beenherebefore
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Post by beenherebefore on Jun 14, 2012 19:12:56 GMT -5
Do you consider beta when screening/making trading decisions?
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Deleted
Joined: Apr 19, 2024 8:33:01 GMT -5
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Post by Deleted on Jun 15, 2012 1:58:32 GMT -5
I am not a Stock Trader (I do trade Options), rather an Investor.
But, Yes I mind BETA when I make an Investment Decision. I like to have a "comfortable" level of risk overall. I want movement but not too much. But then We have over 83 Postions in our portfolio, while we do get a decent residual stream - that woud not really mean spit if our portfolio was bouncing all over the place like a Yo-Yo.
BETA gets bantered around as Good, bad, not useful , etc.
We think that BETA, used in the proper context, with other tools is a valid tool for assessment.
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beenherebefore
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Post by beenherebefore on Jun 16, 2012 10:54:09 GMT -5
Thanks for your reply, DI. I think if the market is volitile, then high beta stocks make sense, if everything else is good, in terms of short term trading.
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2kids10horses
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Post by 2kids10horses on Jun 18, 2012 21:29:40 GMT -5
I trade. The Leveraged ETFs.
I have no idea what the Beta is, but I'm betting the market goes either up or down. I'm either long or short. So, using the leveraged ETFs gives me more "action". I don't make any money in a flat market.
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Deleted
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Post by Deleted on Jun 19, 2012 1:41:15 GMT -5
BETA in simplist terms is a quick gauge of Volatility. The Markets have a (presumed) BETA of 1.
So (presumably) a Stock with a BETA of 2 would out pace the market either up or down -and- Staock with a BETA of say .30 would (presumably) barely move either way.
At least that is the basic theory.
What actually happens can be vastly different.
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ModE98
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Post by ModE98 on Jun 19, 2012 9:56:36 GMT -5
D.I. ...... Spot on, as usual.  |
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2kids10horses
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Post by 2kids10horses on Jul 18, 2012 20:48:20 GMT -5
Oh, D.I. I know what "Beta" is, I just didn't know what the Beta of the Leveraged ETF's I trade are.
For instance, QQQ has a higher Beta than the general market. So, a 3X ETF would have a 3 times higher Beta?
The Russell 2000 has a higher than market Beta. THe 3x ETF (URTY) must have a really high Beta.
Using those is like being on margin, without the possibility of a margin call. Actually, like being on "Margin and a half".
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2kids10horses
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Post by 2kids10horses on Jul 18, 2012 20:54:50 GMT -5
Here's some food for thought:
During Bull markets, if the market on any given day is up, the next day is likely to be up. Also, in a bull market, if the market is down, the next day is likely to be down. "The trend is your friend". That's BULL markets.
Bear markets: If the market is up, the next day is likely to be down. If the market is down, the next day is likely to be up. "Reversion to Norm". That's BEAR markets.
To me, it shows that traders are fearful during Bear markets, they don't trust any trend, and are quick to take profits. During Bull markets, traders feel more confident, and are willing to "let their profits run".
Thoughts?
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