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58

Out-of-the-money options close to expiration often have no bids. If no one is willing to pay even $0.01 for them, you will have to let them expire worthless. Your loss essentially already happened when the underlying failed to surpass your strike; you would at best be fighting to salvage pennies now.


57

Is there anyway to salvage my investment for short-term? No. If by "salvage" you mean "get back as much as you paid", the only way to salvage it is to wait as long as you consider "short-term" and see if goes up again. If by "salvage" you mean "get some money back", the only thing you can do to guarantee that is sell it now. By doing so, you guarantee ...


46

It would be useful to forget about the initial price that you invested - that loss happened, it's over and irreversible, it's a sunk cost; and anchoring on it would only cause you to make worse decisions. Getting "back" from a loss is done exactly the same as growing an investment that didn't have such a loss. You have x units of stock that's currently ...


17

I had a coworker whose stock picking skills were clearly in the 1% level. I had a few hundred shares of EMC, bought at $10. When my coworker bought at $80, I quietly sold as it spiked to $100. It then crashed, as did many high tech stocks, and my friend sold his shares close to the $4 bottom advising that the company would go under. So I backed up the truck ...


14

If you wonder why that is: If you think the couple should be able to deduct a $650,000 loss from taxes, then they should have paid taxes on $630,000 profit first.


13

How often do investors really lose money? All the time. And it's almost always reason number 1. Let's start with the beginner investor, the person most likely to make some real losses and feel they've "learned" that investing is no better than Vegas. This person typically gets into it because they've been given a hot stock tip, or because they've received a ...


12

If you benefit from itemizing deductions, you can deduct the portion of the value of the stolen property (less $100) that exceeds 10% of your AGI. So, if your AGI is $50,000 and you itemize deductions, you can claim a $1,600 deduction on the theft. If AGI is $66,000 or higher, no deduction, if $40,000, a $2,600 deduction, and so on. IRS Form 4684 is used ...


12

As an analogy, consider people betting on an (American) football game between Team A and Team B. Let's make buying the option analogous to betting on Team A. Then selling it is analogous to betting against Team A. The sale price of the option is analogous to the odds a bookie will offer. The expiration date is analogous to the end of the game. Being OTM is ...


11

You probably bought the stock near the peak because "it's been up a lot lately." That's the easiest way to lose money. You need to go back and do some basic research. The stock appears to have been expensive around 75. Why is that? The stock seems to be in a "comfortable" level around 45. Why is THAT? Maybe it's too expensive around 45 (based on the P/E ...


11

You can always sell your calls at the market price (the bid). If the trade did not execute then you are asking for a price greater than the market price. If the bid is zero then it is highly unlikely that anyone is going to take them off your hands even for mere pennies and you can chalk this one up as a total loss. The opportunity to minimize your ...


10

You should be worried. You have made the mistake of entering an investment on the recommendation of family/friend. The last think you should do is make another mistake of just leaving it and hoping it will go up again. Your stock has dropped 37.6% from its high of $74.50. That means it has to go up over 60% just to reach the high of $74.50. You are correct ...


8

If you're asking this question, you probably aren't ready to be buying individual stock shares, and may not be ready to be investing in the market at all. Short-term in the stock market is GAMBLING, pure and simple, and gambling against professionals at that. You can reduce your risk if you spend the amount of time and effort the pros do on it, but if you ...


7

If anyone offers you guaranteed better than average returns, run. They are either lying to you or to themselves. (Claiming that they will try to beat the market is more credible, but that becomes a matter of whether there is any reason to believe that they'll succeed.) If anyone sends you an unsolicited stock tip, run. They wouldn't be doing so if it wasn't ...


7

So how often do investors really lose money? The short answer is, every day. Let's first examine your assumptions: If the price of the share gets lower, the investor can just wait until it gets higher. What are the chances that it won't forever, or for years? There are many stocks whose price goes down and then down further and then to zero. The ...


7

Burn rate describes the rate at which a new company spends its capital to finance overhead before generating positive cash flow (negative cash flow). So burned through means they accomplished it and ran out of money.


6

If you know you have picked a bad stock, the sooner you sell the better. There is a tendency to hold a bad stock in the hope that it will pick up again. Most of us fall into this trap. The best way one needs to look at things are; If you had the same amount of money [suppose you sold it], would you buy this stock at this price? If the answer is yes, hold ...


6

Earnings are cash payments to your account. For example, dividends from the stocks of funds that you own.


6

I agree, one should not let the tax tail wag the investing dog. The only question should be whether he'd buy the stock at today's price. If he wishes to own it long term, he keeps it. To take the loss this year, he'd have to sell soon, and can't buy it back for 30 days. If, for whatever reason, the stock comes back a bit, he's going to buy in higher. To ...


5

If you have a CPA working for you already - this is a question you should be asking that CPA. Generally, NOL only affects the tax stemming from the Internal Revenue Code (Title 26 Subtitle A of the US Code). Social Security and Medicare, while based on income, are not "income tax", these are different taxes stemming from different laws. Social Security and ...


5

Ignore sunk costs and look to future returns. Although it feels like a loss to exit an investment from a loss position, from a financial standpoint you should ignore the purchase price. If your money could be better invested somewhere else, then move it there. You shouldn't look at it as though you'll be more financially secure because you waited longer ...


5

It's, unfortunately, a common enough occurrence that Form 4684 includes a section for theft loss deduction due to Ponzi-type schemes. At a high level, if there is potential for recovery, you'll reduce your losses by 25% (else 5%), this is prior to subtracting out potential SIPC recovery. You'll also subtract $100 from that figure, then subtract 10% of your ...


5

Your observation is correct, they consider the loss in Fair Market Value as long as that loss doesn't exceed the cost basis. That is why a person needs insurance. While there is a mortgage on a house, the lender insists on the policy to protect their investment. Once the mortgage is paid off, the homeowner has to decide how to protect their property. It ...


5

The US has a progressive tax system where as your income increases, the amount of tax on that additional income increases. It does not mean that you pay your highest Federal income tax rate on everything that you make. For an individual, the brackets are: 10% Up to $9,525 12% $9,526 to $38,700 22% 38,701 to $82,500 24% $82,501 to $157,500 ...


4

Investing in a business can be daunting and risky, so it is not for everyone. The most common pitfalls are mentioned here: Friends of friends of friends of ... a business Offers with an expiration date. If someone is seriously looking for an investor, they give the investor time to decide Business owners who don't want to share what they are doing with ...


4

Is it true that you cannot amend a tax return to include both a futures loss carry back and a Schedule C at the same time? No, it is not true. You can include all the changes necessary in a single amended return, attaching statement explaining each of the changes. However you're talking about two different kinds of changes. Futures loss carryback is a ...


4

No. Unless you actually laid out cash for it, you can't write it off.


4

If the stock is below its purchase price, there is no way to exit the position immediately without taking losses. Since presumably you had Good Reasons for buying that stock that haven't changed overnight, what you should probably do is just hold it and wait for the stock to come back up. Otherwise you're putting yourself into an ongoing pattern of "buy high,...


4

The sentence is mathematically wrong and verbally unclear. Mathematically, you calculate the downwards percentage by (old price - new price) / old price So, it should be (134.54 - 100.54) / 134.54 = 25,27%. Verbally, the reporter should have written "The stock is down by 25%", not "down by -25%".


4

You don't. Say you deposited $5000. Then you converted $4950 to Roth. You declare $4950 as the amount converted and you're done.


4

I don't see a tag for United States, so I'm having to assume this is US taxes. It doesn't matter what app you use, IRS trades are all calculated the same. First, you have to report each trade on a 8949 and from that the totals go into a schedule D. Short term trades are stocks that you've kept exactly one year or less, long term trades are for 1 year + 1 ...


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