Forum Replies Created
BIS MUST be right.
Why? I have shelved my higher interest rate scenario and have been modelling for steady/lower % rates.
A sure sign they are about to race up! Ahaha
Originally posted by Terryw:If you friend want to pay more interest send him my way. I can fix him up on a 10% pa interest rate. He will be able to claim a fortune!
Terryw
Discover Home Loans
North Sydney
[email protected]Terry I’ll see you the 10% and raise you to 12….haha
There is a thread on options here where you’ll learn more from than any stinkin’ seminar:
[strum][drummer][guitar]http://www.aussiestockforums.com/forums/showthread.php?t=1366
[sealed] lol
>>>Are you in ‘Wayne’s World’ or something?<<<
errr..yeah!
>>>You are right, I am wrong.<<<
I’m glads it’s settled then!
Cheers
Huge eh? Now all you need is some use for it HAHAHA
More funds to actively trade. The majority of funds are invested in long-term holds and not available for such strategies. I did a comparison a while back and found that based on consistency of returns and considering time taken to trade (unless you have some expensive software to help you), the returns worked out less.Short of comparing brokers statements this will go around in circles ad infinitum. Too much effort for no reward to explain to you, but I suggest some more study on these.
Do you not agree that higher potential returns equate to higher risk in most cases?Yes and no. Options are often viewed as high risk instruments…and can be if misused. But they were initially created as a risk LIMITING instrument and thats how I like to use them.
And there usually is more activity required. A covered call only requires placing a single order at your preferred strike price and not worrying about it until the exercise date. Remember, the underlying stock is a long-term hold so decisions should not be affected by short-term fluctuations.Didn’t you read what I wrote? – “There may be less activity than that required with CC’s”
The underlying is only a long term hold if you are never assigned, With CC’s you need to put on the option and perhaps re-buy the underlying. With the spread you put it on typically at the same time as a buy/write, but the spread may have a longer expiry than a typical CC. So to restate – ACTIVITY MAY BE LESS!!!! – understand?
We still have no answer as the the US/options question with Aussie SMSF’s
But this discussuion is giving me a lot of great ideas, as any of the spreads I trade can be created synthetically with long stock for the purposes of SMSF
Cheers
Surrey,
Lovely stuff mate, well done.
Redwing,
You mean they charge you an additional fee for the quarterly report… on top of the management fees?
Rob,
It’s not how big it is, it’s how you use it!
>>>I disagree. More funds are required, there is no certainty of setting the ‘spread option’ and I consider returns to be less.<<<
Huh? More funds? returns less? Do you have a clue what I’m talking about? This strategy is far less capital intensive than CC’s and as someone who trades these as my profession, i can assure you the returns are superior.
>>>Also, this requires more active trading<<<<
Not necessarily, There may be less activity than that required with CC’s
>>>Collars<<<<
You can collar the stock, but you still end up with poorer risk/reward than a diagonal spread with a nice amount of skew.
Which is actually a good point. If ownership of shares is required with a SMSF, You can create a synthetic diagonal with long stock… A diagonal collar.
So, how big you say? HAHA
Just going back to this sentence <<<<I think actively trading your super funds in higher risk investments is a recipe for disaster.>>>>
That is the point of option spreads, to REDUCE risk. CC’s carry more risk than what I’m talking about.
But if you like CC’s that much, don’t let me hold you back Rob!
Cheers
Originally posted by The Mortgage Adviser:Is that not the idea behind super investments? Long term capital appreciation of assets in expectation of retirement???
Yes it is, but a written call may put you in the position of having to sell the asset at discount to current price, if the share appreciates beyond the strike price; while affording little downside protection.
A bad deal if your are expecting upside during the life of the option.
Where the written call is useful if the share is NOT appreciating AND you do not want to sell.
I think actively trading your super funds in higher risk investments is a recipe for disaster. No-one is always right!Well…true, most of the time. Most people are not successful at actively trading anything, never mind their super a/c.
But, you do not always have to be right, to trade successfully. Some good traders I know have win rates of less than 40% yet still have positive expectancy.
One person I know does trade his SMSF in this manner. This is only with unleveraged shares though.
With a bit of study, one can create really good positive expectancy scenarios with pure options….superior to ordinary shares and far superior to CC’s
The only drawback is having to actively hunt down the the right opportunities, which would not suit most people.
The biggest hurdle, no doubt, is that you’re probably not allowed to do it in SMSF’s.
Originally posted by The Mortgage Adviser:Are you suggesting a covered call is useless (“stinking”) Wayne?
They have their place, but I don’t like covered calls for the sake of it. There are far better strategies available.
The only situation I like them is if you have some scrip in the bottom drawer doing nothing and you don’t want to sell; then write calls over ’em.
Originally posted by The Mortgage Adviser:You should check out if you can do the covered calls on the US Stock Market with Aussie super funds.
Yes, and also, is it allowable to do pure option strategies (I suspect not)
Cause if you can find the right volatility skew, you can put together some awesome diagonal spreads(similar concept to what QLD007 is proposing) that have a million times better risk/reward than any stinking covered call!
Cheers
Originally posted by BorgInvestor:I’ve noticed a surprising phenomenia. Mention that your getting into property investing and people seem to get really funny about it!! Some tell you that it’s not worth it, or ask “How can you afford that!!!”
Some try to tell you not to invest more than 15km from a major capital city, and others say you can pos gear a property with a 5% return!!!
Dam…. just seems that reasonably sane people turn really weird when you happen to mention that your involved in property investing. Anyone else want to confirm this and put forward their own experiences?
You think thats weird?
Try telling people you are a trader. HAHA
Well I’ve certainly been involved in some adversarial encounters with Pelican, but with regards to wraps, the comments above seem to be grossly unfair.
It seems that in Australia the principles of Napoleonic Law have been applied to wrapping viz. the morality of the concept. That is to say they are deemed guilty until proven innocent…a disturbing trend emerging in our country on several fronts.
I see a genuine and concerted attempt by the serious purveyers of wrap finance (inluding pelican) to protect the consumer as much as possible.
Wankers exist in every industry and the broad pasting of muck across the whole industry by various tossers and “consumer advocates” is just not deserved IMO.
I say to Pelican, Qld007 et al; keep up the good work!
Cheers
Originally posted by The Mortgage Adviser:I agree Kay.
I met someone from this forum a while ago (shall remain nameless) who did the most amazing thing. They were on the verge of bankruptcy and somehow negotiated their way into a single payment to all creditors which, if I remember correctly, was only about 20% of all monies owing. The creditors accepted this as full payment and there was no Bankruptcy, Part 10 proceedings or other credit defaults which followed.
I still don’t know how that person pulled it off but I know they will be getting a call from me if I ever get in trouble!!!
Robert Bou-Hamdan
Mortgage AdviserIn the UK, there exists debt consultants who do this for a living. i.e. negotiate settlements like your example above, in order to avoid bankruptcy for there clients.
I’m surprised this hasn’t caught on here yet.
Cheers
Anytime m8
Originally posted by The Mortgage Adviser:Yes we have. I thought it was settled that property was the far better investment.
What does CRIN stand for???
Robert Bou-Hamdan
Mortgage AdviserIt was settled that property was a far better investment for “most” people…certainly not everyone though.
Anyone who makes sweeping statements like “this is best” or “that is best” has been walking around with their eyes closed.
My best mate has done brilliant with property. It has been the best investment for him.
I have done much better from shares than property. Shares are better for me.
’nuff said?
Originally posted by The Mortgage Adviser:I can settle that right now…
Property is a far better investment than shares!!!
Robert Bou-Hamdan
Mortgage AdviserDepends, there is no right answer to this.
There are many factors that will influense which is better for each individual.
….say, haven’t we been through all this before….ad nauseam!
Cheers
