This blog is about the top 10 Commandments of Options Trading Strategies.
Options trading is a complex and often risky business. However, by following some simple rules, options traders can increase their chances of success while minimizing their losses.
Option strategies are the simultaneous, and often mixed, buying or selling of one or more options that differ in one or more of the options’ variables. Call options, simply known as calls, give the buyer a right to buy a particular stock at that option’s strike price. Conversely, put options, simply known as puts, give the buyer the right to sell a particular stock at the option’s strike price. This is often done to gain exposure to a specific type of opportunity or risk while eliminating other risks as part of a trading strategy. A very straightforward strategy might simply be the buying or selling of a single option; however, option strategies often refer to a combination of simultaneous buying and or selling of options.
Options strategies allow traders to profit from movements in the underlying assets based on market sentiment (i.e., bullish, bearish or neutral). In the case of neutral strategies, they can be further classified into those that are bullish on volatility, measured by the lowercase Greek letter sigma (σ), and those that are bearish on volatility. Traders can also profit off time decay, measured by the uppercase Greek letter theta (Θ), when the stock market has low volatility. The option positions used can be long and/or short positions in calls and puts.
Below are the 10 Commandments of Options Trading:
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Do your homework. Before entering into any options trade, make sure you understand the underlying security, as well as the risks and rewards associated with the trade.
Have a plan. Options trading is not a get-rich-quick scheme. Carefully craft a plan that takes into account your investment goals, risk tolerance, and time horizon.
Use stop-loss orders. A stop-loss order is an order to sell an asset when it reaches a certain price point—the point at which the loss on the trade would become too great to bear. By using stop-loss orders, options traders can limit their losses on any given trade.
Let winners run. Once an options trade is profitable, resist the urge to take profits too early. Instead, let the trade run its course and reap the full rewards of a successful trade.
Cut losers short. On the other hand, when an options trade is going against you, don’t be afraid to exit the position and take your losses. Trying to “fight” the market will only lead to further losses.
Manage your risk exposure. One of the most important aspects of successful options trading is managing risk exposure. Make sure you don’t have too much of your portfolio invested in any one security or sector. Diversification is key to mitigating risk in options trading (or any kind of investing).
Use limit orders. A limit order is an order to buy or sell an asset at a specific price—the price at which you are willing to enter into the trade. By using limit orders, options traders can better control their risk exposure and avoid getting caught up in volatile markets.
8 . Be patient . Patience is a virtue in all aspects of life, but it’s especially important in options trading . Don’t enter into trades just because you’re feeling antsy—wait for opportunities that meet your investment criteria . And once you’ve entered into a trade , resist the urge to “trade emotionally” and instead let your original analysis play out . Over-trading is one of the biggest mistakes options traders can make .
9 . Stay disciplined. Like patience, discipline is also key to success in options trading . Once you’ve developed a sound investment strategy , stick to it ! Don’t let emotions influence your trades — if anything , emotion should be kept out of trading altogether . The best way to do this is by developing a clear set of rules that you always follow when making trades . If you can do this , you’ll be well on your way to success as an options trader.
10. Have realistic expectations . Finally, it’s important to have realistic expectations when trading options . Remember : there are no guaranteed winners in options trading ! Every trade involves some degree of risk, so don’t expect to win every single time. If you approach each trade with reasonable expectations and focus on long-term success, however, you’ll be well on your way to becoming a successful options trader
Furthermore:
Thou shall always take 100% daily gains or 200% all time gains.
Do not fall into temptation and buy during the first 30 minutes of market open. (Selling positions is still permitted)
Thou shall not buy calls on green days.
Thou shall not buy puts on red days.
Avoid greed and do not buy consecutive options on 1 company.
Give thyself at least 3 weeks time to play the option.
End your suffering and sell if down 50% all time on an option play.
Avoid gluttony and do not day trade options. (Swing trades allowed)
Be fruitful, multiply earnings and sell covered calls if holding any.
Celebrate and binge drink after big gains (or losses)
Off topic, but relevant – You absolutely need to be doing a 401k or IRA as well as investing in crypto: 401ks and IRAs offer fantastic tax advantages that straight investing does not. Also if you have an employer who matches you are leaving money on the table by not taking advantage of that. It’s foolish. Crypto is great and should definitely be in your portfolio but it should not be your whole portfolio. Sources: 1- WallStreetBets 2- Wikipedia
Options trading can be complex and risky business, but by following some simple rules traders can increase their chances of success while minimizing losses
This is your safe place for questions on financial careers, homework problems and finance in general. No question in the finance domain is unwelcome. Replies are expected to be constructive and civil. Any questions about your personal finances belong in r/PersonalFinance, and career-seekers are encouraged to also visit r/FinancialCareers. submitted by /u/AutoModerator [link] [comments]
This is your safe place for questions on financial careers, homework problems and finance in general. No question in the finance domain is unwelcome. Replies are expected to be constructive and civil. Any questions about your personal finances belong in r/PersonalFinance, and career-seekers are encouraged to also visit r/FinancialCareers. submitted by /u/AutoModerator [link] [comments]
This is your safe place for questions on financial careers, homework problems and finance in general. No question in the finance domain is unwelcome. Replies are expected to be constructive and civil. Any questions about your personal finances belong in r/PersonalFinance, and career-seekers are encouraged to also visit r/FinancialCareers. submitted by /u/AutoModerator [link] [comments]
Crouching Buyer Hidden Intervention: China’s National Team Interesting storyline is playing out in China as State funds began to trade ETFs as part of State run market activities earlier this year. Always interesting to see how the PRC interacts with the market. Now “Lawmakers propose sanctions on US index funds investing in China” Haven’t seen much coverage on Reddit (def not related to Tencents Reddit stake), but this could be the beginning of a major storyline for 2024. Please use this thread for legitimate dialogue, and take your conspiracies to WSB. submitted by /u/Connect_Corner_5266 [link] [comments]
This is your safe place for questions on financial careers, homework problems and finance in general. No question in the finance domain is unwelcome. Replies are expected to be constructive and civil. Any questions about your personal finances belong in r/PersonalFinance, and career-seekers are encouraged to also visit r/FinancialCareers. submitted by /u/AutoModerator [link] [comments]
This is your safe place for questions on financial careers, homework problems and finance in general. No question in the finance domain is unwelcome. Replies are expected to be constructive and civil. Any questions about your personal finances belong in r/PersonalFinance, and career-seekers are encouraged to also visit r/FinancialCareers. submitted by /u/AutoModerator [link] [comments]
This is your safe place for questions on financial careers, homework problems and finance in general. No question in the finance domain is unwelcome. Replies are expected to be constructive and civil. Any questions about your personal finances belong in r/PersonalFinance, and career-seekers are encouraged to also visit r/FinancialCareers. submitted by /u/AutoModerator [link] [comments]
Loans Debts Mortgages Finances Calculators – Unit and Currency Converters
At some stage, we all need or want more money than we have. Funding a new set of wheels is the number one reason to take out a personal loan. Perhaps unsurprisingly, men are more likely than women to take out a personal loan. According to our survey, 69.05% of men said they’ve taken out a loan compared to 62.09% of women.
What to expect when taking out a loan? what is the total cost of a loan? Use these calculators below to find out.
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Use this simple and FREE loan calculator to calculate the real cost of any type of loans before accepting and signing. Remember, banks are not your friends.
Use this simple and FREE loan and mortgage comparison calculator to compare the real cost difference of any type of loans or mortgages before choosing. Remember, banks are not your friends.
The average monthly car payment in the U.S. is $550 for new vehicles, $393 for used and $452 for leased. Americans borrow an average $32,480 for new vehicles and $20,446 for used. The average loan term is 69 months for new cars, 35 months for used and 37 months for leased vehicles. Gen Xers are the most likely to have a car loan, and carry the highest auto loan balances with a median of $19,313.
Use this simple and FREE mortgage calculator to calculate the real cost of a mortgage before accepting it. Remember, banks are not your friends. Always shop around and never forget that you are the boss. Negotiate, negotiate and negotiate
A reverse mortgage is a mortgage loan, usually secured by a residential property, that enables the borrower to access the unencumbered value of the property. The loans are typically promoted to older homeowners and typically do not require monthly mortgage payments.Use this FREE reverse mortgage calculator to know the real cost of a reverse mortgage before accepting it. Remember, Banks are not your friends.
Yield is also the annual profit that an investor receives for an investment. The interest rate is the percentage charged by a lender for a loan. Interest rate is also used to describe the amount of regular return an investor can expect from a debt instrument such as a bond or certificate of deposit (CD).
How do you pay back a credit card? Here’s how it works: Step 1: Make the minimum payment on all of your accounts. Step 2: Put as much extra money as possible toward the account with the highest interest rate. Step 3: Once the debt with the highest interest is paid off, start paying as much as you can on the account with the next highest interest rate.
What are some financial software products that do not require you to store data in the cloud?
There are several financial software products that do not require you to store data in the cloud, including:
Quicken: a personal finance management software that allows users to manage their finances on their own computer.
Microsoft Money: a personal finance management software that was discontinued in 2010, but is still available for download and can be used on a user’s own computer.
GnuCash: a free and open-source personal and small-business financial-accounting software.
Moneydance: a personal finance management software for Windows, Mac and Linux that stores data locally.
AceMoney: a personal finance software for Windows and Mac that stores data locally.
It’s worth noting that some of the software above may have a mobile or web version that sync with the desktop version but still, the data is stored on the local device.
For privacy sake, it is very important for a lot of people to not trust cloud providers with their financial data. Below are some free desktop financial software products that do not require you to store data in the cloud.
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Reliable, clean data, you only pay for what you use, your data stays on your computer.
2- LibreOffice Calc : Calc is the free spreadsheet program you’ve always needed. Newcomers find it intuitive and easy to learn, while professional data miners and number crunchers appreciate the comprehensive range of advanced functions. Built-in wizards guide you through choosing and using a comprehensive range of advanced features.
Calc is the spreadsheet application you’ve always wanted. Newcomers find it intuitive and easy to learn; professional data miners and number crunchers will appreciate the comprehensive range of advanced functions.
4- Google Sheets: With Google Sheets, you can create, edit, and collaborate wherever you are. For free. Price: Free for non-business use $5/month per user for basic G-Suite $10/month per user for business license
5- Excel: Well it is Microsoft Excel….Enough said. Excel provides a simple way to download financial data into a preconfigured spreadsheet at the click of a button.
Money Manager Ex is a free, open-source, cross-platform, easy-to-use personal finance software. It primarily helps organize one’s finances and keeps track of where, when and how the money goes. It is also a great tool to get a bird’s eye view of your financial worth.
Money Manager includes all the basic features that 90% of users would want to see in a personal finance application. The design goals are to concentrate on simplicity and user-friendliness – something one can use everyday.
7- Xero: Xero backs up your data and protects it with multiple layers of security including industry-standard data encryption and secure data centres. We also offer two-step authentication as an additional layer of protection for your Xero account.
8- Smartsheet Smartsheet is a Software-as-a-Service (SaaS) company focused entirely on its core cloud-based work automation platform. Their competency is in simplifying tasks and including many diverse types of output. Since all their efforts revolve around a single product and its extensions, there is strong user support.
This blog is geared towards young adults, particularly young first and second generation immigrants like me who don’t have any real estate and assets inherited from their parents here in Canada and USA. In this blog, I will help answer the following questions below based on my own experience and extensive research:
Work Hard first and foremost and do well at your job. If you are not working hard at your job, you will lose it and any advice below won’t matter.
Live a healthy lifestyle. Your health is your most important asset: Any advice below will be useless if you don’t eat healthy, exercise and have a stress free life. Get medical insurance and get a health check up done once every year
Live within your mean; within your budget; Don’t spend more than you earn.
Use your credit cards,but always pay them off at the end of the month.
Never miss a credit card payment: It will affect your credit negatively and cost you money.
Don’t buy a car unless you really really need one. If you do need a car, don’t buy old cars; You will end up spending more in the long run. Buy new cars at bargain price.
Take public transit or bike to work: You will save money and exercise and read a lot in the process.
Rent empty rooms in your apartment or house, and use that rental income to pay off your mortgage.
Get a side job in an area you are passionate about: If you like team sports, you can become a referee or coach and make extra money. You can help people fix their web site if you are tech savvy; You can buy and sell used items on facebook marketplace or kijiji or craigslist for a profit; you can be a tutor on week ends or evenings, etc…
After paying all your student loans and more importantly your credit cards debts, save money every single month automatically in your TFSA, RRSP , Roth IRA, 401K accounts.
Negotiate everything involving money coming in and out of your pocket. There are no rules set in stone about interest rates or pay grade; Negotiate, Research, Negotiate again until you get the best value for anything you are buying. Don’t be a jerk though and don’t come across as cheap: Learn when to stop and accept and appreciate a good value.
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Work hard. The harder you work, the more likely you are to become financially independent.
Diversify your income. You should never rely on one source of income, you should try and diversify your income streams. On top of your monthly salary at your main job, try to get rental income by renting empty rooms in your house or apartment. Get a side job in an area you have some expertise. Example: Tutoring, Team sport referee, Dance instructor, Handyman, Cleaner, salesman, etc…
Cancel recurring paying for things you don’t need (Netflix, Spotify, cable, etc…) ; They add up.
As soon as you get paid, transfer at least $100 automatically to your TFSA, or Roth IRA Account every month. Select an aggressive portfolio and forget it. You will likely get a big return after 10 years.
If you can afford a 5% down payment for a house, buy one and if you are still single, rent the empty rooms and make sure that your rental income can cover at least half of your mortgage payment.
If you have time to research about stocks market, do your due diligence and buy some good stocks.Don’t invest more than $10000 on stocks from your own pocket. Invest in stocks as if it is lost money and you might be lucky down the road.
Start saving money monthly in your RRSP, 401K and RESP accounts if you have kids.
Invest in your physical, mental and emotional health: Yes I am repeating myself. If you are not healthy, any other advice is useless and you might not even be around to enjoy the benefits of your investments.
Easy to say, but hard to do: Never buy depreciating assets on credit. Cars, RVs, appliances, clothes, trips, leasing, etc. You won’t get rich that way.
If you’ve ever thought about buying a house, you’ve probably heard it: Don’t take out a mortgage until you’ve saved up at least 20 percent for a down payment. Otherwise, you’ll be forced to pay notorious private mortgage insurance.
Save 10 percent of your income.
Don’t rent or throw away money. Buy a house and be the landlord.
Investing before spending rather than investing after spending.
Pay all your bills and dues in time so as to never pay them with heavy interest or penalty!
Don’t invest in anything that you don’t understand. Yourself. Not because someone sold it to you or because others are doing it.
Don’t focus on the short-term, allow yourself to be unduly influenced by the financial news media, or let news about the market or the economy affect your long-term investing strategy.
Save and Invest early and aggressively in your 20’s. Time and a higher risk tolerance are extraordinarily valuable and everyone can make this call when they are younger—or do so for their children/family. This also sort of falls under the “rule” of paying yourself first. This is key to maximizing wealth.
Read , read, read and be curious. This will help you find and execute ideas to make some money on the side.
Increase your income streams: On top of your day job, try freelancing on the side for a few extra bucks. Identify where you can provide your freelancing services (Referee in team sports, Handyman, Tutor, Buy and Sell used items for a profit, art, etc..). The more sources you have, the better.
Start saving as early as you can. The earlier you start, the better.
Make your money work. Start a business, make investments, do something that makes you more money from what you have.
Make money from your existing assets (rent rooms in yours house, Uber or deliver stuffs with your car or truck, etc..)
Never spend money on depreciating commodities that doesn’t affect your safety. What you can do with a used $200 phone, doesn’t have to be bought at $1000 just because it is hip.
Don’t jeopardize your safety. If you buy old cars that break down regularly and put you at risk on highway, all the advice above won’t matter.
Whatever you are buying, put at least 20% down to avoid paying extra insurance fees and be stuck with a high interest rate for years.
Buy in decent neighbourhood. It usually means better tenants who will be more likely to pay their rents and not damage the property.
Buy a mix of multi family and single family homes. It usually results in better tenants and higher equity growth over time.
Invest on home inspection: Make sure to use an agent who is able to point out potential problems. Get a home inspection and don’t buy a property that requires extensive repair. Especially on your first one and when you don’t have a ton of disposable income.
Build: Contact builder who build properties and buy from them, allowing you to get great discount and customize the house for extra rooms and developed basement.
Become Part of a Bigger Deal: By partnering up with others interested in investing and pooling your resources to make a larger deal happen. Do some research online on how you can do this for either a commercial or residential property, which in some cases, requires an investment as small as $1000. The good thing about these deals is that you can hedge your bets by placing multiple investments into various properties.
Real Estate Investment Trust: Also known as a REIT, you can invest in a publicly traded trust that uses the capital of its investors to acquire and operate properties. You can find REITs in the major Wall Street exchanges and it requires companies to shell out 90% of their taxable profits through dividends to investors in order to retain their position as an REIT.
Rent A Portion Of Your Existing Home via Airbnb or VRBO: I prefer those options because you it is short term and you can always stop renting when you have family visiting. This gives you a lot of flexibility.
John Doe 1 Buys 1 house cash putting 20K down and invest 80K
Gets $800 per month from the $80K savings easy life and always has plenty of cash
$96,000 in rental income sells his one house for $200,000 and nets $100,000, so his total gain was $196,000, not bad. His $100,000 investment has nearly tripled!
John Doe 2 Borrows and Buys 4 houses with 100K putting down 20K for each
Gets $200 per house per month but spends it all towards the principal of the loan, so gets $0 per month Must keep his full time job and has a struggle keeping up with expenses
around $24,000 in rental income sells his 4 rentals for $200,000 each netting $100,000 each for a gain of $400,000, so his total gain is $424,000, so his investment has more than quadrupled!
Rushing to accept any financing offer because of the excitement to own your first house: Not good. Get various and competitive financing offer from different institutions and negotiate to get the lowest possible interest rate.
Don’t just focus on the aesthetic part of the house; Most first houses are never your dream house: Focus on features that will make the house easily and quickly sellable (Number of rooms, size of rooms, garage, easy to maintain, location, etc..).
Don’t buy an above average size and price house for your first house, go to the lower end and get a size that is proportional to your family size.
Using a family or friend for a realtor: Don’t do it. This is your first most important investment and don’t mix it with feelings and emotions.
Location, location, location: Buy where you can easily access public transit so you don’t have to spend all your savings on driving to work. In the same token, buying closer to public transit will help you get renters easily if you have empty rooms available.
Inspection, inspection, inspection: Get the best home inspector available. Some of them are really bad. Look for home inspectors reviews before hiring them. If the home inspection misses important defective stuffs like dry rot on the siding, you will end up spending thousands of dollars to fix them.
As a buyer, if you have enough money for a 20% down payment and closing costs and has something left over for cash reserves, 20% is fine. But if you carry any consumer debt with rates higher than that of a mortgage, it is far better to pay those more expensive items off with available cash than to put it into a home down payment.
When you get a conventional mortgage with a down payment of less than 20 percent, you have to get private mortgage insurance, or PMI. The monthly cost of PMI varies, depending on your credit score, the size of the down payment and the loan amount.
3- What is RRSP: An RRSP is a retirement savings plan that you establish, that we register, and to which you or your spouse or common-law partner contribute. Deductible RRSP contributions can be used to reduce your tax. Any income you earn in the RRSP is usually exempt from tax as long as the funds remain in the plan; you generally have to pay tax when you receive payments from the plan. (Applies to USCanadaonly)
4- What is TFSA: The Tax-Free Savings Account (TFSA) program began in 2009. It is a way for individuals who are 18 and older and who have a valid social insurance number to set money aside tax-free throughout their lifetime. Contributions to a TFSA are not deductible for income tax purposes. Any amount contributed as well as any income earned in the account (for example, investment income and capital gains) is generally tax-free, even when it is withdrawn. Administrative or other fees in relation to TFSA and any interest or money borrowed to contribute to a TFSA are not deductible. (Applies to Canada only)
5- What is RESP: A registered education savings plan (RESP) is a contract between an individual (the subscriber) and a person or organization (the promoter). Under the contract, the subscriber names one or more beneficiaries (the future student(s)) and agrees to make contributions for them, and the promoter agrees to pay educational assistance payments (EAPs) to the beneficiaries. (Applies to Canada only)
6- What is Roth IRA? A Roth IRA is an IRA that, except as explained below, is subject to the rules that apply to a traditional IRA. (Applies to USA only)
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Today I Learned (TIL) You learn something new every day; what did you learn today? Submit interesting and specific facts about something that you just found out here.
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Reddit Science This community is a place to share and discuss new scientific research. Read about the latest advances in astronomy, biology, medicine, physics, social science, and more. Find and submit new publications and popular science coverage of current research.
Between-jobs Jose has always been different to in-work Jose. Much less stressed, bursting with ideas and watching a lot of football on television. submitted by /u/kundu123 [link] [comments]
As Weis said: “I consider this boy a great player as much as he is a dirty guy. I hate him for the things that he did. I think he doesn’t have any respect for France and also for all the people who are asking for a French passport and don’t get it. And under the pretext that he is a great athlete, he got it. I find it scandalous, I find it embarrassing. I don’t care about his excuses, cause they are his words, and his words mean nothing”. submitted by /u/kundu123 [link] [comments]