Options/share trading

[Ozzyrenovator]

Hi the reason I am posting this on a property investing forum is because that's what I am and that's what I can relate too, property investing.

I want to expand my investing context and learn about option and share trading. I know I could go to the local stock broker and get told to buy and hold for the long term but that is not what I am interested in. I do not want to invest in the share market I would to trade. Perhaps replace my current income with this method.

If there is anyone in adelaide who does this preferably as a full time "job" I would appreciate it so much if you could contact me discuss my options. I would love to meet in person and be shown the ins and outs, do and don'ts of this form of investing. I am a quick learner and my mind is completely open.

Any help would be great.

Kind regards. Michael cole

 

[Gremlin]

Sounds great! What could possibly go wrong?!?

 

[TPI]

I'm not a huge fan of options trading, to me it is just another job, albeit one that you can do from home at your own hours.

But anyway, this website is a good starting point for options trading:

www.lowriskincome.net

For share trading in general I would start here:

www.bwts.com.au

Hope this helps.

 

[D.T.]

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.

 

[Deltaberry]

From your post, you obviously don't know anything about options or share investing.

Therefore, if you make money, it's because you're lucky. If you lose money, you deserve it.

Not having a go at options trading - I know at least 3 friends who've made millions before 30 (one in fact worth $20m+ now), but these guys started their careers as professional options traders.

 

[Ozzyrenovator]

Thanks for the positive and helpful information. No thanks for the pessimist and negative posts. Obviously your frame of mind is one of loosing an playing things safe and secure. Which I'm sure you will end up, safe secure and average. I'm looking to move beyond being average and although from my post it is obvious I don't know much about trading, as stated I'm very keen to learn and have an open mind. Something perhaps some of you could try.
Thanks again for the POSITIVE feed back.

 

[Deltaberry]

Being open to criticisms is a pillar of success. Talk about being average your whole life.

 

[Ozzyrenovator]

Ah yes I could only agree. But someone who can only criticise and not follow up with helpful and useful information or guidance is only being negative. Not useful, an that doesn't help anybody

 

[The Y-man]

I want to expand my investing context and learn about option and share trading.

You've asked 2 vastly different things there - Share trading and options trading is not the same, and uses very different strategies.

Suggest you start by reading all the books by Louise Bedford, Darryl Guppie and Guy Bower.

The Y-man

 

[D.T.]

Thanks for the positive and helpful information. No thanks for the pessimist and negative posts. Obviously your frame of mind is one of loosing an playing things safe and secure. Which I'm sure you will end up, safe secure and average. I'm looking to move beyond being average and although from my post it is obvious I don't know much about trading, as stated I'm very keen to learn and have an open mind. Something perhaps some of you could try.
Thanks again for the POSITIVE feed back.

"hi i want to hit nails with the claw side of the hammer"
"no i recommend you use the correct side of the hammer"
"stop being so negative"

 

[Ozzyrenovator]

Thanks for your helpful advice. Y man.

 

[The Y-man]

If there is anyone in adelaide who does this preferably as a full time "job" I would appreciate it so much if you could contact me discuss my options. I would love to meet in person and be shown the ins and outs, do and don'ts of this form of investing. I am a quick learner and my mind is completely open.

Any help would be great.

Kind regards. Michael cole

Get me a return flight to ADL, put me up in a (decent!) hotel for a night, pay for 3 meals and you have a deal

(Hey, and it'll probably cost you less than going to a trading seminar!)

The Y-man

 

[Deltaberry]

Ah yes I could only agree. But someone who can only criticise and not follow up with helpful and useful information or guidance is only being negative. Not useful, an that doesn't help anybody

Trust me, if I was your father, I'd point you in the right direction or at least get you a job in an options trading shop.

 

[slammindan]

If there is anyone in adelaide who does this preferably as a full time "job" I would appreciate it so much if you could contact me discuss my options. I would love to meet in person and be shown the ins and outs, do and don'ts of this form of investing. I am a quick learner and my mind is completely open.

It's unlikely you will find a trading mentor that will help you out of the kindness of their hearts, it doesn't work this way. You will ultimately need to pay $$ for some one to train you or $$ in losses to the market in experience (likely both).

There are plenty of people/organisations willing to take your money with the promise you can be a full time trader with their unique trading system with only a $20K trading account. They are usually the ones making the money.

Read up on some of the authors Y Man has mentioned, start small & use stops. I'd stay well away from Option/FX & leveraged products like CFDs. If you can't profitably trade 'vanilla' stocks you have little/no hope with other varieties.

If I was a young fella & very keen I'd take Deltaberry's advice & look for employment in the areas you are interested in. At least then you are risking someone else's $$ to learn and getting paid handsomely to do it.

 

[The Y-man]

start small .....

Slammindan just reminded me of something.

Ozzyrenovator - Shares and Options trading IMHO needs a fair whack of capital to make it work profitably due to transaction costs - so starting "small" is quite difficult.

Despite what people think, it needs about the same capital as a deposit for an IP.


What sort of capital have you got to play with?

eg let's say you go with a discount broker who charges $20 per trade for shares and $40 per trade on options.

You decide a covered call is the way to go.
Share XYZ is trading at $3.50 today and the call premium is $0.04

That means you need to write 2 contract before you even make money form the call option (you receive $80 less $40 fee)

That then means you need to have 2000 shares of XYZ as collateral (i.e. $7,000 + $20 fee)

So this is about the smallest capital you could start on (plus contingency) - and that is only on one share!

While other may argue spreads can be constructed without capital up front, things can get very ugly quickly (eg on side of the spread exercised and price changes before other leg exercised). Again, you may have done a spread on 10 contracts to make it worthwhile over the fees and find yourself with a margin call for tens of thousands of dollars (and they need to be settled that day).

Not trying to scare you off, but that is where the difference between the theoreticals in the books and real life is - and why people like Delta tried to deflect you off.


The Y-man

 

[Deltaberry]

I was considered being a professional options trader and taking up an offer to get paid to gamble, but couldn't be bothered moving to Sydney where this particular grad job (and all other options trading grad jobs) were.

 

[slammindan]

Yman is right. To make significant gains and use appropriate risk management you will need a significant amount of capital. Although at a minimum $20K (& risk $400 a trade) would be enough to learn the ropes and not blow up....immediately anyway .

 

[Telejazzer]

Hi the reason I am posting this on a property investing forum is because that's what I am and that's what I can relate too, property investing.

I want to expand my investing context and learn about option and share trading. I know I could go to the local stock broker and get told to buy and hold for the long term but that is not what I am interested in. I do not want to invest in the share market I would to trade. Perhaps replace my current income with this method.

If there is anyone in adelaide who does this preferably as a full time "job" I would appreciate it so much if you could contact me discuss my options. I would love to meet in person and be shown the ins and outs, do and don'ts of this form of investing. I am a quick learner and my mind is completely open.

Any help would be great.

Kind regards. Michael cole

I don't know what would expect on a property forum with this question but since I have some experience in trading, particularly options, I would like to offer my point of view.

I traded full time for about a year. I found that while it's easy enough to make around 25% pa on your capital, you need quite a large one to live off it. So to make around $50k, you need around $200k capital. If you want to make more than 25%, then you need to take more risk, and in trading, the more risk you take, the more you're likely to make a mistake and it can be extremely stressful.

I do like it and would like to do it again and that's when I have play money and when my kids are grown up.

You can take Y-man's advise and read Bedford, Guppy, Bower. There's also plenty of resources online that you can research as well.

Good luck!

 

[xanh]

Michael,

To be good at trading takes a lot of time/study and usually money. Its unlikely you would find someone who can teach you all of it. Maybe a crash course, but you can find stuff on the net and there's plenty of good books available.

You do need a lot of capital if you want to day trade and use the profits to live off.

If you are interested in trading, read heaps, work out some sort of strategy and trade it on 'paper'. Its gonna take some time so you can be saving some capital in that time.

But don't let my (or others) posts put you off. Like PI, it can be a tough road but well worth it in the end.

Perhaps tell us in a bit more detail whether you want to trade or invest, what you expect out of it and what amount of risk you'd be comfortable with. Then we could give some more specific advice.

 

[pinkboy]

Jump on CMC Markets ($10,000) or Plus500 ($25,000) and open up a 'Demo' account. That way, you can paper trade, but live with the demo money. When you are comfortable after you have read everything and mastered the demo account, you can activate a live account, and away you go!

pinkboy