Trading Options Conservatively

Posted by John Wells on 5:05 am. Filed under Day Trading, Photo Gallery Category. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

Trading Options Conservatively is important
Hattery says: Time for you peons to learn a little bit about how to become a man and trade options. Notice while I do think trading options mean becoming a man, that doesn’t mean that it should be done in a macho through all caution to the wind type of way. You are not trading options just for the heck of it.

Hattery says:
Trading Options

Many people think that just because they have a slight edge means that they should risk the maximimum. They reason that it will give them the highest expected return. This may be true, but the cost is not worth it. Flip a coin 10 times and it’s probably going to land tails 5 times, and it’s not that unlikely that it lands tails 4 times in a row. If you lost 20% of your money on a trade and you lost 4 trades in a row, that’s devestating to your portfolio, and your ability to gain is less

Fly has said the following
Some of my best ideas were never captured because I was too busy being a cheap-ass, trying to get better prints. Or, I had a theory, but second guessed myself and ended up having to claw out of a fucking financial sinkhole. As much as I would love to ignore bad news and kick old/disabled fuckers into active battlefields, I must—PAUSE—here for a minute and observe what the fuck is going on.

Banks are not lending, because they do not have a reason to lend. Why lend to you, when they can buy whole books of business, on the cheap, via the FDIC? Or, they can borrow from the Fed and buy bonds— for an easy, quick, assured return.

Much of this recovery is contingent upon a sharp improvement in employment. I keep fucking waiting for it to happen. However, thus far, all I get is Obama-talkie talkie, with little results.

While it’s true, the printing of money should, in theory, devalue the dollar, hence, leading to a rise in dollar denominated commodities. But, what about the debts? Also, how do we account for European debt? All in all, the market is one big scrambled egg, with fuckfaced cooks throwing shit in the pan— mixing in onions, meat, cheese and now FISH. The fucking omelet, for Uncle Robert the Trading Robot-God’s sake, is disgusting and I want no part of it.

The latest salvo out of the Fed (raising rates) screams desperation to me. I do not see the need for the Fed to raise rates in an environment where fuckers from Ohio are living off government cheese, working at Burger King Holdings, Inc. (BKC: 18.22 +0.50%) . Sometimes it’s important to think crazy; and right now, I’m off my meds.

Let’s assume the Fed knows there isn’t enough buyers for government bonds, throughout 2010. Most people think rates will be forced higher, in order to lure desperate Chinese men back into the fold. Really? Do you really think 1-3% higher is the difference it takes to attract 500 billion dollars?

I think not. This is a political relationship, completely and utterly detached and devoid from performance review.

If the government needs money, you will provide it. They can take it from you, via tax hikes; but no politician wants to do that. Or, they can trick you into lending it to them, by way of convincing the investment community that they need a “flight to safety.” As we know by now, gold is no longer a “safety” trade. It’s more of a reflation trade, very sensitive to the whims of the dollar. The only real safety trade is (TLT: 90.47 +1.56%) .

I don’t know. All I know is, someone just threw a giant fish in my fucking omelet and I don’t like it. Not one bit.