Value for money at $97

Hi all

I haven't read all the postings on this thread, but just a few quick pointers on options

- About 8 to 10 years ago, when I got into option trading, the Sydney Stock Exchange (which the options market is/was a part of) ran free courses on option trading. I found it an invaluable course back then. Check out your nearest stock exchange - they'e probably got such a thing.

- You are basically betting on price volitility

- Yoy NEVER actually own any shares. You are simply buying a right to buy or sell a parcel of shares at a designated time, usually in 3 mth increments.

- Your downside is actually minimal - all you can lose is your premium, unlike say the futures market, where your down side is unlimited.

- Don't let anyone convince you it's some form of new, wiz bang, magic money making device. Options trading on shares has been around for decades. Like all things, you pays your money, you take your chances !

FINALLY - do make sure you contact your nearest stock exchange. Even if they don't do free cousres, they would have tons of free literature, and there's nothing like getting it srtaight from the horses mouth, so to speak !

Cheers
JamesP
 
I have done a course with Carlo Castellano in option trading. I found it to be a very informative introduction to options/share market. Options trading is all about psycology of trading and the time spent mastering both that and your understanding of the market. There is no secret formula, what works for one will not work for another. You have to find the strategy which works for you in the share market. High risk = high return which can also = big losses :eek:

As far as Carlo and the ASIC investigation goes...to my knowledge he was investigated as he was seen to be giving specific financial advice without having the license to do so. He has since obtained the respective license to do so.

I have not seen a presentation by Dymphna but know of her. Apparently she copied the course content of another asset protection/tax minimisation "guru", namely Ed Burton. :rolleyes:
 
Long Post Warning

Nobleone,
Have done a little bit of options in the past, you need to read anything you can get your hands on & then once you’ve developed sufficient skillset decide how you want to use options i.e., for hedging an existing portfolio, share leverage tool based on direction, or play the tool itself (Bull Put Spreads, etc).

Most courses are just going to teach you what you can get from a book, as a starting point buy the book “McMillan – Options as a Strategic Investment”. Prior versions of this can be bought dirt cheap (mine cost $3 U.S. a few versions out of date :p ) & the updates aren’t really required unless you’re planning to become a licensed derivates dealer & need the current version. Current versions cost $140+. It’s a great reference tool but also a cure for insomnia & has a LOT of stuff you don’t really need to know but every strategy you need to know (& what these guys will charge you for). :eek:

Also, read other forums, Incredible Charts has some interesting stuff, Optionetics have a forum, even 21st Century recommends some strategies based on browsing their forum & watching the DVD. Get an e-book trawler & search the net for free stuff. Mate uses ‘edonkey’ & has got me some great stuff. There’s a HEAP of companies just itching to take your money off you, not saying they’re bad, just know what you’re expecting from them if you do decide to join a group.

Watch the options market a bit to get a feel for how it moves, people get blinded by greed & go wow I can buy 1000 ANZ shares for $20.70 & hope it goes up to $22 & earn $1.3/share or $1300 (6% return)
OR, I can but an April $21.00 Call for .24/share ($240) & if it hits $22 by 28/4/05 (expiry) it’ll be worth at least $1 & I’ll make a minimum $760 (300% return). So greed becomes a big factor

If you’re a directional trader i.e. you think XYZ is going up/down you can alternatively use margin or CFD’s until you get the feel for trading, then look at options.

Just to put options in perspective I’ve had some good trades, & some bad, my style was based on direction although I’m considering some tool based plays. My worst trade was when the stock dropped 0.2% (YES zero point two percent), in TWO days & I lost 87.5% (YES eighty seven percent) of the value of my trade. Now I know that buying an out of the money option, just before Easter is a REALLY silly thing to do, then I didn’t. :eek:

So options can bite, they have time decay ie. They reduce in value daily no matter what the share does, they have volatility which can change, this can make them over priced or underpriced. If you buy overpriced the stock can go up (stock is also called ‘the underlying’) & your option doesn’t budge due to reduced volatility & time decay.

I know a guy who’s been a professional options dealer for over 15 yrs, but couldn’t make it on his own as a trader, so it’s not money for jam. I also know a few options & futures dealers who make fortunes from trading, so it’s possible.

Advice,
1. Money Management Money Management Money Management
2. Treat it as a business i.e keep accurate records, don’t just jump in, know what return are you expecting & why
3. Start small & accumulate. If you turn $5k into $10k, don’t assume you’re a genius & throw another $50k into your trading account. If you turn $5k into $1k, trade the $1k (also learn to paper trade & back test strategies).
4. Read as much as you can, go to free info seminars, etc. Once you know a bit you can ask these guys “what strategies are you going to teach me” & get them to justify why you should pay them $$.
5. Get Mark Douglas- The Disciplined Trader & read it at least 3 times, it’s all about the phycology of trading. I’ve already recommended McMillan for the strategies.
6. If you decide it interest you & you enjoy it, keep going, if you don’t give up, & learn from your successes & mistakes, you’ll get there.
7. Decide what sort of trader you want to be i.e. do you want to sit in front of the screen most days, or set a trade & walk away. This will influence what style/strategies you should be learning
8. Software doesn’t matter, software is a tool to support you, nothing else. If you’re no good, the best trading platform/analysis tools in the world won’t save you.
9. When you can read a share forum & realise 90% of the poster don’t know what they’re talking about you’re probably just about there.
10. Share/Option/Futures trading has only one rule – You don’t have to be right, you just have to win

Hope this helps & Good luck. :D

Cheers
Mark
 
Hi Mark,

Now THAT was exactly the type of post I was looking for... You have given me some very good food for thought with your post so a big thank you.

At the moment with my J.O.B. I sit in front of a PC 8-hours a day in my home office and there's no way I can make my fortnightly pay check any larger.

So I figure if I put those amount of hours into researching, learning and trading then it's got to be better than my J.O.B.

With regard to money management I am VERY controlled and able to stick to the rules and parameters of any plan I put together for trading.

I expect the time frame from now until my first real trade will be anywhere between 6 and 12-months.

Anyway thank you for your informative post. Does anyone else have any more to add?

Cheers, Nobleone. :D
 
Nobleone,

I would recommend you find a really good options broker to give you as much info on the underlying stock as possible and any option strategies. As an ordinary punter, you don't know what the professionals do and usually when the info gets out to the market its too late for us ordinary investors. Charts, technical analysis and especially momentum indicators are laggards of market trends. I think they work for medium term positions with futures or FX but usually too unreliable for stocks. Learn about theta or time decay and utilise both buys and sells to limit your upfront cost. Have a clear objective and always put in your stop losses. Once your view is incorrect, then you need to be disciplined enough to cut your positions. As others already pointed out, options will magnify your losses. If you want to hold a position for say a month, go for longer term options if buying but if selling, go shorter term to take advantage of your theta. Forget about fancy strategies like butterflies and condors or even ratios and spreads. By the time you pay brokerage, cross spreads to get in and out, it leaves very little for profits. Be disciplined with your paper trades, stick with your underlying stock view and see how you go. Pure options traders only use options to trade volatility. Hardly do they ever use it as leverage as they can get cheap access to funding anyway so will just buy the stock outright if they had a delta view. Since most of us ordinary investors wouldn't be buying in size, we're merely using it as leverage to gain an exposure to the underlying stock price. If you can, it would help to keep track of the historical volatility of the underlying stock you're trading as I wouldn't be buying options if volatility was at an all time high when professionals are probably selling it on the other side. Problem you'll find is that not many brokers can give you an accurate volatility number as they don't have systems to track that. Only the proprietary traders at the investment houses have access to these. Not trying to put you off but please learn as much as you can before placing your first trade. Remember, you're in the market with all these other professional guys who do this full time. For every option you buy or sell, they are most probably on the other side - trying to make a quid off the market too. Good luck.
 
Nobleone said:
Anyway thank you for your informative post. Does anyone else have any more to add?
Click to expand...
Another thing I found v. instructive was to get a real-time feed of option prices. So when the stock price moves, you can see all the option prices move. It's a lot easier than working out 50 Black Scholes equations in your head every second. A live feed with cost less than $80pm. Try watching for a day to get a feel for how much leverage any option can offer. An example above showed a tiny underlying move can make >100% difference in an option - it happens all the time. You must be prepared for a large profit to disappear in seconds.
 
Hey, the guys who know what they're talking about have finally come out....time for me to be quiet :eek:

For live option prices I found AOT pretty good with their on-line platform,

To analyze volatility & learn about pricing changes Hoadley has some great stuff, you can also use his model for analyzing trades i.e. 'what if analysis' & he's got a historical volatility model (used to have to pay $30 odd for it) so you know how the option is priced in regards to it's history (volatility & underlying price related).
http://www.hoadley.net/options/options.htm

I'd recommend keeping your job until your income from this business has provided you with both trading capital & a minimum 6 months living money. If you try to make a living from trading while living off equity you'll learn a heap, but it messes with your head big time. If you've also got a family to support it makes it really interesting :rolleyes: But that's just my head space, so it's your life & money. I've seen a LOT of people try to make a living off this, I've only seen a few succeed. The one's that did succeed didn't give up.

Cheers
Mark
 
MarkR said:
http://www.riskdoctor.com/books.html

If you can read this without your head hurting you really know your stuff !
Click to expand...
Mark - you really know how to kill a thread, suggesting people read stuff like that:D.

Try reading the attached (downloaded from stressfreetrading.com). It's not specifically about options, but IMO is sound advice about trading.

Section 1. Take Complete Responsibility & Section 2. Have a System that Fits You are both mandatory reading for anyone considering buying someone elses black box or course.
 

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  • 7HabitsOfSuccessfulTrader.pdf
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I've just done Financial Mastery in Melbourne.
As many of you know, I've been around investing for quite a few years, and have done lots with both shares and property, let alone read bucketloads of books and attended heaps of introductory nights (and even one 3 day course!).
All I can say is - that would have to be the BEST $97 I have ever spent. I still can't believe they had so many fabulous speakers on so many subjects for such a measly amount of money. I'm stunned there weren't THOUSANDS of people there.
I certainly learnt lots, and yet I would have to say that none of the investing topics were really "new" to me (except for internet marketing).
But for someone who was a lot newer to investing, it was a fabulous opportunity to find out about a whole range of strategies, so that you then had the information available to decide which one was right for you.
Yes, each speaker had a product to promote, but in an average 2 hour talk, it was usually only for 5 minutes at the end. And if you had any plan to buy any of their stuff, they certainly were offering some impressive deals.
And I know one thing - if they run it again, I'll pay the $97 again and be there. Even if I hadn't learnt a single thing from the speakers, it would have been worthwhile just for the opportunity to network with other investors and chat with the presenters (most of whom were there for the whole weekend and fully available to talk with).
Brilliant! A big thumbs up from me!! :D
I just have to wait for my brain to stop buzzing with all the ideas in there right now.... :p
 
KeithJ - 11/10 for that .pdf. It's probably the best single thing I've ever read on trading & is so true & simply put that it had me reviewing what I do immediately. I've already given it to 3 friends with the comment 'MUST READ' written on it

Yes, sorry for the thread killer :D but the original question was specifically about options & that doc provides everything you need to know about options & more. Also, if you can read it, & understand it, then you're not going to get the wool pulled over your eyes. Then again there's a lot of people making money from options who don't even know how to price an option & just know their little bit really really well, bit like property really :p

Nobleone, that brings me onto a piece of advice I got a few yrs ago, learn one thing really well, then move onto the next thing. Most people try to know something about everything & end up getting confused/disheartened. If you learn one thing well, & can implement that one technique/strategy, you're already ahead of the pack. The you just progressively add to your toolkit. Read keithj's doc a few times & keep it handy so you can re-read it every few months, you'll get the picture as you go.

Cheers

Mark
 
Brief synopsis... hmmm... that's tough! But here goes....
This isn't quite the order they spoke in, but I've grouped property and share speakers together.

Dymphna Boholt - often mentioned on this forum, she did 2 sessions, one on asset protection and taxation - excellent stuff. The 2nd session was about her experiences investing in property, mostly cashflow positive stuff. Excellent.

Rick Otton - lease options. As Rick's my mentor, I'm biased, and thought his talk was great! Certainly the information on sandwich lease options was excellent, although I think a few newbies got a bit lost at that point.

Sam Vannutini - renovations. A good presentation, lots of common sense ideas. Possibly more aimed at newbies again, but I still picked up a couple of good thoughts.

Peter Comben - developer. Probably not enough "nuts and bolts" for me, but certainly a good overview of being a developer. Some interesting case examples where creative thinking really improved the deal.

John Price - long term share investor. It was interesting to see a great deal of Warren Buffett's investing strategies condensed into easy to understand points. Possibly a little dry to be the last presenter of the day though!

Carlo Castellano - options trader. One of the best basic level presentations on options I've seen. It would also have been beneficial for basic share trading too. He really has the ability to take something complicated and make it easy to understand. He focussed primarily on the more simple and lower risk options strategies, which I think was appropriate.

Steve Jennings - futures trader. Again, a fabulous basic level presentation on futures. Really demystified a lot of the subject, and made it clear that although some areas of futures are very specialised, there are other areas where anybody can do well. Certainly need to know more than just how to read a share chart though!

Andrew Gardner - finance broker. I admit it, I missed part of this session (busy chatting to a presenter!) but the part I saw was very well presented. Mostly aimed at people earlier in the property acquisition phase.

Ed Dale - internet marketing. Funny man! And yet very, very clever at making money from the internet. I admit this was an area I was very sceptical about, but by the end of his presentation (which although limited, was certainly enough of a start to finish example for anyone to go out and duplicate) I was impressed by the simplicity of his methods. Great money back guarantee on his products, too!!! (Yes, I admit it - I bought that one! Money back if it doesn't work, money back if it works - you only waste your money if you leave the information sitting on the shelf).

Like I said, I thought it was a fabulous weekend, a really high calibre of speakers. You certainly couldn't walk away saying you didn't understand all the most common investing strategies available (except perhaps for negative gearing!!).
 
Actually the content and the running of the event was excellent. $97 was an absolute bargain, even though I missed most of Sunday as being directly involved in Shares/Futures/Options which was the major part of Sunday just doesn’t excite me. But property is different – I can actually SEE the value when I do a reno, development, subdivision ect

I had never seen Rick Otton speak and thoroughly enjoyed what he had to say and the way he uses property as his vehicle

The interesting theme amongst most of the speakers in the property field if not all (although I missed Peter Comben’s session as I had done his course last year), was that they all took responsibility for the real estate deal directly with the Vendor and had little use for real estate agents, which I found interesting which also made obvious sense in order to get a workable deal for both Vendor and Purchaser - Rick Otton came across as an absolute master in this game. Sam Vanutini was also entertaining this theme with sourcing properties for his renovation business.

The Internet stuff I found very interesting and I have also decided to jump in, so Lissy looks as if we can egg each other on and compare results.


wombat
 
My husband wasnt very happy when he came home one day and I told him he will be going to a 2 day seminar that i have booked for him ! But i said, it's my birthday gift to him so he had to go. And he almost fainted when he read his email the next day, and found out the seminar was going to run from 7am till evening!! He has always been skeptical , thinks it's impossible, too hard , too risky to make money in property,shares etc. But I have been reading a lot on investment books and been lurking in this forum for more than a year now and have learned a lot. I have been pushing and talking to him about what i have read, but he wouldn't really take them seriously.

Then the day of the seminar came! He said, i was punishing him for sending him to this 2 day seminar. But he went anyway, with all my sweet talking, its going to be great and all. He called around lunch time, and I was hoping, crossing my fingers, that he is not going to tell me, "this seminar is boring, i am coming home now!" Prayers answered... he said on the phone, "This seminar is great!"

So there it is, a life changing experience for us, just for $97. He couldnt wait for the next day, and it seemed funny at the end of the day when he said..."You should have gone to the seminar too, it's Great". He enjoyed RIck Otton the most ! And says that when they run it again, he will be sending me :)!! We have a newborn baby, so couldn't go with him that day!

What a great way to spend $97!
 
Nobleone said:
Hi Mark,

Now THAT was exactly the type of post I was looking for... You have given me some very good food for thought with your post so a big thank you.

At the moment with my J.O.B. I sit in front of a PC 8-hours a day in my home office and there's no way I can make my fortnightly pay check any larger.

So I figure if I put those amount of hours into researching, learning and trading then it's got to be better than my J.O.B.

With regard to money management I am VERY controlled and able to stick to the rules and parameters of any plan I put together for trading.

I expect the time frame from now until my first real trade will be anywhere between 6 and 12-months.

Anyway thank you for your informative post. Does anyone else have any more to add?

Cheers, Nobleone. :D
Click to expand...
Hi Nobleone, I've used Optionsxpress.com and think it's fantastic. They've just started brokering for Aussie options. Were only US before. They're definitely not a full-service broker. Cheap though :)
Cheers,
James
 
Does anybody have a link to the Financial Mastery website? I'm not sure who runs the seminar and I would be interested in finding out more about it.

Thanks
Ecogirl
 
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