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TranceAddict Investors Club @ Marketocracy (pg. 170)
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| Shakka |
| Cap--if you have a lot of SLV and want to try collecting a little supplemental income, you can consider writing covered calls. Basically, you'd write/sell call options that are out of the money and collect the income. If they mature and remain out of the money, you keep the income. If they are in the money, your stock will get called away from you and the result will be that you basically capped your upside. Just a thought. |
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| Capitalizt |
| Thanks for the advice yall..I'm going to look into this fancy smancy stuff. ;) |
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| saluyamo |
| My picks in March allowed me to beat 83% of the Marketocracy community compared to beating only 26% in December however it personally seems that the calm period is over. Whether it is all to do with Greece or there is another factor I havent picked up on, my last months gains in my markocracy portfolio have been destroyed :mad: |
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| Comrade Stalin |
| quote: | Originally posted by Capitalizt
Thanks for the advice yall..I'm going to look into this fancy smancy stuff. ;) |
Options As A Strategic Investment - Lawrence
Don't even think about options until you have this book to reference. There's so much in it, like reading the bible. Impossible to read all at once. |
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| Comrade Stalin |
| I now own 7 Dec 2010 $20 call options on TNDM. Wednesday, they report earnings and I am expecting a big move. Thought about doing a straddle but I my view is so heavily biased to the upside, I didn't want to use any capital for puts. |
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| Lews |
| I haven't really touched my portfolio in a while (6 months). Just sitting back and collecting my dividends. Thought about shorting oil, or BP at least, but meh. |
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| Comrade Stalin |
| My options are getting downright murdered. I'm down 24%. I wish I could have started over and hedged something. But I am going to hold out. ing Greece. TNDM has nothing to do with that but they get caught up in the maelstrom just like everybody else. |
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| Shakka |
| quote: | Originally posted by Comrade Stalin
My options are getting downright murdered. I'm down 24%. I wish I could have started over and hedged something. But I am going to hold out. ing Greece. TNDM has nothing to do with that but they get caught up in the maelstrom just like everybody else. |
That's the nature of a leveraged product. They move fast as hell. My market puts were up 150% today. Not sure if I should've sold more (I sold 20% of them). Still too much uncertainty out there to not have some hedges on, imho. |
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| Comrade Stalin |
Lessons learned.
1) Don't buy call options if the stock's stochastic oscillator is above 20%.
2) Spread positions with a delta neutral strategy by buying puts in the worst company in a given industry.
Shakka, any tips on how I should go forward? |
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| Shakka |
| quote: | Originally posted by Comrade Stalin
Lessons learned.
1) Don't buy call options if the stock's stochastic oscillator is above 20%.
2) Spread positions with a delta neutral strategy by buying puts in the worst company in a given industry.
Shakka, any tips on how I should go forward? |
I don't get into gamma, delta, etc. I have people calling me all the time trying to sell me on these complex options strategies. At the end of the day I just think they're trying to line their pockets at my expense. My honest experience is that it's easier to make money as a writer of options than as a buyer of them--but make sure your position is covered if you're going to write anything that exposes you to more risk.
I have a friend who has made a ton of money with options--he basically writes an option spread at the beginning of each month (i.e. say gas is at $2.50...he might sell $4 calls and $2 puts and basically wager that gasoline stays inside of that range. If he's right he keeps all of the income.
Just gotta be careful with them and trade them opportunistically I guess (at least imho.) |
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| Comrade Stalin |
New strategy.
1) Buy call option only when stochastic oscillator is less than 20%.
2) Buy put option to neutralize the delta and so make money whether the market goes up or down.
I have 6 months so I expect this European debt crisis to abate. In the meantime, I'm scrounging for more cash to increase my call option position and buy put options. |
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| Comrade Stalin |
| quote: | Originally posted by Shakka
I don't get into gamma, delta, etc. I have people calling me all the time trying to sell me on these complex options strategies. At the end of the day I just think they're trying to line their pockets at my expense. My honest experience is that it's easier to make money as a writer of options than as a buyer of them--but make sure your position is covered if you're going to write anything that exposes you to more risk.
I have a friend who has made a ton of money with options--he basically writes an option spread at the beginning of each month (i.e. say gas is at $2.50...he might sell $4 calls and $2 puts and basically wager that gasoline stays inside of that range. If he's right he keeps all of the income.
Just gotta be careful with them and trade them opportunistically I guess (at least imho.) |
How much time does he allow for expiration of those options? 3 months?
Do you set position limits? Like you won't put more than 10% of your portfolio into a certain stock or option.
Say I write a covered call option. If the buyer exercises that option, I have to buy 100 shares of that stock at the market price and sell it to the buyer for the strike?
I write a covered put option, if the put option is exercised, I must buy 100 shares of the stock, at the strike?
Can you give me a detailed example of a successful and unsuccessful options trade that you have done? |
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