The Big One That Got Away...
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Staying in Perpetual Motion...
3 Responses to “Staying in Perpetual Motion”
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David says:
I am working on the option thing. Part of the problem in understanding the workings of the brokerages trading platforms(it would just be to easy to have a four legged entry platform with the option chain, breakeven points, and a p/l graph(which I could probably live without). Instead we have to have everything including the kitchen sink and then some. As far as the greeks go they want to make rocket science out them-ATM options are normally 50%, OTM and ITM option delta depends on ATR of the equity(volatility)(example if the equity over time does not move in price then ITM options will be almost 100% within a strike or two of the price of the equity-OTM options will be close to 10% or less within one or two strikes of the price of the equity-this is real rocket science). If a person watches the price of an equity in relation to the price of the option you will notice that most all times as the price of the equity goes up the price of the option does not follow the increase in the price of the equity-if the price of the equity is going down then the equity price falls faster then the price of the option-this up and down motion of the equity has more to do with the decrease(increase) in the time premium in the option than the passage of time(except for the guys that do calendars and the market makers figure out when all the calendar guys due there thing and then they trash the time value in the far out purchased options(LOL)). Back to the brokerages-you push credit spreads-how many brokerages allow option traders to do risk defined credit spreads-that is new account holders-beats me how many of them have new customers. I think I only know of one that allows new customers to do level four options(thinkorswim???). The last I looked at optionhouse which is suppose to one of the best they wanted $400 up front to teach level 4. And then there is an outfit wandering around that wants to charge a person in the thousands($3000 to $4000) to teach a person level four so any option brokerage will take that person on(I did not see a guarantee on their site that an option brokerage would give one of their students a level four account). And there all kinds of other option educators out in the wild(cboe website webcasts, riskdoctor.com(have you read Cottle\’s book-he states after about the third time reading it the lights just might come on), ramdomwalktrading.com(JL Lord\’s expensive books on BWB and condors-according to the index on the BWB book I can find only one section of a few pages that might mean something-have to spend the money on my cheap chevy truck before I consider spending big bucks on a book like that) and then there is Sheridan, and some outfit in San Jose, CA(more believers in the BWB), and many more-some make sense;however how much can a person do with vertical option spreads(preferably credit spreads)that cannot be put into a simple book of short duration. Sorry I am practicing my typing and in my book writing mode!!!!! PS-I have a hard time taking anything on that involves monthly subscriptions payments-just the way it is and with any course that involves credit spreads what are my chances of getting a broker to allow me to such spreads and since I am a little person at what commission cost. Someone out there in the wild blue buy Cottle\’s book and take the meat out of it and present it in an e-book that brain dead people like me can understand at a reasonable price of course(I do have parts of his book that he has let out to the public and study what is there;however I am sure it will take the whole to understand and I am working on getting the funds together to get the book from amazon(cheaper there). In the mean time I will work on the thinkorswim platform-have not figured out yet how to get to a market order-must have something to do with that little lock(LOL)!!!!
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Steve says:
Hey Jeff,
9 years ago my wife and I decided we wanted to be financially independent in ten years. Our ten year plan, that has to be completed by the end of this year, is to purchase a yacht and sail around the world with our two young children. This journey will take 2-5 years. During this time we must generate cashflow while living on the yacht, and our assets must continue to grow.
Education was the key to achieving this. All income must be able to be made from the deck of a yacht anywhere in the world.
This year is the final part of our 10 year plan. During the first 8 years my wife and I have accumulated a large property portfolio. This built assets but not cashflow.
Year 9, last year, was for us. At the start of last year I was a couch potato! We focused on our health and also started to learn about generating cashflow from stocks and options. I lost 55lbs in 3 months and now compete in 75 mile races, racing non stop for 24hrs.
I also learned about covered calls and then collars. This started to generate us a 2-3% cashflow each month. This has now led onto spread trading and you!
I believe that we must set huge goals. You need a strategy to follow and clearly defined tactics to help you achieve the goals. I also believe that great mentors accelerate achievements. I have teamed up with mentors for each of the steps during the past 10 years.
What is the goal after the sailing? a)to be able to charter a jet aircraft whenever I want to and b) donate $100k/year to charity.
To keep my momentum up I have a clearly defined and worthwhile goal… to spend quality time with my family.
Big goals = a big life!
Thank-you so much for sharing your knowledge Jeff.
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robert says:
good post jeff. if i recall correctly last year at this time you said you were determined to learn how to trade forex and perhaps would add that to your teaching platform. as a result of that i have attempted to educate myself in that area but as of yet just don’t feel comfortable in this venue. based on your success in teaching option trading do we have anything to look forward to for this year with forex?
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The Best Game in Town...
One Response to “The Best Game in Town”
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Mike says:
Greetings, I’ve spread traded much before, but have not been profitable in the long term. The thing I’ve discovered is that those who price options can skew the market to their favor, and against the retail option seller.
For instance, set up a bull put credit spread so that it has an 85% chance of success. Not much profit, but high chance of success. But when the market drops to the short strike price we’ve lost so much money as to wipe out a year or more of tiny profits.
I am considering signing up for a month with you to get your course, but could you address this issue first?
Thank you.
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An Option Traders Best Friend...
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One Year Can Change Everything...
One Response to “One Year Can Change Everything”
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Trisdee says:
I want to master ,to earn money for myself by trade in the market.
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Jeffrey
I have one for you……Im still not over this one, I bought at the money puts on the DIA when it was 14,100 And I sold them when the Dow was just under 14,000!!! And we all know what happened after that. If I would have held…..I could have been retired!!! Lol that was a whale that got away … And whats worse I had it hooked!!!!
I am right a lot but I don\’t let my winners run and I hold my losers way too long
I watched your video on credit spreads….great stuff!
John
Just a quote I read in a Book one time that as stuck with me for years. ” There is only 6 inches that separate someone who doesn’t have 2 nickels to rub together and Bill Gates, or Buffet. The 6 inches between your ears. It All based on how you think about things… So True… So True…
Jeff,
What books do you recommend on Options? I read “Get Rich with Options” by Lee Lowell. It’s a great book. Thx