Legging in means buying/selling components at different times. For example, you may buy the stock and put and then wait for the stock to rise enough so that you can sell the call for more than you paid for the put. However, in doing so you assume directional risk - i.e. the risk that the stock doesn't rise and you won't be able to get enough money for the call to cover the put purchase. Just a hint, when something sounds like too good to be true, it is. Which strategy gives the best risk/reward? A long call. You risk is limited to the premium paid and your potential profit is unlimited. But I guess it is not what you're looking for.
MTE: I thought there was some downside to it. But how come long calls isnt what I'm looking for? Is the profit too small, or do you have to invest too much. Or does it require a lot of work?
I was being sarcastic. Sorry! Buying calls is not risk free. Besides, risk/reward means nothing without probability. In other words, you need positive expectancy. Just because you have a risk/reward ratio of 1:10 doesn't mean that you'll be profitable in the long run. If you only win 5% of the time you will lose in the long run.
here is what the site says: Youâve heard of buying a property and RENTING it out? Did you know you can do a similar thing with stocks and shares? Well, weâll show you how we use latest techniques for RENTING OUT STOCKS to make huge and instant profits How we easily replaced our income in 90 to 180 days â without really having to work for it How we generate an extra $4,000 - $5,000 per month (up to $40,000 per month!) for less than 5 minutes work (it sounds unbelievable, I know, but we will actually show you how we do it â can you really afford NOT to know this essential wealth building information?) Why we believe getting HIGH returns does not have to mean taking HIGH risks (and why the average person will never understand this without a financial education) How we minimize the risk of investing in stocks (so that we sleep easy at night â even if our shares go downâ¦..we donât have to worry!) The incredibly simple way we make money EVEN when the stock prices go down! And even more exciting strategiesâ¦â¦.. Apart from RENTING stocks, we make massive monthly profits on stocks we DONâT EVEN OWN! And that we NEVER need to own these stocks if we choose not to â we just keep getting income from them (month after month after monthâ¦!) And how we also insure ourselves so we almost never lose any money - the worse case scenario may be âbreaking evenâ (although even this rarely happens)
and then this is written on their site, thats why i was carried away. Im gonna buy it anyway, just to see what it is. It might have some useful tips. 10 TIMES your investment in Profits, or a 100% Refund! We give you an IRON CLAD Money Back Guarantee - If you purchase these amazing strategies and for some reason you don't make more than 10 times your investment of $99 back in profits, we will refund the purchase price in full! That's right - Make 1000% on your initial investment, or we'll give you a 100% refund! How can we possibly do this? Well, we know these strategies work. We know you can make them work for you (once you know them). There is only one condition - that you put them into action the way we teach you and follow our rules - if you do that we are certain you can make lots of money. Andrew Dimitri and Scott Robertson Wealth For Freedom
Unbelieveable, what a load of crap. "Huge instant returns".....yeah right. A person with financial education knows that without risk there's no reward. In order to achieve high return you need to take high risk. I suggest you stay away from them and keep your money. This is just the usual hoax, nothing more nothing less.
Buy stock "x" at $15 write a call for a premium of $1 stop loss sell @ $14 and simultanously cover call limit buy at $16
MTE: I do however believe that you can minimise the risk dramatically by experience,knowledge and observation and that you can catapult the learning curve through reading a lot of materials about the subject. The only difference between a sucessfull and a not sucessfull investor is what is in his head. Thats why I'm seeking advice from people who are self made millionaries, and if they have any ideas to share.
Look at it this way, if you'd develop such a system, which generates HUGE INSTANT PROFITS WITH NO RISK, would you be selling it to the public or would you trade it yourself till the cows come home!?