HSX Forum

Playing & Trading Strategy

There are different opinions and it's risk vs reward.

Posted by: dupa on Mar 20, 09:54 in response to lagunacat's post 2 questions from a newbie...

Like real stocks there is a risk vs reward.

The funds are the safest investments, some are better than others, Razorhawk (see any of his frequent postings) rates the different funds, but in general most of them increase in value over time. In general they have a lower rate of return than other investments though.

Starbonds are the second safest investment. They are a little more difficult to understand though. In general the bond value of a star is adjusted to the average gross of the last five movies on the Tuesday after the movie they have been in is delisted. (On other days the value of the bond rises and falls based on investor activity just like stocks). Because of this, the adjusted value of the bond can be predicted well in advance. Figuring out the predicted value is a little more complicated than my brief description, you can ask detailed questions on the starbonds forum if you want to do your own calculations. The HSX market calendar posts a list several days in advance of the stars who's bond values will be adjusted.  You can avoid the calculations by looking at the position that the BONDS fund has taken on each bond, also both the-numbers.com and projectgenome.com maintain lists of the projected adjust values. 

Betting on openings - buying/shorting stocks of movies that will release in the upcoming weekend, has the best return, but it is also the riskiest. I would guess that betting on openings is the most common thing to do, but nobody that does it has gotten every opening correct. Everybody has been burned by an opening that was better/worse than expected. 

Derivatives involve intermediate risk, but they are a nice thing to invest in especially starting out, because you can get big returns on a small investment. It's not unusual to have a $100k gain on a $20k investment.

As far as locking in your winnings, it depends on your investment. If you are buying starbonds I recommend selling/covering them as soon as possible after they have adjusted. For openings, many people sell/cover on Sunday afternoons after the stock has adjusted. Others short all the openers on Sunday afternoons. In general, timing is important, and when the date, or your target price, has been reached, get out of your position and move on.

There are other low risk ways to make investments. Here are a couple: the-numbers.com maintains a list of the potential return on all of the movies that are at the box office. These are generally smaller stocks, with small $ returns but when just starting out, they are a low risk way to gain money. Another low risk way is to look at wide release movies on weeks after the opening week. If you study the trends, after you have watched how movie box offices generally perform on weeks after openings, I think you will find that it's not uncommon to see individual movies that are under/over priced. 

Also play the earn and spend games here on HSX, they are a no risk way of building up your cash.

In general, I would recommend finding the stocks/bonds that you think make the best investments, and maxing out on those investments. As your portfolio grows, you simply invest in more things. 

2 questions from a newbie... lagunacat Mar 20, 09:01

There are different opinions and it's risk vs reward. dupa Mar 20, 09:54

Thanks! lagunacat Mar 20, 18:01





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