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-   -   RobinHood race from $2,500 to $250,000 (http://www.early-retirement.org/forums/f44/robinhood-race-from-2-500-to-250-000-a-92518.html)

Fermion 06-24-2018 09:26 PM

RobinHood race from $2,500 to $250,000
 
I just opened a new account with RobinHood this evening.

I am funding it with $2500 and probably will do a lot of biotech and options trading, maybe even biotech options!

It will take a couple days for me to get access to options trading (I think) because they want to make sure you know what you are doing (I do). I believe they make you place a few stock trades then apply for option level trading, which is still free.

This is straight up casino gambling but I have been doing this in Etrade since 2001 and have managed to raise a $1700 IRA account to $93,000 over the 17 years. This is with paying $9.95 stock trades and $1 per contract plus $9.95 option trades AND having to wait three days for trades to settle. I think I can do a bit better and faster with the larger stake and margin account (not for margin itself but for instant settlement). This is why the rather ambitious goal of going from $2,500 to $250,000, hopefully in a decade or less, if RobinHood stays in business.

Others are welcome to join me but I figure not many are interested in the work and risk. I am still going to post my trades and a screenshot of my account balances and positions for anyone interested in tracking the success or failure.

Once the funds settle, I am going to be looking at Merck Jan 2019 options and Geron stock for my first trades, if the price is right. Both stocks should move up this year on good catalysts. Geron has a decision to be made by J&J on continuing trials for MF and MDS. A positive decision on this continuation should propel the stock from $3.60 to about $7. A negative decision will likely drop it to the $1.50 to $2 range. Because of the good OS results in the trials, I think a positive decision on continuation by J&J is more likely, which makes the play a good risk/reward. A buyout could happen and would probably be for $3B to $5B, or about $15 to $25 a share.

Merck is a slow moving giant, but the options are insanely cheap for the leverage. Keytruda is doing extremely well and it is likely to help boost the stock to the $65 area by EOY from the current $61 area. The options are cheap enough that this $4 move could mean a 100% gain on Jan 2019 strikes.

aja8888 06-24-2018 09:34 PM

I'm in and signed on at RH. Tomorrow I will fund the account. It's about time I got off my @$$ and did something with a few bucks. ;D

Gilead has been a flat line for a year now. Any more thoughts on what's going on there?

Fermion 06-24-2018 09:35 PM

Hmm. I need about a 60% annual return for each of the next 10 years to reach my stated goal. I have my work cut out for me!

Fermion 06-24-2018 09:40 PM

Gilead is a tough one to figure out. I have a little bit still in a IRA (500 shares at $70.50 cost basis) and really am not sure if I should write calls against it or sell it. I think maybe they paid too much for KITE (I had shorted KITE in the Boho contest because I didn't think anyone would pay $11B for them with JUNO out there with a competing therapy).

If they could have gotten NASH going by now they would be back in the game and $90 to $100 a share. Hep C sales are going to continue to drop off and so I do not see Gilead going over $75 to $80 a share unless CAR-T or NASH takes off. It could be a good stock for collecting dividends and selling calls against it, as it probably would not drop below $60 either. I would be a more interested buyer at $65 or so.

Texas Proud 06-24-2018 10:35 PM

Is this taxable money? I do not think you can have margin on an IRA...


Decided to look it up... one website opinion of it...

Robin Hood right now is not much more than a smartphone app. It's not a solid investment firm were we would feel comfortable investing our money. Getting something for free is great but we would much rather invest with a discount online broker such as TD Ameritrade or Ally Invest and sleep sound at night.

But with that little amount of money I doubt you can go wrong.... it is regulated like any brokerage firm...

DrRoy 06-25-2018 04:31 AM

Quote:

Originally Posted by Fermion (Post 2066877)
This is straight up casino gambling

I sure agree with that.

ERD50 06-25-2018 07:48 AM

I won't sign up, as I'd just do a Total Market fund and buy & hold, or maybe a 70/30 blend. We can measure that w/o an actual account.

But I'll watch. I'd love to see Fermion reach his goal of 60% returns for 10 years (or half, or a quarter of that)! Wow!

Of course it is possible with some good picks and concentration. It would be fun to watch.

-ERD50

Fermion 06-25-2018 10:01 AM

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Ok, RobinHood (from now on referenced as RH) funded my account this morning with $1000 of $2500 deposited via ACH. That was insanely fast. They also already gave me my free stock....drum roll....wait for it....Apple!

No, just kidding. They gave me 1 share of ZNGA, valued at $4.06

So I started the day with $1004.06 (waiting on the $1500 extra coming in a couple days I guess).

I put in a order for 50 shares of Geron just to test the waters, then tried to buy another 100 shares but only 79 filled. Cancelled that order and later put in a order for 21 shares at a drastically lower price ($3.51 vs $3.53). So far 4 of those 21 shares have filled. Almost too much excitement.

Oh, and to try the options trading, I had to go to the phone app, because the website app doesn't seem to have a link to options trading. This makes me think they have like 2 part time coders working from India as their development team. Oh well.

I did manage to buy 2 Oct 2018 $62.50 Merck call options for $2.12 each. I wanted the Jan 2019 $60 calls but the price was not falling to what I want to pay (no more than $4). I *think* Merck will have some positive movement before October (probably in July actually) so there should be a good chance to swing a few dollars from this trade. When I get the other $1500 I will examine 2019 Merck options at that point and possibly a bit more Geron. 500 shares of Geron at $3.50 advancing to $7 in September would pretty much give me the needed 60% gain this year.

Here is a screenshot of the web trading platform. I should get my wife to write a better interface and mail it to RH.

griffithee 06-25-2018 01:50 PM

Good luck. I made 23% last week on QQQ options using RH. Bought some calls in the morning and sold them around lunch time. Was looking to do the same this week but will wait until July. I dont want to get flagged as a pattern day trader. lol

Fermion 06-29-2018 08:21 AM

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Well, got my account fully funded yesterday (6/28) and made a few trades. Lost everything on a pork bellies futures bet :frown:


Hah, just kidding. I made $70 trading some Merck. So a one day return of $70/$2500 = 2.8%

Annualized into 200 trading days per year, that is a return of 24,900%

Fermion 06-29-2018 08:52 AM

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Another quick update.

Just did another round trip on Merck options, bought 6 Jan 2019 $60 calls for $3.95 and sold them for $4.05 FIFTY seconds later. $60 profit, no commissions! I am impressed with the rapid fill time and ability to get a good price on the bid/ask of the options. And this is free???

I have paid a ton of commissions at other brokerages, feeling a bit like a sucker here.

Alas I have hit my three round trip day trades for a 5 day rolling period. If I do another trade (buy/sell same security in same day) I will be locked out of trading that way for 90 days. You can get around this by having $25,000 in the account but that would sort of ruin my goal of going from $2500 to $250,000. Guess I could have done $25,000 to $2,500,000 but lets not get ridiculous.

Fermion 06-29-2018 09:05 AM

Oh and here is my referal link to robinhood if you guys want to get a free stock (and I get one too I think)

(mods, if this type of thing is a violation of rules, I can remove it...just seems silly to give up free stuff)

https://share.robinhood.com/richare462

RetireAge50 06-29-2018 12:43 PM

Just signed up. Gonna take it slow at first and see how it goes.

bobandsherry 06-29-2018 01:07 PM

Appears RH doesn't support ability to import directly into HRBlock tax program, only for TurboTax which I don't use, otherwise they just provide a consolidated 1099. Not worth the hassle to have to manually type in transaction data for taxes.

flintnational 06-29-2018 01:58 PM

I don't trade so this may be a dumb question. If RH does not charge fees, how are they paying for trading costs? Are they keeping a portion of the spread between the buy and sell price? Good luck to all! Sounds fun.

foxfirev5 06-29-2018 02:06 PM

I'm just glad I don't have to participate in this stuff.

gstillson 06-29-2018 02:43 PM

Quote:

Originally Posted by foxfirev5 (Post 2069585)
I'm just glad I don't have to participate in this stuff.

Same. Between posting on the forums and watching wheel of fortune, I don't have a lot of time to waste on this type of activity.

Fermion 06-29-2018 06:18 PM

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Quote:

Originally Posted by flintnational (Post 2069581)
I don't trade so this may be a dumb question. If RH does not charge fees, how are they paying for trading costs? Are they keeping a portion of the spread between the buy and sell price? Good luck to all! Sounds fun.

They make it up on volume ;D

Heck, I don't know how they make any money...its a dot com thing I guess. They probably get a fraction of a cent from each trade from the market makers so maybe they do make it up on volume. I thought the trades would take forever to execute but they are faster than E-trade and the fills are closer to the bid/ask direction I want. Probably helps that I am trading tiny lots.

Even though I could not do another buy/sell today (round trip) because I have now done three in a rolling 5 day period, I did purchase 500 shares of Geron near the close for 3.36. It went up a bit after that and is somewhere around 3.47 which is reflected in the portfolio total. I don't trade after hours though.

There is some rumbling on the Geron forums that perhaps some continuation news is leaking out. A key trial was updated today, which J&J probably would not do if they were dumping Geron.

What does this mean? It means the 500 shares at $3.36 could instantly turn into 500 shares at $5 or $6. Maybe this could be my next Endocyte ($1.20 to $14). If so, I am going to be bummed I am trading in dinky 500 share lots.

So here is the weekly gain, which really is only 2 trading days since the account was funded. Not a bad start.

Fermion 07-14-2018 07:29 PM

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Time for a little update!

First, thank you whoever (maybe three of you) signed up and used my link. We both got a free stock for it. I got another Zynga, a Groupon, and a Chesapeake (none of which would I actually buy with MY money lol...which probably means they will be my top performers).

So discounting that $13 or so in stock, I am at about $2950 now from the original $2500 investment, or a return of 18% in a couple of weeks time! I have made some dinky trades, for $5 to $50 profit but it is kind of fun even at that level...I tell my wife, hey we just made $50 on Merck and I am almost as proud of it as the $190,000 I have made on Endocyte (which hit $17 this week!!!...remember me buying it at $1.20 last year?).

I am having a blast but man, if the trades don't download into my tax software I am going to be in a world of pain come tax time. My wife said she would write some software to help if it doesn't convert correctly.

$2950....still a long way from $250,000 but that is the path we must travel.

I posted a screenshot of a few of the trades. I am not sure how to get a better history other than downloading monthly statement pdfs which would have a little too much personal info to share on the interweb. If you want more trade info I will try and oblige, just don't laugh at my dinky trades...I don't have a lot of cash in this account to work with.

FUEGO 07-14-2018 07:39 PM

Quote:

Originally Posted by Fermion (Post 2069730)
They make it up on volume ;D

Heck, I don't know how they make any money...its a dot com thing I guess.

I think you nailed it :)

Get a huge book of business of retail traders and investors. Keep growing it to millions of accounts. Get acquired by one of the big online brokerage firms or roboadvisors for billions. Profit.


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