I have $1K I am prepared to lose in the stock market. Where should I start?

[D_Odds]

I guess I should finish reading before posted, yabob beat me to it. And please, in my post, scratch “equity-weighted” and replace with “share-weighted”

[D_Odds]

*Originally posted by Lorenzo *
**Options are really risky. On some of them you can lose more than all of your money. Others have infinite upside. Not for the faint of heart. A pretty quick way to potentially make or lose a lot of money. **

Long (equity) options, like long stock, are a quantifiable risk. Short-selling of either poses unlimited risk. Still, no brokerage should allow trading of options or short-selling of stock with a $1,000 investment.

Were you thinking of futures, and the options on those?

[handy]

D_Odds, thanks for the info!
Anyone notice the OP says ‘lose’ in the subject?

[Urban_Ranger]

With a market like this shorting seems to be a viable - or maybe even smart - choice.

Too bad nobody was shorting Enron or Worldcom

[cards]

handy, he asked for risk in the market and I gave him risk. Its about one step away from laying it all on 21 black.

[msmith537]

*Originally posted by handy *
“I don’t understand how doing that would give you any better idea what you made than if you just bought a few hundred shares of Intel.”

If you have one share of every share on the dow, & the dow rises, you made money. Or it would seem so.
**

Kind of the rational for buying into an index fund.

There really isn’t much rational for investing $1000 in individual stocks unless you feel you could beat the S&P 500’s performance. Don’t to forget to include commissions when calculating your return. ie, at $7 x 2 transactions (Buy and Sell), you already need to show a %1.4 return just to break even. You could do that in a savings account.

I don’t recommend shorting if you aren’t experienced. You could end up loosing a lot more than your intiial $1000 if the stock doesn’t drop.

[handy]

"%1.4 return just to break even. You could do that in a savings account. "

Not at my bank in California. Their saving acct rate is .25%

[Lorenzo]

*Originally posted by D_Odds *
**

Long (equity) options, like long stock, are a quantifiable risk. Short-selling of either poses unlimited risk. Still, no brokerage should allow trading of options or short-selling of stock with a $1,000 investment.

**

Actually, a broker friend allows me to buy “American” Call and Put Options with less than a $1,000 investment. Considering the risk, as you say, he probably shouldn’t.

[KidCharlemagne]

Professional Trader here. If I wanted to maximize $1000 and have fun doing it (and didn’t mind spending a little more time) Here’s what I’d do:

1. Find the most currently popular toys that typically end up being destroyed in the process of typical childhood experimentation. GI Joes get blown up by firecrackers. Barbie Dolls get their hair cut. Pokemon cards get bent.
   Try and stay away from something marketed specifically as a collectible.

2. Diversify your purchases over different product lines and products within any given line.

3. Keep them in their boxes. Keep the boxes in boxes (pristine condition) and don’t get sentimental about them.

4. Wait until they are discontinued and sell them on Ebay. Wait longer for better profits.

Ok so it will take some time to sell $1000 worth of collectibles on EBay but it’s kind of fun and if you chooses wisely you’ll make better returns.

[KidCharlemagne]

whoops I meant “choose” and better returns than the stock market