duncan "objectives"
what all must determine in the use of options as a portfolio enhancement is your reasoning for using derivitives.
if it is to "gamble" based on leverage then good for you, you can win big, but lose even bigger.
options at any point can be used to generate income, hedge an established position or enter a new position. if you focus on these primary points, you can succeed with lessened risk. tom k. posted a desire for 30% per annum returns, i posted my current positions which will give me a similar return. 30% will double your money in about 28 months....not the screaming "ten baggers" of other threads....but not the angst that those same threads see now as leap calls bought at the incorrect time are now worthless.
don't use the "i can afford to lose" mindset, because it will cause you to lose, and when you accumulate these "i can affords", you diminish capital.
options are finite, if you position for "income", take the profits as they develop, as it is your "income", if you position to hedge, understand when the hedge is no longer required, let it go at a profit, if you position to own, follow through, unless the underlying fundamentals change.
don't fall for the constant "hype", that permeates these threads, there exists no such thing as "house", "mm" conspiracies, as in "they are using head fakes to take your money away"...too much new age psych babble, the only "head fake" is in your mind... they are no smarter then you, they are just able to move a market based on magnitude. use this magnitude and volatility as your ally.....i believe marty zweig once stated... "the trend is your friend".....up, down or sideways, a trend is a trend (guess you've been around awhile if you recognize who marty zweig was!) |
