Quote: (02-28-2013 11:32 AM)BIGINJAPAN Wrote:
West Coast: Selling naked options is risky. Never said it wasn't. I used it as example of a type of strategy and I also will be breaking it down further today when I execute a real trade as a current example and it will give guys a chance to see how things work.
Yes options involve more leverage but that can all be mitigated with a lot of different strategies. That way you earn your 2-3% a month and lower your risk.
I think it is great you are trying to educate people on how options work. The issue I have is with your 2-3% returns monthly, your typing style is making it seem like this is "easy" for an average guy. Anyone with half a brain knows that's not true. People on this board, since it is a board of men, are usually liars + losers or worse both.
So again, if you can
prove 2-3% monthly consistently, I will fly to where you are and we will become millionaires in less than a year flat. Unlike your account I get margin... For free. So that means our returns would be weighted up another 35% on that 2-3% which means 3-4% monthly. We'll make it rain coke and bitches with that profile in less than a year.
With all that said, I also would also not be taking specific advise from MikeCF on
Individual stocks. But his overall idea to just dollar cost down for an average guy is much much more acceptable than an average dude trading options because again average dudes don't even know how a down cut is worse than an up-cut. I am sure he won't disagree with me that he's not the person to talk to for individual stock picks as well.
Again if you have to choose between learning options or dollar costing into bonds + indexes. The choice is obviously to dollar cost for an average guy.
If you're doing better than market, or making money, or whatever. That's great
for you for people on this forum though. I believe even you will admit that's a terrible idea. Hell there is a guy asking about your account and thinking that "dropping in $10K into an options account is too much money"... That's a red flag times 4 million. If you're making some play money on the side (hopefully more) that's great, good stuff, for joe average with $50K in savings nah... He should spend his time trying to make real money instead of earning a few bucks month trading options.
Hope that makes sense.
(An algo is a trading platform on minimal scale as well, if you own say 1M in aapl, you can run an algo to trade 100-200 shares only on a daily basis to take advantage of small sub penny decimal changes in stock price yielding small returns. Hedge funds can be $1M AUM or billions AUM, that is why you're not more liquid than a HF, a MF I agree with you).
What you are trying to say is that a hedgie can't move in and out in small scale. They certainly can. If A. Fund is small. Or B. they feel like it. There is no oversight, so it's not like a MF where I "have to" *move in*. I can sit at my desk and trade 20 shares if I wanted. Not that it would ever be done, but if I want to I can but why would I when I have a comp to do that for me.
Again there are some good strata, but this isn't a great forum by any means to go over options, most people will read that 62% comment I left and be confused as to how that means it validates options being bad.
TL;DR: average dude will get raped in options, HF have no over sight, algos aren't always block trades, don't take individual stock picks from random dudes on the Internet, if you're doing well with your strat cool but most guys are retarded and broke so just DCA down.
Also not trying to start beef here, you and mike would likely get along in person.
