guy can dream. If it hits $10/share, I did really really well

 

[JfizzleBlazer]

And if you lose it, it's a loss you can take on your taxes (up to $3,000/yr) if not being taken against capital gains.

 

[dviss1]

A few weeks ago, I bought 25,000 shares of a penny stock for $160. It was on a hunch.

The name of the stock is NTEK, Nanotech Entertainment. They run a service called UltraFlix, a library of 4K content for streaming to TVs. Their UltraFlix app is prominent on Samsung TVs and Sony TVs and probably many others. They're also prominent on Roku.

$99 for 99 movie rentals. I saw some people suggest they might be the netflix of 4K content.

I figure as the 4K tech gains popularity, people will look to get 4K content. UltraFlix app being in front of so many eyeballs should get them some sales. I figure.

The stock was less than $.01 when I bought it (about $.006/share). Today it's at $.0123.

Not much downside risk for me. If it goes to $0, I lose $160.

The company has over 1 billion shares outstanding and a market cap of less than $10M (less than $5M when I bought it). I figure if nothing else, some company will come along and acquire NTEK, lock stock and barrel, just for the content and content deals alone.

Don't bet the ranch on this stock. If you have a couple $hundred to risk, you might make a little money on this one.

A guy can dream. If it hits $10/share, I did really really well

Dayummmm! Even if it hits $1 per you made a killing.

 

[EL PRESIDENTE]

 

[EL PRESIDENTE]

Is there a restriction on when you can sell the stock?

 

[MarAzul]

And if you lose it, it's a loss you can take on your taxes (up to $3,000/yr) if not being taken against capital gains.

That was always one of my favorites in our tax code, limiting the loses you can deduct WTH?

Then another that bite me in the tail was limiting your expenses when you have travel and living expenses not covered by your employer, Such as working in another State, living in a hotel there during the week and flying home week ends. Ouch! Then they screw you by blocking a path to fix it, work as a contractor instead of as an employee. One little barrier, working on the 1099, they force your employer to take the risk, if you don't pay the tax due on the income reported on the 1099, the employer is held liable for the tax. Most companies won't take the risk. Heck, it may even be worse now I guess.

 

[MarAzul]

Is there a restriction on when you can sell the stock?

Tax wise, you bet! See JFizzleRaider.

 

[MarAzul]

Then there is the bull shit of earning income in multiple states. You really don't pay the same tax as if you had earned the money in only one state, not even close. Then that gets compounded by the
limits on travel and living expenses.

 

[Denny Crane]

Is there a restriction on when you can sell the stock?

No.

Tax-wise, if you sell within a year of purchase, you pay short term capital gains, which is the same thing as ordinary income.

Long term capital gains are taxed at a lower rate.

 

[rasheedfan2005]

No.

Tax-wise, if you sell within a year of purchase, you pay short term capital gains, which is the same thing as ordinary income.

Long term capital gains are taxed at a lower rate.

Thats why I havent fucked around with individual stocks shit is too confusing for me.

 

[Denny Crane]

Thats why I havent fucked around with individual stocks shit is too confusing for me.

Buy stocks and hold them for a year. That's all you need to know.

If you then sell your stock, you pay 15% tax on any profit you made on the stock.

 

[Blazer Freak]

Where would you guys recommend going to get into something like this? I've always been interested in dabbling into stocks but I have no idea where to start and what site/software to use.

 

[Natebishop3]

Where would you guys recommend going to get into something like this? I've always been interested in dabbling into stocks but I have no idea where to start and what site/software to use.

You wait for Giovanni Ribisi to call you and make you an offer on some really exciting new stocks.

 

[Denny Crane]

Where would you guys recommend going to get into something like this? I've always been interested in dabbling into stocks but I have no idea where to start and what site/software to use.

etrade.com, etc.

Pick one, open an account and you can start buying and selling stocks and other things.

 

[JfizzleBlazer]

etrade.com, etc.

Pick one, open an account and you can start buying and selling stocks and other things.

I forget what some guy did, but there is a certain stock you don't want to buy. Because if it goes to nothing, you can be liable to pay money back. I remember reading some guy bought like 50k in stocks, and went to bed. When he woke up he owed 37k or something silly like that.

 

[Denny Crane]

I forget what some guy did, but there is a certain stock you don't want to buy. Because if it goes to nothing, you can be liable to pay money back. I remember reading some guy bought like 50k in stocks, and went to bed. When he woke up he owed 37k or something silly like that.

Sounds more like a margin call situation.

If you borrow against shares you own to buy additional shares, if the stock goes to $0, you ow the amount borrowed.

The brokers will loan you the money against existing shares. If your loan amount ever goes below the value of the stock, then they issue a margin call. If that happens, you have to pony up more cash to pay down the loan to the value of the stock or you have to sell enough stock to achieve the same thing.

It's more likely you'll get a margin call before a stock goes to $0. But some sort of catastrophe can take a stock to $0 in seconds.

I don't know of any specific stock that would have the sort of liability you describe. Any stock can go to $0 and cause you to owe big bucks if you're on margin.

They don't call them brokers for nothing.

 

[JfizzleBlazer]

Sounds more like a margin call situation.

If you borrow against shares you own to buy additional shares, if the stock goes to $0, you ow the amount borrowed.

The brokers will loan you the money against existing shares. If your loan amount ever goes below the value of the stock, then they issue a margin call. If that happens, you have to pony up more cash to pay down the loan to the value of the stock or you have to sell enough stock to achieve the same thing.

It's more likely you'll get a margin call before a stock goes to $0. But some sort of catastrophe can take a stock to $0 in seconds.

I don't know of any specific stock that would have the sort of liability you describe. Any stock can go to $0 and cause you to owe big bucks if you're on margin.

They don't call them brokers for nothing.

http://www.marketwatch.com/story/he...hed-and-now-i-owe-e-trade-10644556-2015-11-19

 

[Denny Crane]

Short position. He borrowed money to buy the stock he was selling.

http://www.investopedia.com/university/shortselling/shortselling1.asp

Short selling is the selling of a stock that the seller doesn't own. More specifically, a short sale is the sale of a security that isn't owned by the seller, but that is promised to be delivered. That may sound confusing, but it's actually a simple concept. (To learn more, read: Benefit From Borrowed Securities.)

 

[blazerboy30]

This isn't much different from buying far out-of-the-money call or put options. You can get them for pennies, you have huge leverage and you have limited loss. The benefit of using calls and puts is that you don't have to deal with the scams and unregulated penny-stocks market.

 

[Denny Crane]

Not sure what out of the money options have to do with this.

The stock tip is an educated hunch on a specific stock. It's already a penny stock. An issue with penny stocks is the broker's commissions can be a huge % of the deal. 8000 shares at $.001 costs $8 and a $8 commission is huge in comparison.

Your advice about scams is great. A lot of people will talk up a penny stock to sucker people into buying and driving up the price so they can dump the stock for a quick profit.

In this case, I've seen the company's app on the TVs. The TVs are selling extremely well. The product they sell is a "hot" product. Regardless of whether people pump and dump the stock, I have a hunch the company will either be bought out for its 1000+ UHD titles and relationships, or it will increase revenues and thus the stock price.

Also, jfizzleraider talked about a situation where you buy stock and it goes to $0 and overnight you end up owing the broker. This situation is clearly one where you are borrowing from the broker and get a margin call. Buying call or put options, not on margin, you can only lose your principle. You won't owe the broker.

 

[jlprk]

That was yesterday. Today's tipperooni is...

http://www.bloomberg.com/news/artic...ull-most-money-out-of-etf-in-five-years-chart

 

[blazerboy30]

Not sure what out of the money options have to do with this.

The stock tip is an educated hunch on a specific stock. It's already a penny stock. An issue with penny stocks is the broker's commissions can be a huge % of the deal. 8000 shares at $.001 costs $8 and a $8 commission is huge in comparison.

Your advice about scams is great. A lot of people will talk up a penny stock to sucker people into buying and driving up the price so they can dump the stock for a quick profit.

In this case, I've seen the company's app on the TVs. The TVs are selling extremely well. The product they sell is a "hot" product. Regardless of whether people pump and dump the stock, I have a hunch the company will either be bought out for its 1000+ UHD titles and relationships, or it will increase revenues and thus the stock price.

Also, jfizzleraider talked about a situation where you buy stock and it goes to $0 and overnight you end up owing the broker. This situation is clearly one where you are borrowing from the broker and get a margin call. Buying call or put options, not on margin, you can only lose your principle. You won't owe the broker.

You were saying one of the reasons for doing this was that it had little downside risk for you.

You're making a gamble that it *might* go up in value by 100x with little downside risk. That is the exact reason people use options.

I wasn't responding about margin calls. If I was, then I wouldn't have specifically mentioned the limited loss.

 

[Denny Crane]

Options expire worthless. Stock doesn't.

I bought 25,000 shares for $160. I won't be declaring bankruptcy if the stock goes to $0. I'm going to sit on the stock for a long time, unless the stock goes through the roof, or the company is acquired or goes bankrupt.

I paid $.0066 a share. It closed at $.0088 today. It was $.0132 yesterday.

I offered the tip. I shared the rationale that the stock might have some upside. Buy if you want, don't if you don't want to.

 

[blazerboy30]

Options expire worthless. Stock doesn't.

I bought 25,000 shares for $160. I won't be declaring bankruptcy if the stock goes to $0. I'm going to sit on the stock for a long time, unless the stock goes through the roof, or the company is acquired or goes bankrupt.

I paid $.0066 a share. It closed at $.0088 today. It was $.0132 yesterday.

I offered the tip. I shared the rationale that the stock might have some upside. Buy if you want, don't if you don't want to.

If you think penny stocks don't expire worthless, then you need to do some more research. And I have some penny stocks I'd like to sell you.

 

[rasheedfan2005]

I like your rationale for this particular stock. What im worried about is say I buy $100 worth of stock and after brokerage fees im out $120. Ok so the most I lose is $120, but say I decide I want to sell, do you have to wait for a buyer or just click a button and boom someone some where pays you?

 

[Denny Crane]

If you think penny stocks don't expire worthless, then you need to do some more research. And I have some penny stocks I'd like to sell you.

If the company goes belly up, sure.

There's no time limit as with options.

Or... Do tell me what day shares in NTEK expire. Month, day, and year.

 

[Denny Crane]

I like your rationale for this particular stock. What im worried about is say I buy $100 worth of stock and after brokerage fees im out $120. Ok so the most I lose is $120, but say I decide I want to sell, do you have to wait for a buyer or just click a button and boom someone some where pays you?

There were 13.5M shares sold yesterday. You'll be able to sell at market within seconds. As long as the market is open...

 

[blazerboy30]

If the company goes belly up, sure.

There's no time limit as with options.

Or... Do tell me what day shares in NTEK expire. Month, day, and year.

I never said this is exactly like options, just that you were referring to it as limited downside risk... Like options.

No idea why your panties are in a bunch.

What's the bid/ask spread?

 

[Denny Crane]

I never said this is exactly like options, just that you were referring to it as limited downside risk... Like options.

No idea why your panties are in a bunch.

What's the bid/ask spread?

It is limited downside risk, like options. You can lose all your investment, but no more. In this case, your investment is in the low $hundreds, which I consider little downside. Unless you go on margin - which is what I was addressing in jfizzleraider's posts/questions.

If you buy far out of the money options, like you suggested, your expectation is to lose your investment.

If you are buying puts as a hedge against your portfolio, you expect to lose your investment in the puts. It's like an insurance policy and the cost of the puts is the premium.

 

[blazerboy30]

View attachment 8521

It is limited downside risk, like options. You can lose all your investment, but no more. In this case, your investment is in the low $hundreds, which I consider little downside. Unless you go on margin - which is what I was addressing in jfizzleraider's posts/questions.

If you buy far out of the money options, like you suggested, your expectation is to lose your investment.

If you are buying puts as a hedge against your portfolio, you expect to lose your investment in the puts. It's like an insurance policy and the cost of the puts is the premium.

So you claim your stock tip has limited downside risk, just you $hundreds. But you also claim that this isn't like an option.

You're confused.

You have no less downside risk, percentage-wise, than any stock purchase. You just have that mind set because of the low $/share price. If this company did a 1000:1 reverse split, you wouldn't have the same mindset even though all the risks are exactly the same.

You don't understand options and options pricing if you think the expectation is to lose your investment. Options are, in theory, priced to break even over time, minus transaction fees.