Equity Options

[BYU71]

Originally Posted by FMCoug

I've only been trading real money doing this since March ... so it's way too early to tell what the long run looks like. That said, the account in question is up about 40% in that time frame. So for me, it's worth it. But there is no question this is a high risk / high reward strategy. It's not something I would put a hight % of my net worth into, etc. It has to be done with pure risk capital.

For what it is worth, I think your timing right now is pretty good. The market feels oversold. However, I personally wouldn't put any short term money on it. I am too old to play that short term game anymore. I am buying a few things now, but I don't plan on selling them for 3-5 years.

[hammer]

Originally Posted by FMCoug

Just bought some YHOO Jan 30 Calls at 4.10

Why not buy the Jan '09s? Wouldn't that be a much lower risk than buying the Jan '08s like you did?

[BYU71]

Originally Posted by hammer

Why not buy the Jan '09s? Wouldn't that be a much lower risk than buying the Jan '08s like you did?

Less risk, less return.

[FMCoug]

Originally Posted by hammer

Post the results for all of us to see, make it fun for all of us.

FM Coug, I don't doubt your success one bit, but am curious if you've been tracking your success -- what's been your ratio of successful trades to losses? and for how long?

I will post them here to keep 71 honest about buying me dinner.

Regarding win/loss ratio, I do track that but it's a small part of the picture. The idea is to let winners run and cut losses. So the size of the wins vs. the size of the losses is a bigger component of success. Also, due to the risk involved, I only trade a small % of the total value of the account, keeping the rest in cash. So even the % gain/loss on individual trades can be misleading. That's why to me, what really matters is the ROI on the account balance over time.

[FMCoug]

Originally Posted by hammer

Why not buy the Jan '09s? Wouldn't that be a much lower risk than buying the Jan '08s like you did?

LEAPs are a very different strategy than I employ. They are great for long-term option investing ... but the time value is killer. Not something you want to "trade". It' much more of a buy and hold strategy at that point. And yes, it would be much lower risk.

[hammer]

Originally Posted by FMCoug

LEAPs are a very different strategy than I employ. They are great for long-term option investing ... but the time value is killer. Not something you want to "trade". It' much more of a buy and hold strategy at that point. And yes, it would be much lower risk.

Thanks for sharing.

[Indy Coug]

Originally Posted by FMCoug

I've only been trading real money doing this since March ... so it's way too early to tell what the long run looks like. That said, the account in question is up about 40% in that time frame. So for me, it's worth it. But there is no question this is a high risk / high reward strategy. It's not something I would put a hight % of my net worth into, etc. It has to be done with pure risk capital.

My diversified 401k has yielded 25% over the last year.

[FMCoug]

Originally Posted by Indy Coug

My diversified 401k has yielded 25% over the last year.

So you have accomplished the impossible then? Kudos.

[BYU71]

I guess since we are all confessing here. The clients I have advised over the last 25 years have compounded at 78.735% per year. That is why I can spend all this time posting and not worry any of them will go somewhere else.

[hammer]

Originally Posted by BYU71

I guess since we are all confessing here. The clients I have advised over the last 25 years have compounded at 78.735% per year. That is why I can spend all this time posting and not worry any of them will go somewhere else.

78% a year over 25 years? You taking new clients?