Options/share trading

[roe]

I am invest heavily in the stock market, options trading you need to know your stuff, most stuff they advertised on TV just forget it or whatever you read in
the magazine or some course or seminar where they said you can make this much income a month etc... there is some truth to it but mostly just to get your hard earn cash learning their course ...

Trading is not as easy as it made out to be it's fairly tough to generate consistent return....when things turn against you, you got to have the gut to
go against the trend or cut your loss and protect your capital....

also you up against computer with very smart algorithms with big money behind it...

I am more of an investor rather than traders but I do use Options to generate income but I don't trade, the way I use options are unique to me, well not so unique but most people wouldn't do what I do...I say small population use options like I do...

Share market is a fast pace game where you constantly get bombard with stuff
you got to have the know how to sort the facts from the fictions from the greed and fear.... having said that you can make some serious money if you know how...when fear takes hold you can buy some extremely good bargain

or by chance you read an article on a certain business and after some research you are confident of the business model, you get in early, you can turn hundreds into thousands and thousand into millions in fairly short time frame
about (5-10 years) ...trading wont get you that only an investors can...as traders you don't hang around long...patient investors time is his friend...

Stick to what you know best, if you know a lot about properties stay in it...don't get tempted by stuff you don't know and lose your hard earn cash..

it is not impossible or hard it just you need time to know your subjects before jump in

I know a lot about the stock market and that where my expertise stays...I don't invest in properties thought I am not clueless I know its value and where to buy and how much to pay but I don't make money out of it

I own properties but for PPOR and buying places for my kids etc...capital gain on these are bonus but if its not there is no sweat ....

 

[TPI]

Great post roe!

Can you be a bit more specific about how you use options as an investor, are you talking about writing covered calls and/or naked puts to generate income?

 

[roe]

Great post roe!

Can you be a bit more specific about how you use options as an investor, are you talking about writing covered calls and/or naked puts to generate income?

Yeah covered call and naked put and hold till expiration, I dont close the position ever..always hold till expiration and worthless for buyer...unless
the stocks turns against me in a bad way and I get assigned early..this RARELY happen and if it does part of the risk...Write next options ...

I do 3-6 months contracts depend on premium, I price my options similar to insurance when the risk and premium is not there I don't bother, but when
risk/premium justified I am in

I normally get around 10-12% a year return on premium, not counting dividend if its covered call and naked put sometimes I get double lucky as I price the stock fair well and if an options is assigned to me, price most of the time rally
and I get the capital gain to go with it.

I am of the same name on other forums but I dont usually talk about options, I try to keep strictly on stocks talk and its business because more people find it helpful that way...sometimes they are fearful of a certain event on a certain business and If I happen to be in the same business I can give them a doze or two of my take and calm them down.

some article run on people getting healthier don't eat dominos and donuts and pies ...
I said keep calm, rubbish, it doesn't show up on their number...hold your stocks dominos do probably extra 400% gain since and RFG an extra 100%.

 

[TPI]

Thanks for sharing that roe.

I was reading about using these options strategies in the way you describe them recently and can see that they have merit for some long-term investors, particularly naked puts, though I'm not using them right now myself.

 

[Intrinsic_Value]

ROE are you ROEROC on hotcopper?

 

[Aaron Sice]

Trading is just hoping the price will go up, which is beyond your control. No different to betting at the casino.

Be an investor of good quality businesses, not a trader of shares.

very different to betting at the casino.

one is luck, the other is crowd psychology.

http://somersoft.com/forums/showthread.php?t=82064&highlight=Zynga

 

[twodogs]

Trading is just hoping the price will go up, which is beyond your control. No different to betting at the casino.

Be an investor of good quality businesses, not a trader of shares.

Investors of even good businesess still only really have hope the price will go up, no body has control of that. At least a trader can profit from prices that go up OR down; and with options even sideways. All just different strategies, only wrong if they are not right for you.

Betting? Betting the good company you invest in really is good? No different than betting on a price movement and trading accordingly.

 

[Intrinsic_Value]

Investors of even good businesess still only really have hope the price will go up, no body has control of that. At least a trader can profit from prices that go up OR down; and with options even sideways. All just different strategies, only wrong if they are not right for you.

Betting? Betting the good company you invest in really is good? No different than betting on a price movement and trading accordingly.

This cant be further from the truth, there are only two times your hypothesis is correct

(a) the 'good' company turns out to be 'not so good'
(b) the price paid for the 'good company' is so far above intrinsic value, that although the company continues to be 'good', the share price doesn't reflect it because it was to high to begin with.

 

[xanh]

The way you've worked out the intrinsic value may be different to someone else which may be different to someone else and so on. So who's right? Regardless, the share price may reach that value or may not.

There's certainly nothing wrong with your methods, and if that works, that's great for you.

However, some people prefer other methods to make money from the sharemarket - just as some people prefer developing or flipping property. There are many ways to skin this cat.


Of course, you need to be careful as the cat can easily skin you.

 

[roe]

ROE are you ROEROC on hotcopper?

Yes and same nick on aussiestockforum
Sorry don't login to this forum that often

 

[roe]

The way you've worked out the intrinsic value may be different to someone else which may be different to someone else and so on. So who's right? Regardless, the share price may reach that value or may not.

There's certainly nothing wrong with your methods, and if that works, that's great for you.

However, some people prefer other methods to make money from the sharemarket - just as some people prefer developing or flipping property. There are many ways to skin this cat.


Of course, you need to be careful as the cat can easily skin you.

yeah do what you feel comfortable and have a good system/strategy to make money, someone else cup of tea maybe your bitter cup of coffee

 

[twodogs]

This cant be further from the truth, there are only two times your hypothesis is correct

(a) the 'good' company turns out to be 'not so good'
(b) the price paid for the 'good company' is so far above intrinsic value, that although the company continues to be 'good', the share price doesn't reflect it because it was to high to begin with.

Truth? I'ts just my opinion and it is no more or less true than yours. I hope you make better returns in the market than I do, I just prefer not to just buy and hope when it comes to shares.

 

[Intrinsic_Value]

Yes and same nick on aussiestockforum
Sorry don't login to this forum that often

just want to publicly say thanks for all the 'insights' you have given on hotcopper over the years.

Your posts are one of few that I take seriously. This guy is a very intelligent investor

 

[Intrinsic_Value]

as to the other posts, again I will say it for the umpteenth time.

The very first rule of making money on the sharemarket is to self analyse whether one is a trader or an investor.

The rules are not the same.

 

[Deltaberry]

If someone aspires to be a professional options/commodities/forex trader, go get a job at Noble or Optiver.

If they won't hire you after running some brain testing, chances are you probably won't do very well on your own.

A stock investor, as someone pointed out above, is a very different things. It's like comparing developers and land bankers.