RobinHood race from $2,500 to $250,000

[Fermion]

With all the big brokers now with no fees, is there any benefit to staying at RH? Maybe move money to ETrade, Fido or one of the others who do offer IRA? The sky's the limit then for you with no tax/ACA handcuff's on.

Maybe. Etrade and the others are not exactly as free on option trades though...they still charge a pretty hefty per contract fee even if the commission is now free.

 

[bobandsherry]

Maybe. Etrade and the others are not exactly as free on option trades though...they still charge a pretty hefty per contract fee even if the commission is now free.

ETrade is 65 cents per contract, or 50 cents if ya do 30 or more per quarter. With the potential cost of the ACA cliff and ability to defer your taxes, just seems it would be less expensive option (no pun intended). Hope you have continued success.

 

[Fermion]

I sold my BMY calls this morning. They were not up quite as much but I still got enough to push Robinhood up to $15,800.

Of course BMY has now kept climbing so should have waited.

I don't second guess though, I just take profit, sit back, and wait for another opportunity.

Looking at you Merck. What are you doing in the $84 area after increasing dividend by 11% and getting more approvals for Keytruda? Should I buy you again?

 

[dirtbiker]

I wish taxes were not an issue....Robinhood doesn't do IRAs though.

With all the big brokers now with no fees, is there any benefit to staying at RH? Maybe move money to ETrade, Fido or one of the others who do offer IRA? The sky's the limit then for you with no tax/ACA handcuff's on.

It seems that moving to a broker that offers IRAs is the only feasible way to get to your goal without going over ACA limits.

 

[Fermion]

It seems that moving to a broker that offers IRAs is the only feasible way to get to your goal without going over ACA limits.

It doesn't really work though with my trading style since you have to wait for fund settlement in a IRA. While I don't try to day trade, sometimes it happens to work out that way.

Example today. This morning I sold the BMY I bought yesterday. Just now I bought it back again at a lower price. I may sell it again before market close.

This cannot be done in a IRA.

 

[dirtbiker]

It doesn't really work though with my trading style since you have to wait for fund settlement in a IRA. While I don't try to day trade, sometimes it happens to work out that way.

Example today. This morning I sold the BMY I bought yesterday. Just now I bought it back again at a lower price. I may sell it again before market close.

This cannot be done in a IRA.

Oh, I didn't realize this. I've only done buy and hold type of investing, so this never occurred to me. How do you plan to get to $250,000 without going over the ACA limits?

 

[Fermion]

Oh, I didn't realize this. I've only done buy and hold type of investing, so this never occurred to me. How do you plan to get to $250,000 without going over the ACA limits?

Well, I thought I would have more time...remember I was only trying for a 60% gain per year, so the first year $4000 ($1600 gain), the second year $6400 ($2400 gain), the third year $10,240 ($3840 gain), the fourth year $16384 ($6144 gain), etc.

It should not have really had a great effect on our ACA MAGI yet, but I got ahead of schedule.

 

[Fermion]

I just couldn't resist a few trades in Gilead and Disney, which pushed me up over $17,000. I am going to try really hard to stay cash for the rest of the year.

582% return so far

 

[Fermion]

I am going to post the end of year results for this RobinHood contest (with 1 player) since I am all cash and plan to be all cash until Jan 1 for tax/ACA reasons.

Yes, the tax man is wagging the dog, something I did not expect so soon when I started this account with a piddly $2,500. As it grows and gets into bigger money, like $50,000+, I guess taxes will have much more of an effect on how I trade. Shame, but RH doesn't do IRAs so I really had little choice when I started if I wanted totally free commissions.

So we end the year at $17,420, an all time gain over 590%.


As far as other interesting things, in my IRAs I have purchased 700 shares of Bluebird and 2000 shares of Nektar in hopes of either or both of them generating some good returns in 2020. I may copy these trades in this account if they pull back significantly on "not so bad" news. It sure would be nice to see Nektar bought out in 2020 though. That IRA would double.

 

[Winemaker]

I'm pulling for you on the Nektar!

I've been catching a falling knife on that one. After jumping in about $45, it has fallen to further lows. I was thinking about nibbling again, one of my preferred gets called next Tuesday in that account.

 

[Running_Man]

I am going to post the end of year results for this RobinHood contest (with 1 player) since I am all cash and plan to be all cash until Jan 1 for tax/ACA reasons.

Yes, the tax man is wagging the dog, something I did not expect so soon when I started this account with a piddly $2,500. As it grows and gets into bigger money, like $50,000+, I guess taxes will have much more of an effect on how I trade. Shame, but RH doesn't do IRAs so I really had little choice when I started if I wanted totally free commissions.

So we end the year at $17,420, an all time gain over 590%.


As far as other interesting things, in my IRAs I have purchased 700 shares of Bluebird and 2000 shares of Nektar in hopes of either or both of them generating some good returns in 2020. I may copy these trades in this account if they pull back significantly on "not so bad" news. It sure would be nice to see Nektar bought out in 2020 though. That IRA would double.

Is this a ROTH IRA would seem an ideal strategy for a ROTH.

 

[Fermion]

RM, what do you mean? The IRA where I am buying the biotech? Unfortunately it is a traditional IRA...too bad because it is up 127% for 2019...I made a lot of money in it on BMY and Celgene.

 

[Born2Fish]

RM, what do you mean? The IRA where I am buying the biotech? Unfortunately it is a traditional IRA...too bad because it is up 127% for 2019...I made a lot of money in it on BMY and Celgene.

No need to apologize - you kicked butt!

I appreciate your ongoing updates. I played around with CELG a few years ago and did pretty well - buying and selling - in a Traditional IRA.

I have started following BMI and am looking for an opportunity to trade during 2020.

Almost all of my savings are in Traditional IRA and 401k. My expected income during retirement will be less than half of my high income earning years (when I maxxed out contributions to both pre-tax accts and HSA) so I will be taxed at a significantly lower rate as I draw down.

Looking forward to following your progress next year.

 

[Fermion]

Sorry, the IRA where I just purchased the 2000 Nektar shares is up 125% YTD not 127%. It has an interesting YTD chart, better than my Robinhood account even though the gain is not quite as much because the volatility is a lot lower. Essentially after I worked through some slight rough spots, the account only went up

 

[ERD50]

Is this a ROTH IRA would seem an ideal strategy for a ROTH.

Yes. (Directed to Fermion) : If you think you can do this consistently, isn't it worth it do some ROTH conversions?

I guess you are trying to manage your income for ACA reasons, but it seems a near-no-brainer to use whatever headroom you have for ROTH conversions in 2020, and do your trading in the IRAs to avoid additional taxable income.

Am I missing something? With the low cost of trades these days, I sure don't see the advantage to using the RobinHood account - you are paying far more in taxes than in trading fees, aren't you? I may have missed if you are doing any short-selling, I didn't see it, and I think it was mentioned you could do that synthetically in an IRA with options.

-ERD50

 

[Fermion]

Yes, obviously I should do all trading in Roths, but I only have about $40k in my Roth right now.

When I started this Robinhood $2,500 game, Robinhood was the only broker with totally free trading. Recently other brokers have signed on to this but Robinhood still is the only platform with totally free option trading. I don't use options as much as I did when the account was in the low thousands but I still might buy a few leaps now and then or covered calls.

There is also the disruption to my contest. I started the contest in Robinhood and kind of want to finish it there.

In the grand scheme of things though, if I do manage to turn $2,500 into $250,000 in a relatively short time frame, is paying a little tax so big of a deal?

 

[ERD50]

...

In the grand scheme of things though, if I do manage to turn $2,500 into $250,000 in a relatively short time frame, is paying a little tax so big of a deal?

Yes, it is!

Assuming 15% LTCG on all of it (some might be at zero, and short term might be higher):

0.15 ⋅ (250000 − 2500) = $37,125 minus the taxes on $2,500 to convert. I'd say $37,125 is a big deal to most people. Or the effect on your ACA status?

-ERD50

 

[sengsational]

I count about 8 bigish upswings in your chart, without which, you'd not have been as successful. I haven't been following along...did you document those successes at the time? It might be instructive for people to see the trades that led to your success.

 

[RobbieB]

Tax people are weird.

If I made a quarter mill and had to pay out 38 grand I would be going to Jamaica to smoke joints the size of bazookas. Not complaining.

Amazing.

 

[ERD50]

Tax people are weird.

If I made a quarter mill and had to pay out 38 grand I would be going to Jamaica to smoke joints the size of bazookas. Not complaining.

Amazing.

Not sure if that was directed at me, but I sure wouldn't be complaining about making so much that I had a $38K tax bill. I'm just saying that with the ROTH alternative available, why pay so much in taxes?

-ERD50

 

[Dean56]

I have really enjoyed following this thread by Fermion. I can't wait for it to continue in 2020.

Good luck to everybody in 2020.

 

[Fermion]

I think for 2020 in Robinhood I am going to try and trade Nektar a little bit. I have those shares in my IRA but as long as I don't take a loss in Robinhood, it won't have any wash sale issues.

Jan 14 is supposed to be an important date for Nektar's 181 drug which is a opioid with somewhat less abuse potential. I don't know if they will get it approved then or if sales will ever be meaningful in this current opioid crisis environment, but it could be a good date to trade around. They have other irons in the fire so even a negative decision would not be the end of the investment.

 

[Fermion]

Well, WHEE!? Nektar amended a deal with BMY on another drug and the stock is up some 11% today even before the 181 news coming out next week.

This has pushed my Robinhood account really close to $20,000. I sold half and am keeping half for another solid move up next week.

Could I hit $25,000 before the end of year 2? Maybe?

 

[Fermion]

Might have sold that half a bit early. The rest has gone up more and now my Robinhood account is at $20,829

 

[Fermion]

Wow, Nektar still going up.