Speculative Strategy

Discussion in 'Strategy Development' started by GlobalFinancier, Mar 2, 2006.

  1. I was thinking this:
    If I had $100,000 in cash, I could invest it using CANSLIM etc systems, and generate a profit in equities, like for example, 20% in 3 months when the market is good.
    THEN,I use that a portion of that 20K to speculate in options. Say we limit options to 15% of total portfolio size, then we have 18K max positions. We have 5% per position, so 6K per call. These will be speculative, but will be speculated on when the odds are highly in your favour. I.e. it's a trading/speculating method you have done well with.
    The key to this strategy, is that you don't use your initial capital when speculating in options, but you use PROFITS, and you might slice the profits into smaller pieces of cakes to be able to control risk with the options.
    I think I'll try this after getting to Canada. Get $10K, make $1K in a month or so using a method I'm highly confident in. Then speculate in options which I'm highly confident with $500. Not much, but I wouldn't risk initial capital, and grow in capital could be exponential.
    All thoughts welcome.
  2. At what age will you stop trading? How many years do you have left before you stop? Is it the best use of your time, to fool around with trading approaches that you yourself don't believe in? (if you did, why'd you ask a website full of total strangers for advice?)
  3. Lol, good questions. It depends on my life expectancy.
    I think I live healthily enough, so I should expect another 60-70 years of life.
    I'm asking strangers because I'm just looking for opinions. I want to hear someone with a good reason that refutes the strategy.
    I have a brain and I think so I don't rely on other people's thoughts(if I did, I'd be focusing on being an engineer or whatever)
    Sure it's the best use of my time,it's still in theory period anyways.
    Not to mention I'm a student and my money I trade with is SMALL, so it's more important to learn for when the big day comes--- breaking the Bank of England like Soros(maybe another central bank will be the target)
  4. GF your new friend here $CostAverageMAN

    I agree completely with your approach..We all know high risk Option Strategies are like going to Vegas..So Playing with the houses money is the only way to play...If you loose it all..You still have equity to rebuild and try again at a later time...I know you are a smart Technician trader with a global aspect of what going on in the world...So It might be quite easy for you to take the option market for what its worth...

    Just as I use my Div.'s and sell covered calls.... to purchase protective puts when the market looks scary...I consider this as free money to buy insurance sometimes...It's either protect the Port.. or let the wife remodel the living room again and again and again...

    The Market is all about reducing risk (long term outlook)..and playing with the banks money is the only way to play..

    By the way Checked the Anomoly recently, It's continued into MARCH..:D :D Had MEK in the port. (+38%) on WED. 24K on this one alone..