I had a friend, mentor and real life trader message me the idea for this write-up. Hey, no reason to take the credit for this amazingness, so thank you, Gene and Roxanne.
What’s another reason to be an active trader? What about simple generosity? Christmas is coming right around the corner and soon people will begin scurrying for presents. What if you could avoid the shopping malls and ice-covered roads altogether and simply give the present of stock? You could give it to a niece, nephew, granddaughter, or cousin who is about to graduate high school. $800 is a serious present indeed, but not one wasted. Most gifts for Christmas break get lost or stolen, or become irreplaceable in a few months. This gift, however, is an investment for the future, literally. And as ‘dorky and nerdy’ as it may sound, I guarantee the recipient would be appreciative. It would be the topic of discussion for sure!
So the question becomes “which stock to buy for $800?”
My vote? Plug Power (PLUG.) I’ve mentioned this stock before. Its future and fundamental outlook for the future is pretty decent. Seeking Alpha has many articles on the projected outlook of PLUG.
Key Levels
One could set a limit buy order for 200 shares at approximately $3.95, because you’ll have to factor in $8.95 in commissions and you have exactly $800 in the brokerage account. Now $3.95 in my opinion is a good place to buy PLUG anyway. I got stopped out of my shares when it closed below $5.50. Now, there are two pretty decent support prices, one at $3.98 and another at $3.52
Options
The other reason I like PLUG is because it has covered calls. You could teach your loved one how to implement covered calls and even on a stock like this with 200 shares; one potentially could generate $6.00 – $14.00 a month in covered call premiums even after commissions, which is a big deal for an $800 account. I mean, after all, if you’re giving it to a kid they have 5-10 years to grow this thing over time. $800 could potentially become $3,200 in 5-10 years if you’re timing your covered calls correctly. The increasing of the stock’s value is an added bonus. And $3,200 is what my first down payment was on my 2 bed / 2 bath condo I currently rent out in Gainesville, FL. Hey, it’s baby steps here folks, but that’s what real life trading is all about. Applying trading to common life challenges and using trading as a source of income and cash as a tool!
Gene, Roxanne, thank you for the suggestion for this article topic. I hope you both have great holiday seasons. Everyone else, my friends, enjoy this weekend! I’ll be in Panama City, FL relaxing! If you need me, holler! Love life, live life and trade it!
