I have $2500. Is it worth it to buy Facebook shares with it?
If you really believe in Facebook stock over next few years, using $2500 you can make a bigger investment in FB using options as compared to buying stock. This is called leveraged trading. And it can actually be safer than buying FB stock at current price because it gives you a cushion if price falls a little.How do you do it? Buy "deep in the money call options for 2 years duration".Sell "at the money call options for same duration"By doing this, you are betting on FB stock to not go down below current price in 2 years time. If the stock price is same or higher than today after 2 years, you make almost 100% profit on the money you invested. And if stock price goes down, your typical break-even point is below current price. So, it is safer than buying the stock at today's price.Real life Example:As of today(April 15, 2016), FB is priced around $110 per share.Jan 2018 Call option for $90 strike is around $30Jan 2018 Call option for $110 strike is around $20So, your effective break-even point for this options spread is $10 per share. So, you make money if the shares close above $100 on expiry (Jan 19, 2018). This way, your investment is safe as you are already at $110 today and if stock does not fall, you will make 100% returns. Even if FB falls to $105, you will make 50% profit.For $2500 dollars, you can trade 250 shares (hypothetically as lot size is 100, so you can only trade 200). If you buy shares directly, you will only buy 20 shares. The only downside is that your maximum profit is limited (which is 100%). But I believe at current price, it is not easy for FB share to double in 2 years. And if it goes down by 10%, you will not lose any money if you choose the options spread route. What is the catch?Now it sounds like a great plan. But the catch is that if shares fall below $100, you start losing money much faster than buying shares. In extreme, you will lose all your investment if the shares close below $90 on the date of expiry. Also, if FB price goes very high, e.g. $300. Your profit will still be 100%. You can not make more than 100% profit in this example as you sold Call option for $110. Final commentsOverall, I love options spread better than stocks as you an make big money with small investments and if you are wrong, you still have buffer before you start losing money. Also, an experienced options investor will create more spreads to reduce risk and make more money in these trades.
Portfolio value question. Thanks for the help!?
Prior to the ex-dividend date you had a portfolio worth $104 x 340 = $35,360 If nothing else changes the price of the stock, on the ex-dividend date the value of the stock will decrease by the amount of the dividend to $100.50 per share. You will also have in your portfolio what is basically an IOU saying that you will receive $3.50 per share on the distribution date. That would make the value of your portfolio ($100.50 + $3.50) x 340 =$35,360. Although it is not done very often, if you chose to have the dividend sent directly to you instead being added your portfolio, on the ex-dividend date your portfolio would be worth $100.50 x 340 = $34,170. Of course these are hypothetical results since there is always something else that causes the price of the stock to change.
What happened to conrail stock and is it worth anything? if yes, how much?
Conrail is now owned by two firms: CSX Corporation and Norfolk Southern. Here are the web sites for the two firms and the tickers and last trades: http://www.csx.com/ http://www.nscorp.com CSX 67.32 NSC 51.810 If you have the certificate, you may want to contact one of these two firms, and see what was done about existing shares at the time the current corporate setup was created. Additionally a number of people collect cancelled stock certificates, a hobby called scriptophily, so the cancelled certificate may have value on eBay or something. Good luck.