I have to say DB that from the front row seat...I thought optionetics guys Alex and Scott both throw insults far more gratuitous than did Mav. No one "win's" the argument. No matter what the initial position, ultimately the "management" of that position is what is important. No one seems to disagree that the BCS and collar are the same...optionetic's guys say they have a magic formula that in the management of their collar it "becomes" superior to the BCS. I might say that I have a magic formula that my "special" dynamic hedging management of the BCS makes IT superior to the collar.
I think that you may well have hit the nail on the head. Without 'proper' management (whatever that means) the collar is no better than the vertical. If you hold them both to expiry then there certainly is no difference whatsoever. If you manage the collar poorly it may well be worse than the vertical and vice versa. I give up. This discussion and the back and forth between here and optionetics has left me drained. And we've still got our fireworks tonight - Sydney harbour bridge will be lit up like a Christmas tree - I don't want to fall asleep and miss these . Cheers everyone daddy's boy
In another "extreme" scenario ( buy out) verticals will make a 100% profit and collar only around 4%. Here is even more extreme case (but more realistic then stock losing 90% of the value) : stock tanks in pre-market to 200$ , broker sells stock to meet the margins (retail account) and then stock bounces back to 250 at the open. A net loss of 3400$
Because from what I have seen, a lot of what they teach is erroneous, and they charge an aweful lot for it. Admittedly, this is confined to one of their sales seminars, but the guy was saying was utter tosh. Now we have the "lazy collar" being promoted as some magic wealth formula FFS. BTW, I think Mav whopped them with one hand tied behind his back (literally). The issue was the quote I posted earlier in this thread. That has been comprehensively discredited. Suddenly a 90% whackage of the underlying is the key issue. The GOOG example is nonsense in the context of normal trading conditions. Add to that the banning of Mav., the unchecked behaviour of the sycophants and that pretty much confirms a lot of my opinion. You cannot have a sensible debate with one participant's mouth taped shut and a pathetic cheerleading squad baying for blood. Same happens at sales seminars. try standing up and asking questions, they don't like it. It's a bad show. Interesting lesson in marketing though. This is where one can learn something.
i thought he must have quit trading. he sold google straddles before last earnings, right when he had posted some ambitious money making goals. i liked his posts -- today i feel like a no touch liquid silk bang with an exotic flyby.
Yes, there are no fewer than 16 complaints on deceptive practices logged at ripoffreport.com. There are also rebuttles, so it is NOT onesided. Also, according to some, Optionetics is in a related group of companies. And in that group are such outfits like Wizetrade and 4X Made Easy. Yeah, some great companies to be related to... Buyer beware. It's your money. Happy New Year to all.
DB, their stuff is total BS and yes, I have talked to their CEO. About 2 years ago. I made some negative comments about them on my own message board which I ran and one of their minions reported me. I got calls from their lawyers telling me to delete all my negative posts. I refused to do that. They told me they would take me to court. I said go ahead. Finally their CEO sent me an e-mail and told me to call him. So I called him in San Francisco and talked to him for about an hour about his company. The conversation was polite, but I told him his infomercials were very dishonest. I had a particular beef about 12 years olds in Australia make a killing trading options as was portrayed in their commercials. He told me that was legit, I laughed. Like I said, the conversation was friendly and I respect him for at least taking the time to talk to me and we ended the call on friendly terms. It was not my intent to bash him. He agreed to pull the lawyers and I agreed not to make direct remarks about Optionetics they are negative. Let me say this again, there is no validity in my eyes as to what they are doing. My statement regarding the validity of the strategy was only in the reference that they are both the same. If the collar and the BCS are the same, there certainly must be validity in the collar. The problem I have is the collar requires more margin and produces a substantially smaller return as any synthetic does that requires you to hold stock. That is not a flaw in the put/call parity model but rather a flaw in REG T margin. LOL. My point about put/call parity only working at inception and expiration is the very principle put/call parity is based on. It's not that you can exploit it in the interim. I even gave an example on MO stock. Where MO pays a .75 dividend. And a naive trader who does not know any better puts on a reversal because he thinks he has a risk free profit by selling the puts and buying the calls and selling the stock. Obviously the .75 dividend is priced into the reversal and he will have to pay it through the short stock. Well, let's say out of no where, MO cancels their .75 dividend. All of a sudden this trader makes .75 on the trade risk free!!!!!! He screams from the rooftops, put/call parity broke down!!!!!! Uhhh, no it didn't. MO canceling their dividend did not break down put/call parity. You and they might both argue, well hey, anything can happen man between inception and expiration and that is my strategy. And I would say bullshit. You can't put on that trade in the hopes that MO is going to cancel their dividend no more then you can put on the collar in GOOG knowing it's the inferior trade in the hopes that GOOG gaps down far enough so you can buy back the JAN 08 470 call which you sold for 70.00 for .05. That is the definition of lunacy. You just can't do that with a straight face. And then come back to me and tell me that you are justifying this outlandish behavior because the magic is in the rolling down of the calls which synthetically is the same as selling a call spread which can be done just as easily with the bull call spread instead of the collar. See, we are disagreeing on more then just semantics here. The only point to creating a new term "lazy collar" for something that already exists, the bull call spread, is to try to get an audience. See, there is nothing new under the sun. But in order to sell it, you have to tell people there is, that gets them excited. It's kind of the reason why Steve Jobs needs to come out with a new I-pod every 6 months. Otherwise sales would slow down. Well, the people at Optionetics, and this may not even be their strategy, but this Alex Mendoza is one of their staff writers and apparently that lunatic Scott Kramer is too, they decide to manufacture this to get everyone excited. And it worked. I have to give them kudos for that.
How do you know? And related to what? Arb has been gone on and off before. I think nothing serious. Ursa..
And a message to the Optionetics board who claims I was using vulgar language, impersonating other people, using multiple ID's, etc. I used vulgar language in one post in response to a poster who continued to talk down to me and wish me a happy new year everytime I tried to be civil with him and asked him to give me one example of how he rolls down his magic calls. Of course he had no example to give so I told him he was a f*cking jerk. And rightfully so I believe. My posts were deleted well before that comment. I created a second ID because my first one was banned. It was kind of hard to respond to their questions when they ban you. And I was not impersonating anyone. I think it's pretty comical if they actually think I was trying to impersonate Dr. J, LOL. I never said I was him and everyone knew who I was over at ET. And of course, all those that attacked me were not banned nor were their posts pulled. How convenient. Anyway, I just wanted to post this since a few of them are reading this thread. All I'm guilty of is telling Steve he is a f*cking jerk one time after about 15 posts. Yeah, good job guys. I'm the bad guy. You want to hear something even funnier. Optionetics uses my option group in Chicago and tells all their students in the Chicago area that it is their Optionetics group. About 75% of the guys in my group are optionetics students!!!! Thanks Optionetics for the deceitful advertising. It fits well.