obiwan: some corrections
1/ Buy 1000 shares – capital at risk is value of initial purchase price of 1000 shares
2/ Write 1000 ATM put options – risk is 1000 x 1000 x share price minus put option premium you pocket (1 contract = 1000 shares here in OZ)
3/ Buy 1000 shares and write 1000 ATM call options- risk is 1000 shares, 999 written call options have unlimited risk (only 1 call is covered by the shares), minus call option premium.
wayneL, door #3 has the greatest risk (very scary).[cigar]
Who took my MONEY[?]
Use covered calls and covered puts with stop loss orders then!
On a different note, this thread is in support of having a separate SHARES & OTHER INVESTMENTS category.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdOriginally posted by The Mortgage Adviser:Use covered calls and covered puts with stop loss orders then!
If the stock price was $20 and your stop loss is set at $19, then the stock suddenly drops to $15, there is NO guarantee that your stop loss order would be filled! Stop loss orders do not protect you from stocks gapping up or down in price.
Who took my MONEY[?]
Rob,
Also if you looked at the covered call and the covered put risk graphs, you would probably have a different mentality of even placing this trade in the first place.
Who took my MONEY[?]
Positive, it is clear that you lurk waiting to pounce on my posts. It seems you are not having much luck.
Regarding stop loss, there is no guarantee with anything. But I would bet on it that setting a stop loss “AT MARKET” when it reaches a trigger will almost certainly guarantee an immediate sale before it hits the bottom of any spike.
Regarding your graphs, you stick to those. Not all share investors waste their time with graphs. I prefer to look at the figures and market conditions. Covered calls and covered puts are used in opposing markets. Money can always be made if the investor is patient and knows what they are doing. Just because it is not your selected strategy and your graphs are preaching doom and gloom – or whatever, does not mean they are useless.
I guess this thread will go to the kids now as well.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdPositive, it is clear that you lurk waiting to pounce on my posts. It seems you are not having much luck.Rob I aint out here to get you (please!)… I respond to this thread because options interest me and i have something to share.
However, anyone who is not aware of option risk graphs shouldn’t be playing with options..full stop!!Hear! Hear! Well said wayneL. [biggrin] [baaa]
Let’s all play nice eh?
Who took my MONEY[?]
what are my options? [
]Cheers
PropertyGuRu [sultan]
Mortgage Consultant
[email protected]
MSN ID: amitash, Yahoo Id: bornguruNZ loan pre approval from OZ in 48 hours,Low Doc from 6.85%,Investment loan 95%+
PG you have many options…
Who took my MONEY[?]
wow well i think wayne and rob were speaking french and dutch combined. I think I might need to sit around a few more discussions on options before i start a post like this again
Thank you so much for your contribution I will be researching further on the topic of the sharemarket in general. Just so that way i can get a more indepth grasp of the general stockmarket before more advance topics such as options.
Hey Michael,
Just be careful before you speak or you might get you head chewed off!
Good luck with the study.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdOriginally posted by The Mortgage Adviser:I was referring to one person in particular. And I do not hold grudges. I am going to delete a few of my posts so no-one else gets into it. I hope you do the same.
Cheers.
Agreed, deleted some posts as well.
<<what are my options?>>
Hehe, that gave me a giggle!
Bygones!
Hi all,
Just spent some of my time deleting inappropriate comments.
Count to 10 before you post.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping.
No problems at all. Pity you could not do that early this morning before Positive and Jet had something to play with.
Have fun.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdHi Rob,
Haven’t looked at this thread for ‘yonks’ as I have no interest in options and just because I am registered as being ‘here’ it doesn’t necessarily mean that I am here reading.
Of course there is nothing to stop individuals from editing their own posts and thus preventing a he said type discussion.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping.
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