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Thread: options trading

  1. #1

    Default options trading

    as per subject.. anyone into that? any success story or horror stories to share?

  2. #2
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    Default Re: options trading

    Quote Originally Posted by fz30_user View Post
    as per subject.. anyone into that? any success story or horror stories to share?
    Hmm....i attended a seminar once. The speaker is very passionate about options (speaks like a motivational speaker) and he shared with us his financial success,showed us the properties he owned. He claims to have studied all financial tools and that options trading is the best way to earn money. During the seminar, he showed us his past students' trading successes and these people made huge profits (5 to 6 figure sums). His options course is expensive, i can't remember exactly how much but it cost a few thousand dollars. After his seminar,his staff will start a lelong style of enticing you to sign up and there is a "special price" if you sign up on the spot.

    Anyway,a friend of mine signed up and attended his course. She told us that throughout the week, he taught them with enthusiasm and he shared plenty of his knowledge. He even traded together with them. However he is conservative as he will stop trading after he make a small profit of maybe a couple of hundred dollars.

    I have no doubt that the speaker is wealthy (Amex titanium credit card, owns a luxurious seafront residence in Sentosa, appeared on the front cover of Millionaire Asia magazine etc..) However, i think he is kind of misleading. as he did not clearly state whether options trading made him rich. I believe he became wealthy through shrewd real estate investment and not through options trading. He probably invested the profits he made from options trading/teaching into real estate and his money grew......

    Till now,my friend and most of her classmates are still losing money. I believe the success examples showed to us during the seminar are real life cases but maybe these people are like the 10% of his total student population who managed to make a profit? In addition before they made a $100k profit in one trading attempt,how much $ have they lost previously? I think the speaker is a very good speaker and he knew how to capture the audience with the right words too. Addressing the audience who are parents, he showed them a photo of his toddler and said to them...."i was born poor but my son is born a millionaire. Everything i have is under his name." blah blah blah.....

    No, i did not sign up. I might join in the fun if i have plenty of cash to burn but i would prefer to invest in real estate.
    Last edited by cowmera; 4th December 2008 at 07:16 PM.
    I'm a cow with a camera

  3. #3

    Default Re: options trading

    Quote Originally Posted by cowmera View Post
    Hmm....i attended a seminar once. The speaker is very passionate about options (speaks like a motivational speaker) and he shared with us his financial success,showed us the properties he owned. He claims to have studied all financial tools and that options trading is the best way to earn money. During the seminar, he showed us his past students' trading successes and these people made huge profits (5 to 6 figure sums). His options course is expensive, i can't remember exactly how much but it cost a few thousand dollars. After his seminar,his staff will start a lelong style of enticing you to sign up and there is a "special price" if you sign up on the spot.

    Anyway,a friend of mine signed up and attended his course. She told us that throughout the week, he taught them with enthusiasm and he shared plenty of his knowledge. He even traded together with them. However he is conservative as he will stop trading after he make a small profit of maybe a couple of hundred dollars.

    I have no doubt that the speaker is wealthy (Amex titanium credit card, owns a luxurious seafront residence in Sentosa, appeared on the front cover of Millionaire Asia magazine etc..) However, i think he is kind of misleading. as he did not clearly state whether options trading made him rich. I believe he became wealthy through shrewd real estate investment and not through options trading. He probably invested the profits he made from options trading/teaching into real estate and his money grew......

    Till now,my friend and most of her classmates are still losing money. I believe the success examples showed to us during the seminar are real life cases but maybe these people are like the 10% of his total student population who managed to make a profit? In addition before they made a $100k profit in one trading attempt,how much $ have they lost previously? I think the speaker is a very good speaker and he knew how to capture the audience with the right words too. Addressing the audience who are parents, he showed them a photo of his toddler and said to them...."i was born poor but my son is born a millionaire. Everything i have is under his name." blah blah blah.....

    No, i did not sign up. I might join in the fun if i have plenty of cash to burn but i would prefer to invest in real estate.
    Actually he is expanding his wealth by having this kind of talk. I think he does this as it earns much more than option trading.

  4. #4

    Default Re: options trading

    There are calls and there are puts, there is buy and there is sell.

    As long as you sell an option, be it sell a call or sell a put option, you have unlimited liability. Some options are traded on a margin, in other words you are leveraged. If you see leveraged options, and the market moves against you, you can be made a bankrupt overnight easily.

    I would suggest that you do not touch them if you cannot qualify or quantify the risks.

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    Default Re: options trading

    Quote Originally Posted by obfuscate View Post
    There are calls and there are puts, there is buy and there is sell.

    As long as you sell an option, be it sell a call or sell a put option, you have unlimited liability. Some options are traded on a margin, in other words you are leveraged. If you see leveraged options, and the market moves against you, you can be made a bankrupt overnight easily.

    I would suggest that you do not touch them if you cannot qualify or quantify the risks.
    and bear, bull.....

    play only if you have plenty of cash to burn.
    I'm a cow with a camera

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    Default Re: options trading

    Quote Originally Posted by obfuscate View Post
    There are calls and there are puts, there is buy and there is sell.

    As long as you sell an option, be it sell a call or sell a put option, you have unlimited liability. Some options are traded on a margin, in other words you are leveraged. If you see leveraged options, and the market moves against you, you can be made a bankrupt overnight easily.
    I would suggest that you do not touch them if you cannot qualify or quantify the risks.
    words of wisdom.

    options are dangerous. i don't know if it's right to say this but buying options is like buying a promise/contract. promises and contracts can be broken and destroyed. likewise your investments too. (any market guru can confirm what i just said? thanks.)

    honestly, you need to enter the market with the mentality that you may lose your investments anytime. and if you can tahan losing this sum of money invested, yes, you're ready to play the market.

    don't play the market with your milk powder money.

  7. #7
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    Default Re: options trading

    i like this site:
    http://www.investopedia.com/terms/s/stockoption.asp

    anyway, are warrants and options synonyms?

  8. #8

    Default Re: options trading

    Quote Originally Posted by frametology View Post
    words of wisdom.

    options are dangerous. i don't know if it's right to say this but buying options is like buying a promise/contract. promises and contracts can be broken and destroyed. likewise your investments too. (any market guru can confirm what i just said? thanks.)

    honestly, you need to enter the market with the mentality that you may lose your investments anytime. and if you can tahan losing this sum of money invested, yes, you're ready to play the market.

    don't play the market with your milk powder money.
    Options are not dangerous. Its a misconception. You need to have knowledge and a non gambling mindset to play the game.

    Anything can be dangerous if you have no knowledge. Example, will you let a non certified surgeon to operate on you? Thats a big gamble, isn't it.

    But what is most important is that you must play this game with money you can afford to lose. Also you must be comfortable with the losses if any.

  9. #9
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    Default Re: options trading

    Quote Originally Posted by weiconghon View Post
    But what is most important is that you must play this game with money you can afford to lose. Also you must be comfortable with the losses if any.
    this is why i think it's dangerous.

    yes, everything has a certain amount of risk invovled. it's the calculated risk and risk calculated that makes things less dangerous and thus viable.

    if the TS is asking such a question on options trading, i'm quite sure he doesn't have sufficient knowledge and confidence in playing the market with options. and hence, i would tell him that it's dangerous. (sorry TS, no offence)

    i agree that options are not dangerous if you've done your homework and know what you're doing. but if you don't, options are like betting on the underdog just because the odds are higher.

    all tests in life are simple if you know what you're being tested on.

  10. #10

    Default Re: options trading

    Options are primarily designed as a form of hedging tool for ones stock portfolio. But human, being a gambler, misuse it. Thus there are horror stories of people losing big amounts of money. Hence, the misconception.

  11. #11

    Default Re: options trading

    Quote Originally Posted by frametology View Post
    i like this site:
    http://www.investopedia.com/terms/s/stockoption.asp

    anyway, are warrants and options synonyms?
    not exactly, depends on the terms of the warrant. you don't want to learn about options by associating with a warrant because the risks are entirely different.

  12. #12

    Default Re: options trading

    Quote Originally Posted by weiconghon View Post
    Options are not dangerous. Its a misconception. You need to have knowledge and a non gambling mindset to play the game.

    Anything can be dangerous if you have no knowledge. Example, will you let a non certified surgeon to operate on you? Thats a big gamble, isn't it.

    But what is most important is that you must play this game with money you can afford to lose. Also you must be comfortable with the losses if any.
    rubbish lah, options, especially derivative options are classed as high risk products. all derivatives are high risk products.

  13. #13

    Default Re: options trading

    To me, options is not much diff from warrants & rights. There's expiry date & exercise price (correct me if i'm mistaken). All r hi risk investment like obfuscate said. Some books (eg. rich dad poor dad) make options trading looked safer & easier but it isn't. Options r tied/tagged to the mother share, so market fluctuation applies.

    Simple logic: if its so easy to make money out of options & everyone makes, who's going to lose money for the gainers? Econ 101: Someone gains is another one losses.

  14. #14
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    Default Re: options trading

    [QUOTE=nightpiper;4582398]To me, options is not much diff from warrants & rights. There's expiry date & exercise price (correct me if i'm mistaken).[QUOTE]

    i thought so too. ha.

    and yes, one's gain is another's loss.
    Last edited by frametology; 5th December 2008 at 12:20 PM. Reason: typo

  15. #15

    Default Re: options trading

    so anyone has first hand experience on it? which broker do you use?

    i trade in nasdaq for 2 years and burned quite some money already so i can say my risk tolerance is higher now

    now i'm considering investing in this options trading because it looks promising on paper and less risky than stocks (AFAIK). need to have some plan of action before the market picks up

  16. #16

    Default Re: options trading

    Quote Originally Posted by obfuscate View Post
    rubbish lah, options, especially derivative options are classed as high risk products. all derivatives are high risk products.
    Just because its classified as high risk does not mean its dangerous. Equities are considered high risk as compared with bonds, does it mean its dangerous?

    Do you know that investor actually uses Put options as a form of hedging tool for their portfolio in these times?

    So by maintaining their long term portfolio, they are actually hedge against any short term fluctuations in the market. Even Warren Buffet uses options to hedge his portfolio.

  17. #17

    Default Re: options trading

    Quote Originally Posted by nightpiper View Post
    To me, options is not much diff from warrants & rights. There's expiry date & exercise price (correct me if i'm mistaken). All r hi risk investment like obfuscate said. Some books (eg. rich dad poor dad) make options trading looked safer & easier but it isn't. Options r tied/tagged to the mother share, so market fluctuation applies.

    Simple logic: if its so easy to make money out of options & everyone makes, who's going to lose money for the gainers? Econ 101: Someone gains is another one losses.
    Thats the misconception people have. Options are not meant to be the road to riches. Its meant as a hedging tool and it is primarily designed as a hedging tool.
    Last edited by weiconghon; 5th December 2008 at 02:30 PM.

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    Default Re: options trading

    If you know some money managment rules and uses stop loss for every trade, I can't see why people will lose everthing they have instantly. Those pp are normally the gang-ho type who wants to prove the market wrong. If you find options dangerous because of the expire date, can look at CFDs as an alternative.

  19. #19
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    Default Re: options trading

    Nowasays is there still a low risk product? Put your $$ in the bank as fixed deposit the bank also will collapse...Haaa, Time to hide some in your Milo tin.

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    Default Re: options trading

    Quote Originally Posted by fz30_user View Post
    so anyone has first hand experience on it? which broker do you use?

    i trade in nasdaq for 2 years and burned quite some money already so i can say my risk tolerance is higher now

    now i'm considering investing in this options trading because it looks promising on paper and less risky than stocks (AFAIK). need to have some plan of action before the market picks up
    wah. i like your spirit leh. what doesn't kill you only makes you stronger right?

    HAHA.

    but please, invest carefully hor. we don't know how rough this storm is going to be (or if you do, PM me and share share your insider info leh... )

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