Peter Spann Strategy, anyone made it?

Peter Spann is a bloke who has made it, he has runs on the board. He stands up to the fast balls & the spinners. Something not many of us have the courage & confidence to do - nor the credentials.
Do I invest with him - no. Have I considered it - very much so. Do I value & place stock in his opinions - mad if I don't.
After much research, I made a choice between Peter Spann & Steve Navra - went the latter but it was a close call thing. And neither of these guys have all the answers - who does?
So constructive critisim please, we & he deserve better.
 
All I am suggesting, is people get a much more detailed and stronger foundation of options theory than Spann seminars before trading. The last 4-5years have been good to covered call users, times aren't so easy now for that particular strategy.

Well, here's the thing - I haven't presented this strategy in a seminar for many years and, with respect, if you had read my posts in this thread you would understand why – stated simply – the vast majority of people are just not suited to the world of options trading regardless of the strategy.
I still believe the overall strategy that is the subject of this thread – originally put forward by me over a decade years ago - is viable, however I don’t promote it anymore for the above reason.
And for the record I would be horrified if somebody sold their house or mortgaged their house to do ANY options strategy without being a highly experienced and successful trader – that is not what I advocate today if indeed I ever did.
 
Im with Rambada, I appreciate you sticking around Peter and always enjoy getting opinions from people with a bit of a profile as well as the others who are here to learn and benefit from each other and the collective investing conciousness.
 
I still believe the overall strategy that is the subject of this thread – originally put forward by me over a decade years ago - is viable
Yep, I agree it is a great way to finance IP's, IF you know what you are doing

And for the record I would be horrified if somebody sold their house or mortgaged their house to do ANY options strategy without being a highly experienced and successful trader – that is not what I advocate today if indeed I ever did.

Peter, it took some convincing...I should show them your post.

Cheers
 
Thanks for sticking around Peter, appreciate the input. Love the seminars but unfortunately I'm out of cash to invest. Waiting patiently for these IP values to take off.... might be waiting a while....
 
I still believe the overall strategy that is the subject of this thread – originally put forward by me over a decade years ago - is viable, however I don’t promote it anymore for the above reason.

Bit egotistical of me quoting myself I know but I just wanted to make a clarification and the time for an edit had passed...

I do not present the Buy Write or Protected Buy Write in seminars any more and have not done so for some years.

I agree that all options trading requires a high level of skill for the trader to be successful and a seminar could be just one minor piece of the puzzle.

Having said that we have 2,700 or so broking clients many of whom are actively trading - we talk to those people and communicate by email regularly of course and as part of that "promote" various strategies including the buy write.
 
Peter, so you still find the buy-write stratergie a viable one? As the returns on the macquarie buy-write fund is nothing special. And this is run by 'experts'.
 
I have used it and my clients have used it for many years. As part of an overall investment strategy it can work well.

I think people's expectations of it have been too high.

The hype of seminars didn’t help. Especially some of the other “promoters” of the strategy. If I had my time over I would have presented it differently or not at all. As I have said before I assumed because I found it easy others would too.

It's really designed as an income enhancer for share investing over an extended period. So if the “normal” income from a share was about 7% the buy write could push that to (say) 14%. This is fairly easily achievable and over the long term a profit enhancer.

It’s when people expect 20%, 30% and more or when people think it is the answer to life the universe and everything that the strategy fails to deliver. Those types of returns are possible but only in experienced hands and at a much higher level of risk than most people should be taking. And at those levels of return I would grant that an experienced trader could use more effective strategies to deliver the result more consistently and with less risk.
 
Thanks Peter. I have found that you would be better off selling puts rather than buy write.. selling the put is essentially the same risk as buy write, but without having to hold the stock and pay interest on stock holdings. Would you agree with this?
 
I have found that you would be better off selling puts rather than buy write.. selling the put is essentially the same risk as buy write, but without having to hold the stock and pay interest on stock holdings. Would you agree with this?

Yes - in theory

No - in practice

I have commented in detail on my reasons in this (or another thread)
 
Now, now, let's not get to cynical - that's a function of not keeping the website up to date.

But thanks for pointing it out - I'll make sure it's corrected.


Mind you over a 3 year rolling period the performance of our blended portfolio is still positive.

And to the original poster, wouldn't you be looking at 5-7 year timeframe anyway?
 
Thanks Peter. I have found that you would be better off selling puts rather than buy write.. selling the put is essentially the same risk as buy write, but without having to hold the stock and pay interest on stock holdings. Would you agree with this?

It is not the same, despite whatever reasons you can come up to convince yourself it is.
I dont want to turn this into an option trading forum but I believe some pictures may help.
Ill make this my last post ever for this thread.

Buy write is a synthetic bull spread - limited loss and gain - 1st Image

You could achieve the same thing by selling your short put and buying a lower strike put. This way you avoid having to pay for the stock - much better margin requirements. 2nd Image.
Same payoff, different management technique.

Selling a put is - limited gain and UNLIMITED loss - 3rd Image
The market tends to have a propensity to crash to the downside, so your short put will take a hammering if that eventuates. Limited short premium strategies are better for survival in the long run.

Again the lack of understanding/ignorance of risk is worrying.

Peter Spann said:
And at those levels of return I would grant that an experienced trader could use more effective strategies to deliver the result more consistently and with less risk.
True

Anyways --- good luck to you all
 

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interesting to read Peter's change in feelings toward property , I would love to know whether the Somers' have had a change of opinion since the last book I read ?
 
mercurio, you have not described what is widely accepted as a buy-write. A buy-write (also called covered write) is almost universally known as buy the share and write a call. See the asx website investor info for more info. You have described a promoted version of it (Peter and others) that also adds a long put.

What is widely accepted as a buy/covered write does have the same payoff diagram as a put. You also incorrectly descibe losses as unlimited. Your graphs are too 'zoomed in'.The risk is actaully less than standard share ownership as possible loss is limited to the price of share minus the credit for the put. You may be confused with naked calls, which do have unlimited risk.

Again the lack of understanding/ignorance of risk is worrying.

Yes I agree...
 
mercurio, you have not described what is widely accepted as a buy-write. A buy-write (also called covered write) is almost universally known as buy the share and write a call. See the asx website investor info for more info. You have described a promoted version of it (Peter and others) that also adds a long put.

What is widely accepted as a buy/covered write does have the same payoff diagram as a put. You also incorrectly descibe losses as unlimited. Your graphs are too 'zoomed in'.The risk is actaully less than standard share ownership as possible loss is limited to the price of share minus the credit for the put. You may be confused with naked calls, which do have unlimited risk.
Apologies, I stand corrected that the naked put is limited loss as the stock price can only go all the way down to $0 less the credit --- yes I was thinking about naked calls at the time

Buy Write - Yes i described the promoted version as this is what the thread has touched on about
 
Thanks Peter. I have found that you would be better off selling puts rather than buy write.. selling the put is essentially the same risk as buy write, but without having to hold the stock and pay interest on stock holdings. Would you agree with this?

when you sell a put you are actually paying interest to the buyer of the put (this is priced into the premium you recieve) for them holding the stock, the only difference is you will be paying at the risk free cash rate as opposed to the covered caller who is generally paying for his stock on margin at the banks rate and only recieving the cash rate in his call but if he owned the stock outright he would be recieving the risk free cash rate in the call which is usually slightly better than having that money in the bank.

just to clarify

call writer recieves premium (plus cost of carry)

put writer receives premium (less cost of carry)

so in theory i would have to say no to the costs of interest side of things, unless you are buying the stock on margin or can find a bank that will pay greater than the risk free rate on your deposits then you are effectively flushing the spread between the bank rate and the risk free rate down the toilet.

and yes to freeing up the money to use on "non" risk free investments or whatever.

but who asked me anyway.
 
............ or can find a bank that will pay greater than the risk free rate on your deposits then you are effectively flushing the spread between the bank rate and the risk free rate down the toilet.

which is really stuff all compared to other pricing inputs (volatility etc). Brokerage fees? Even the bid/ask spread on the option is likely to be more $ than that interest differential you mention.....

The biggest difference between the two is psychological.
 
so in theory i would have to say no to the costs of interest side of things,

st

what part of this post did you not understand.

maybe i can spell it out for you crc was asking if there was an advantage of the writing put over the covered call in regards to saving on cost of carry. my anwser was (drum roll) theoretically no.

I have only mensioned the interest differential to cover my *** from nits like yourself not to prove that the put is superior (cost of carry wise). CAPISH!
 
I understood all of it ;)

You covered the theory very well, so I thought I'd point out some of the practical issues that may differentiate the two.

The Nit. :)

st

what part of this post did you not understand.

maybe i can spell it out for you crc was asking if there was an advantage of the writing put over the covered call in regards to saving on cost of carry. my anwser was (drum roll) theoretically no.

I have only mensioned the interest differential to cover my *** from nits like yourself not to prove that the put is superior (cost of carry wise). CAPISH!
 
interesting to read Peter's change in feelings toward property , I would love to know whether the Somers' have had a change of opinion since the last book I read ?


I would also be very interested to hear it now, since he was advocating property trusts and the like how has this been affected with the current situation?.
These guys all jumped ship from real property for the stock market?, holy moly.
 
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