July 19, 2005

• The stock market has always terrified me. I keep telling myself that my conservative little T-Bonds will see me through retirement. But this is interesting, thanks, I'll try to educate myself a bit.
• I'm with cynnbad. I had a conversation with an investment professial in which he tried to explain to me what a SPYDR is, but it didn't work too well. I'll be bookmarking this one; perhaps in a few years I'll have read all the articles & taken a course...
• Options trading insn't investing. It's speculating, which is just gambling without the green felt and free drinks.
• Well (trying to not get too defensive), if you read my post, you'll see that I'm trying to point out that options speculating runs a wider risk spectrum then stock trading alone. If you own stocks (to make money, you know, for investing)... you'd be a fool to not at least look in to options. And, maybe I should have included a disclaimer. I am not a professional and am not advising anyone to do anything with thier money. Geez.
• Zzzzzzzzzzzz.... Wha?.... Huh?? Oh. /rampant buggery
• I am afraid of anything I don't understand. Options is (are?) one (some?) of them. Probably all the more reason to read these links.
• My comment wasn't meant as a snark. I invest in stocks, but I'm more inclined to search out undervalued stocks and hold them long-term until things normalize. The only reason that's my strategy is because it takes a minimum of time & energy. Short-term trading and options markets require a lot more research and dedication to the task. That's not to say it's bad...it actually makes a good hobby if you're into that kind of thing. I guess it all depends on your investmant goals and time-frame.
• Ahh, I see (guess I was being too defensive). But anyway, typically, researching options (at least for equity options) is exactly the same as researching stocks, since the options value is directly linked to its stock's value. In your example of buying stocks and holding long term, you should investigate writing PUT contracts on the stock you picked. You'll thank me.
• As I said...it just adds to the work involved. If I successfully identify a "value" stock, I don't really care how long it takes to achieve it's potential. It could take years (as is probably the case for Nortel), but I can wait it out. Options, on the other hand, have that pesky expiry date to worry about, which, in my mind, just adds to the risk.
• Insomnia cure.
• I actually find this stuff pretty interesting. I spent many an hour at my last job standing in a grain options pit chatting with the traders. Anyway, techsmith, would you mind explaining why selling puts on stocks you're holding long term is a good strategy?
• The biggest problem with trading options is the complete lack of understanding by the general public. [Disclosure: I actually am a professional options trader.] Unless you really understand what you're doing, you most likely will lose your shirt, and might as well go to the casino. (In fact, you should definitely go to the casino. Wall Street isn't going to comp you a free room and meal if you make a lot of trades.) If used properly, options can make you a lot of money with little risk. It just takes a lot of learning to actually understand all the nuances. The buy-and-hold strategy is simply not what options are designed for, yet that's the only strategy most investors ever employ. The other thing to keep in mind with options is that the commissions really are horrendous. On cheaper options you may end up spending 50% of your investment solely on the commission, which goes to the broker whether you win or lose. If you really want to understand options from a professional trading perspective, this book is a must. It's not exactly exciting, and can get a technical as far as trading terminology, but it's the best book out there on the subject by far.
• would you mind explaining why selling puts on stocks you're holding long term is a good strategy? My intent was to encourage anyone wanting to buy-and-hold a stock to instead sell puts on the stock you want to aquire (not on stock you already have). You get to name your buying price, when you're going to buy it, and get a small commision on that. There's no negative side to the expiration in this case, as was suggested. In fact, that's the plus. Of course, the stock could still go south on you, but you have that risk either way. I suggested this strategy because it's a very simple one to get started with.
• Speculating requires nerve and an attention span. I have neither, at least in terms of finance. I make enough poor decisions on a day-to-day basis that I have a portfolio full of sneering co-workers, unsettled and unfunded trust funds, and a confusing menu of questionable debt. My idea of speculating is going to the nearest res and blowing through two rolls of quarters. But still, I'll take a look.
• ... but thank the stars that I've gotten by so far. I think what I need is one of those personal managers who handle *everything*, so I can resume my trance.
• Jeeze guys. I'm trying and everything, but I'm having a real hard time jerking off to this.
• Nickiepoo, we're talking money here. Don't forget, you can use it for wallpaper! (Goddam shaddup so I can pump these people for tips -- on anything, I don't care by now) ... and if you really want to jerk off, I have a great recipe... but where do I post it? The ingredients are in season ...
• You know, jerk off is a recipe term. It has spices and everything.
• Well, let's just say I've got my own recipe. Mulch!
• Too busy playing online poker to read this link....