And I suppose the fact that they make you happy while bullsh*tting you till you buy their products somehow makes up for that money you handed over to them. But don't you get it!? That's exactly why they're so desperate to sell you their product. It ain't worth sh*t.....it's all hype, they make money selling their products to naive and unhappy people. If they really knew how to trade they wouldn't be selling that system. By the way, this whole discussion is pointless, so I'm not gonna post here anymore. Whatever you do, good luck!
Mas... An earlier poster was right. Check out a person called Wade Cook. Wade Cook, who not only went bankrupt but has had several judgements against him in different states due to materials related to express or false claims. His seminars would range in the thousands for each one and part of the seminar that you took would reference how much better you did if you went to the next seminar,etc... Wade was a get rich quick "guru" who related dropping the meter when he bought stocks because he felt that it was it was similiar to driving a cab. Someone got in, you dropped the meter and then waiting for the cash to roll in. He was a big advocate of covered calls or "rolling stocks", similiar to what you are describing. While I've never attended a seminar by a guru, I will give you the beneift of my experience getting burnt with a covered call. In a nutshell, I bought shares in a volitile biotech company who was awaiting FDA approval, that "seemed" almost certain. I had been buying in starting at 10, all the way up to 16, while selling calls all the way up. Remember, on a covered call, your downside is only offset by the premium you received. With the strategy that you're advocating, keeping a stop one dollar below the share price is great - unless trading is halted and the stock opens back up far below your stop. The stock I was trading, halted while the FDA meeting was going and then opened back up around 5. I lost quite a bit and it is a lesson that I will never forget. The hardest lessons seem to be the most expensive. You seem to be set on this "get rich quick" program. When you post commentary on their site in regard to what people have told you on this board, do you seriously expect them to say, "Oh yeah, those guys are right- there is no free ride or easy way to get rich fast"? Would you expect to recieve unbiased advice here or from the "get rich" guys? If you are determined to go with the get rich plan, at the very least, get a copy of "Option pricing and volatility" by Sheldon Natenberg and get an overview of options. http://www.amazon.com/exec/obidos/t...102-6379027-6644903?v=glance&s=books&n=507846 I've heard that a fool and his money are soon parted. Hopefully, you will part with your money later, than sooner.
mas >Imagine if you buy a share for 16 dollar, and you rent it out for 40 cents. So you donât lose any money unless the share depreciates below 15.60, you earn money instead. At the same time you buy a put option for maybe 20 cents that enables you to sell the share automatically if it depreciates below 15.60.< Your idea is valid and can be done but the details are a bit different than you post. Here is an example of what can be done: Buy the stock at $50 or so, sell a 50 call for lets say $8, then buy a 47.5 put for $5.70. This gives you a potential profit of $2.30 with a total risk of 20 cents and a cost on the trade of $47.70. I look for ones the are more in the money so the probabilities are higher. Take the above example but have the stock price at $ 52 and adjust the option premiums for the same credit. Running the probabilites on this gives you a bit better Expectation. You can actual find ones that have NO risk. They might have a profit potential of 2.3 and a low side of maybe 30 cents. The problem with these are the probabilities give you an expected return that is just a point or so over CDs. Because of this you need to trade directional in which case you can make a very good return if you are correct with no downside risk. To take this farther you can ratio the shares just a slight bit. this will up the profits a good bit and eliminate the downside risk, even make the downside more potentially profitable than the original sale was to begin with. The only draw back when doing the ratio is you begin to lose profit as the stock moves higher. This is not too much of a concern because you can design them so that the stock would almost have to double before you actually lost anything on the upside. Probabilities on these are really nice. Example of this would be to take the above trade and buy just 90 or 95 shares per option contract. I see this is an old thread. I hope you see it and tell us how you have been doing. boots
FYI. The last time mas posted on ET was 11 months ago. Good luck! He/she might have been lurking all of this time and/or still be subscribed to the thread.
Your suggested position is a collar/fence which is synthetically equivalent to a vertical. In this case, the following two positions are identical to your proposal: BULL PUT CREDIT SPREAD 47.50/50 BULL CALL DEBIT SPREAD 47.50/50 Max profit on the position is $2.50 - debit (synthetic or otherwise) paid. The naturals only have two legs (no stock) so possible execution cost advantage. Higher probabilities do not improve expectation over the long run. On these verticals, the higher the probability the greater the risk and lower the reward. It's a tradeoff. Good work if you can get it! I'd certainly be interested in seeing some of these if you wouldn't mind sharing. MoMoney
Sorry, been on the road for a few weeks. Here is one. WLP @77.44 Sell Jan 07 75 call for $7.9 Buy Jan 07 72.5 put for $2.9 Should give you a little over 7% annual risk free return. Not a great one but not bad. If you guys see any problems with this I am all ears. It appears there will be good opportunities to roll these up or down for increased returns but I am still learning so if you have any comments on that I would be real interested. boots P.S. Yes you are correct about the higher probabilities. I did not word that well. I use the probabilities and the risk to come up with the Expectation so both are taken into account.
What's the best way to exit a collar if the puts are ITM? Exercise or sell the puts? Or does it depend on if you want to keep the stock or not?
Are (were) you quoting the bid for the call and the ask for the put? I presently have a 7.80 bid for the call and a 3 offer for the put with a share price of 77.31.
That is actually what I was able to put the trade on at this morning at 11:05. Stock at 77.44 call at 7.9 put at 2.9 Net income was $5 at 77.44. At this point the stock is 77.30 and the net on the options is $4.8 for a 6.88% return and a MAX loss of Zip. Might be able to leg in and do alittle better. boots PS Just did one on RIMM for 9.08% but it is not a Zero risk (.28 potential loss)