Do you love trading?

We all know the type.

The super analytical economist/political commentator that can explain ANYTHING with the happenings of the market.
The ones that have tried multitudes of advisories/gurus/seminars.
The ones that have used most data packages that you can name in one sitting. The ones that you see in your local meetings year in and year out.

But when you get down to the nitty gritty……Da guy hasn’t made a trade on his own for years……

How about this type:

The same type that frequents the political rooms, the one that can reason economic policy and geopolitics with perfection. The same guys that shorted the mkt all the way up, and finally went long near the top, and holds all the way down. The need to be right far outweigh the need to make money for these types. They are too smart to admit they are wrong. In their mind, they are bigger than the market.

WTF!!!!

How can such talented individuals, with all that “experience” not be
“banking it”? Surely, anyone can figure out the marketplace in 2-5yrs time, or can they……

Trading is a tough business!!!!!!!! If all it took was talent and access to readily available tools, your much smarter neighbor/co-workers/relatives would be rich by now. But such is not the case. Ask yourself why that is?

To the type 1 guys I named above: look dude, I know you have “invested” a lot of dough and time into this thing, and you know just about anything and everything there is to know with options strategies/psychology/$mgmt bla bla. But you dread losing, you dread stepping up to the plate, you dread making independent decisions, you hate even more when u do have a winning trade bec. u know u will painfully give it back next week. You even cringe when other people make winning trades. Have you ever considered maybe trading is not for you after all? Or perhaps u just need to be a bit more organized and focus on 1 thing and not spread out too thin? I know at times I fail to see the forest from the trees until a fellow trader points out the obvious. Or finally, get off your high horse and try something else (strategy wise), bec. what you have been dwelling on surely hadn’t been workin’!!!! If this is not what you love doing, whether winning or losing, it will be painful and costly sticking it out in the long haul. Remember what your high school counselor preached? Find a field that you may be interested in for a career. Why did the counselor say that? BECAUSE ITS EASIER IF YOU LOVE WHAT YOU DO IN THE LONGGGGGG HAULLLLLL!!!

To the 2^nd type of geniuses I named above: man you are doing a great job fueling the trend by providing liquidity on the way up and holding the bag on the way down. Please keep doing what you are doing because u obviously are not here to take dough from the mkt, and you have an endless supply of money to contribute. Bravo.

Subprime

Its My Turn Now

From the hit Disney movie Jumpin comes the hit song performed
by Keke Palmer. You may know Keke from Akeelah and the Bee (2006).

Check out the lyrics on this youtube clip. Every bit as inspiring for the traders
that are ready to take on the adventure.



The original non-lyric video can be viewed here

The fever will break

This excerpt clip from CBS 60 Minutes on Alan Greenspan aired on 9-16-07 , on economic future. More clips from that show are out there on CBS.com or by clicking on the MENU button on the bottom right of the video.

Perfect conditions

I live about 30 min from the coast. Being here in Northern California the beaches are not exactly inviting at all times. During summer months the water temp persists in the 50s with frequent fog lingering along the coast. That means 50s-60s at the beach not counting any wind chill.

So to ensure pleasant experience for my family, we head to the beach with the little ones only when:

Its scorching where I am, in the 90s.

and

Its at least 70s at the coast, overcast ok.

and

Wind less than 10mph at the coast

and

At least 2 hours of day light to accommodate for possible traffic

Optional filters

• Weekday a plus, no crowds (best visits turn out to be weekday visits)
• Low tide a bonus
• Small to calm wave action a bonus

If the conditions don’t pan out but it’s scorching, plan B is always head for one of the inland lakes. Its about an hour out but it’s an alternative.

Today was such a day for the beach. Had a great time at the beach with family, no crowds, no wind, low tide, calm waters. There were plenty of mole crabs (a.k.a. flea crabs) as you dig thru the sand. They don’t bite and kids loved them.

I wait for the perfect condition b4 making a trek to the beach.

Another way to think about this is I wait for the conditions to COME TO ME or I do something else.

Do you have your criteria for the perfect trade setup?

Do you absolutely DEMAND for the right conditions b4 entering a trade?

Do you wait for the market to come to YOU or you don’t trade?

Among other trades, I have been stalking a particular ONXX ratio back spread for a few days.
I am firm on my limit entry price or I am willing to let it go. Its getting too close to options expiration for the sept spreads.

Amazing AMZN

AMZN daily chart.

What are the chances for AMZN to stay in-between 65.24 to 70.73 by June expiration, in 18 days?

How about this one........

What are the chances for AMZN to close below 65.24 or above 70.73 in 18 days?


I pondered on the 2nd question and executed the following trade on 5/25 just moments b4 the close. (click on image to enlarge)


As long as AMZN is outside of 65.24 to 70.73 I can't lose.

------------------------------------------------------------------------------------------
Trading options may involve significant risk of capital. Trades posted here should be considered for informational or entertainment purposes only and not actual trading advise. Please consult your licensed broker or advisor before placing any trades.
------------------------------------------------------------------------------------------
6-11 trade update

At 10:11 am EST today I bot back 5x of the jun 72.5p for 1.35 each (originally sold for 4.75 each). Taking some $$ off the table and most importantly, reduced my max risk considerably.
Cumulated P/L shown below.


6/12

Towards the close sell to close 5x jun 67.5p for .25 a piece to reduce decay against me.

6/13
exited 2x 72.5/67.5p spread for 1.94 ea at around 10:15am EST. Upper wing is done all with profit. Entering a limit sell order for .15 10x 67.5/65p to exit the lower wing. Any recoup from the lower wing at this point I consider a bonus.

Exited 10x 67.5/65p spread for .15 a piece on that dip intraday. Limit order executed at 1:09 EST. I am all out with +$460 for 20% return (max margin was $2250).

Candlestick chart?

Online brokerage scam

Unidentified thieves hacked into dozens of accounts at seven leading online brokerage firms, sold the customers' assets and used the money to buy penny stocks the thieves had previously purchased in an attempt to run up their prices, the Securities and Exchange Commission alleges in a.... Read More

Additional links for related story.

Official word from the SEC on how you may protect yourself from scam.

Totally off topic: The Landlord

But hey, at least its money related......

Movie recommendation for traders

Go get this movie!!!!!!!!!!!

I just saw for the first time the 1998 movie Rounders , Starring Matt Damon and Edward Norton.

I looked up the term "rounder" from Wikipedia:

A rounder is a card shark who makes his/her living entirely at playing cards.

The term rounder carries a certain respect amongst card players, as they know anyone with that title knows their way around a table and is a person to be taken seriously. The term sometimes also implies a player making a living by "hustling" less experienced players.

--------------------------------------------------------------------------------------

I enjoyed the movie immensely. Without giving too much of the story away for those of you that have not had the pleasure, there were two things that stood out for me in the movie:

1. In the beginning of the movie Mike (Matt Damon) described working a "grind" playing poker.

2. When Mike accused Joey Knish (played by John Turturro) for not having the stones to play
the big bets.

I highly, highly recommend this movie for all traders. I imagine the newer traders will see one side of the card playing, where as the more experienced trader will pick up on #1 and #2 mentioned above as being the absolute parallel in consistent trading. I will comment more on #1 and #2 at a later post.

Oh here is another website related to the movie.

TOS platform secret doors

In your TOS desktop platform, within any of the tabs:

• Find the TOS logo with those 8 red splashes
  
  
• Click on the long ones-from the top and counter clockwise to open secret door # 1.
  
  
• Click on the second longest ones, again counter clockwise, to open secrete door # 2.
  

Smart $ bet on sure things

When Shanghai and Hong Kong nose-dived a few weeks ago, they pulled American markets down with them. Instantly the media and press turned away from Britney's bizarre behavior and began blabbering breathlessly about the hot new topic du jour, "risk." Here's one of the best metaphors:

"We view financial risk much like popcorn popping in a microwave.
Until the first....... Read More

I need to be right

This was an actual conversation.
----------------------------------------------------------------------------
Jody says: hi
optionsjunky says: hey
Jody says: how are you?
optionsjunky says: good and yourself?
Jody says: ok
optionsjunky says: setup trades for apr?
Jody says: I'm in puts on ANN now. It's going bad on me.
optionsjunky says: as long as u didn’t bet the farm, and u have your stop loss planned out, its not a problem, right?
Jody says: well, I lost most of what I put into it. I got 10 contracts of the 40 put. (ANN now at 38.60).
Jody says: I don’t have a stop loss.
optionsjunky says: the apr 40 put is still worth 2.1
Jody says: yeah it is. but I paid about 3 times that.
optionsjunky says: if the original reason for entering the trade is no longer valid, salvage what u can and move on to better looking trades.
optionsjunky says: you are a trader, no need to go into the ground with anything, u are smart and agile.
Jody says: I can't get out now. It will be a big loss for me.
optionsjunky says: so u would be willing to lose another 2.1 then ?
Jody says: I don't want to lose any more.
Jody says: I want the stock to go down. I'm hoping it will.
optionsjunky says: the chart looks like news related, did you play the news?
Jody says: no, I got in last week when it was going down.
optionsjunky says: well, anything can happen I suppose, u got 32 days to find out.
Jody says: I'm sick of losing money in the stock market!
optionsjunky says: if you are still bearish, u should load up on the 35puts, they are on fire sale right now!!!!
Jody says: 35 is OTM. We're not supposed to buy those.
optionsjunky says: whopping 35 cents a piece!!!
optionsjunky says: u are not supposed to let a losing position go this far against you either.
optionsjunky says: u are only down 4 grand right now , what’s another $350 for the otm puts? besides, u are fully willing to lose another 2100.
optionsjunky says: double down with $350, I say.
Jody says: ok
Jody says: do you think the stock will go down?
optionsjunky says: what does your guru say about stock gapping up like that?
Jody says: I don’t know
optionsjunky says: what I think about the stock direction, has no relevance in this case, what’s important here, is u are willing to lose another 2.1, yet unwilling to spend another .35 to swing for the fence. Now, u tell me if that makes any sense???
Jody says: I'm not willing to lose another 2.1
optionsjunky says: the stock will do what it will do in the coming days, no amount of mulling over, prediction, or crystal ball will change that fact, it is what it is.
optionsjunky says: a trader that is not willing to take ANY losses.
Jody says: yeah
optionsjunky says: u should stay in bank CDs
optionsjunky says: here is what I will predict for you, the rest of the weekend, you will
Jody says: I’ll never make money on those.
optionsjunky says: seek out an opinion that is bearish to make you feel better, until u find that opinion, u will think everyone else is crazy.
optionsjunky says: don’t forget to stop by ANN yahoo message board
Jody says: What's on there?
optionsjunky says: bulls and bears for ANN
optionsjunky says: u will find bulls hi fiving each other there on the gap up, and the bitter bears touting all the reasons why the stock should go down.
xxxx says: just a beginner here, but what if Jody change and buy calls now ?
optionsjunky says: any adjustment here will take on some degrees of additional risk.
optionsjunky says: if she wanted to turn bullish she can spread it by selling the apr 45 put.
xxxx says: yes but stock is bullish now, look at the chart is bullish
optionsjunky says: that’s not Jody's problem, Jody's core problem, is she is not going to lose no matter what, and may end up losing the whole thing.
optionsjunky says: Jody is always right.
Jody says: I hate being wrong.
optionsjunky says: I don’t believe I have mis-spoke.
optionsjunky says: your problem is you, not the trading system, or your picks.
optionsjunky says: the need to be right, is your downfall.
optionsjunky says: the moment u choose to ignore the stop loss rule that you bot with the $2000 seminar, You are basically saying u are bigger than the market, no matter what.
Jody says: OK, I'll get rid of the put on Monday.
optionsjunky says: the more educated the person, the more they have to be right.
optionsjunky says: bec. they have been successful with that method in society, and think the market can be worked the same way.
optionsjunky says: if I have mis-spoke in anyway, Jody, feel free to call me on it.
Jody says: I think you're right.
Jody says: you've talked me into getting rid of the put.
optionsjunky says: NO I didn’t. u just want me to go away.
optionsjunky says: its not about right or wrong and who is what. Its pure trader psychology.
optionsjunky says: I don’t care if I am right, I am not the one 4 grand in the hole.
optionsjunky says: even if this stock end s up tanking next week, and u end up making $$ on it, deep down in your heart, u know this is not the way to last long, how long can u stay this lucky?
Jody says: not very long
optionsjunky says: Casinos build their hotels resorts on these kind of gamblers.
optionsjunky says: The gamblers that love the action, yet are unwilling to cut their losses. The perfect target demographic.
optionsjunky says: I have to run will be back later.
Jody says: ok
Jody says: thanks

Priorities

I went to drop off my kid at school today. One of the regular Dad's there, dressed in basketball shorts and T-shirt (obviously not going to work today) said to me smiling, saying "so, what do you say to the next 2 most important days of the year?"

The first thing that came to my mind was "yep, its options expiration, I got my spx positions to roll, RUT looking good, SET tomorrow morning, yep, the most important 2 days of the year indeed!!!".

Then it dawned on me he was talking about NCAA Championships.
He was taking the day off just to watch all the games.

The Good, the Bad, & the Ugly

This from Michael Catolico from TheOptionClub Yahoo group.

--------------------------------------------------------------------------
The assumption is that any strategy followed over and over
again will end up with zero profit. and yes, I believe that adjustments
are the key to profitability - or rather, skillful adjustments are what
separate the winners from the losers.

if I can digress for an indulgent bit, let me suggest that there are
really only three types of folks that actually win at options trading
(sort of my version of the "good, bad & ugly"):
1 - the lucky
2 - the fortune tellers
3 - the skilled

Every new trader should test to see if she or he is actually lucky
before ever wasting a moment trying to learn about the market. The way
to do this is simply to take say $5,000 buy some short term options
randomly or "on a hunch". Then, whatever happens to that trade, take the
proceeds and plow the entire amount back into a similar guess-type trade
the next month. Do this until you either lose the whole $5k or turn it
into $4-$5M. at which point remove your money and never make another
trade again. I would put the odds of actually being this "good" are
really about 100 million to one but oddly I have personally known two
people that fit this category. The first mistakenly took his success as
a sign of skill and proceed to give it all back and then some. The
second was smart enough to know it was a fluke and took the proceeds and
started another business (which he is actually good at) and turned that
nest egg into a lot more golden geese.

The "bad" in my little metaphor is the catch-all category of "fortune
tellers". Most people know these types by the more familiar terms as
technical analysts and fundamental analysts. As you probably know I am a
believer in "weak" efficiency for the market. This is mainly because I
have never been able to predict either price or volatility direction
with anything better than 50/50 success. Not that I haven't spent a lot
of years trying both sides including a decade or more of immersion in TA
and spending time and money to get an mba in finance/accounting and a
cpa to boot.

Just because I could never figure out how to predict the future doesn't
mean that there aren't some who do. But here's why I call this category
of winners "bad": almost every guru and market "expert" is out there
peddling a system or method essentially premised on "finding winning
trades," and following this line of thinking ultimately busts out most
traders. Most novices and in fact most retail traders believe that
predicting the future is the key to winning the market and sometimes
cautiously, often gullibly, latch on to the system sellers and
prognosticators. They spend very little time learning much about how
options work and, in truth, if they are actually very good at picking
winners, don't need to know much more than that options help them
leverage those predictions. I’d say that no more than 1 in 100 actually
have the ability to consistently pick winners at better than even odds.

The way to find out if you are a fortune teller is fairly complex but
testable. Get yourself reams of historical price and fundamental data.
divide the data sample in half. on the first half, find 30-40 assets
that beat or failed to match the market by +/-20% or more in a three
month period. Use all your perception, reasoning and intuitive powers to
find some common denominator in that group of anomalies. then take that
finding and screen the other half of your sample. if you find that you
can spot similar outlier/big movers in the test sample with your method,
you may have struck the mother lode and are probably a bona fide fortune
teller. [needless to say, but obviously anyone touting a system or
method publicly has either tapped out on a formerly successful system or
is just a scam artist - the only way to discover a winning method of
this sort is to create your own.] trade this discovery/knowledge
carefully and as you build up a continual track record grow your wealth
to the millions or more mark. again i would caution that if you ever
reach the "richer than you need to be" stage, bow out and never trade
again. but in this instance you can then sell your secret method for
additional untold millions.

the final type of winner is what i would term an "ugly" trader. this is
the kind of person that somehow manages to always and consistently find
a way to make money. regardless of market direction, regardless of
volatility, regardless of liquidity, etc. they are usually huge students
of this game, can erect and dissect a position as though it were second
nature, are obsessed with risk (both in protecting against disaster and
embracing certain types of extremes) and can trade instinctively. this
category is the one that i believe most folks should either aspire to or
eventually wind up pursuing after failing at the first two categories.
unfortunately i would say only 1 in 20 or so ever achieve any kind of
success as skilled/ugly traders.

if you'll notice, when you add up the odds, i'm suggesting only around
6% or so of traders ever wind up being big or long term winners. but
that is the grim reality of trading. and when you realize that options
hold negative odds similar to casino games like blackjack, you'll know
why i tend to preach cautiously when i respond to discussion threads on
these boards.

Michael

Trade the price action, not the stories.

If you are a trader, trade the price action.

AGIX interesting trade for April

AGIX news pending, currently trading around $9 a share.

Here is the risk profile of this interesting trade translated into plain English:

This trade has the potential of making at least $1550 if AGIX stays anywhere above $3.5 a share by April expiration. That's roughly a 25% return relative to the amount of money tied up ($6000 required). I estimate around $70 in entry commissions, and potentially no exit commissions.

This trade also has the max potential of making $4000 if AGIX landed around $5.0 a share by Apr expiration. The probability of this happening is obviously lower than the $1550.

No trade would be complete without discussing the risks. Losses will occur if stock plunged below $2.25. The max risk is around $3500 IF the stock went to $0 (and u did nothing whatsoever).

The implied volatility (uncertainty premium, due to news pending) for the options are absolutely fat. Here are the exact details for the trade:

Sell to open qty 25 of the April 5 strike put options
Buy to open qty 10 of the April 7.5 strike put options

Not too bad is it? Lets break down the above two transactions another way:

step 1. Sell to open qty 10 of the April 5 strike puts
step 2. Buy to open qty 10 of the April 7.5 strike puts
(step 1 and 2 basically make up plain jane vertical spreads)
step 3. Sell to open an additional 15 of the April 5 strike puts.

Now, what I just described with all the above, can be summarized with the risk graph below.

Would you do this trade? (click picture to see larger version)


Here is another variation. Here we have a potential of 170% return.
Total capital required to do this trade is only a whopping $450 (to make $800!!!)
The only difference here is to add qty 15 of the April 2.5 strike puts to cap the max risk on the downside.

Would you do this trade?

Trading options may involve significant risk of capital. Trades posted here should be considered for informational or entertainment purposes only and not actual trading advise. Please consult your licensed broker or advisor b4 placing any trades.

Emergency Room service for newbies

Fast market condition today. Needless to say I get a steady flow of emails and chats today from folks with panicked positions seeking opinions on how to "remedy" the losses incurred.

Here is a very typical example, this was the main theme for no less than 5-7 emails today:

"I have -10 spreads of the ICE 145/140p spread for .55 credit each.
The stock closed at 144.58 today. I am concerned as I am down about $1500
at the moment. I don't want to take the loss, yet I can't afford to
take the max $4450 loss either. What's the best thing for me to do?"

Helloooo??? As if I have the magic wand to wave the losses away???????

First and foremost, if you can't afford to take the max loss, don't trade so big.
Ok, so you are new, and have no regard for position sizing. Alright, thats fine.
Then trade what u can afford to lose per trade. Trade 2x instead of 10x, for example.

Second, choose an online broker that allows you to trade
smaller. Switch from the ones that favor trading 10 contracts or more at a time.
You are not really saving much dough by trading big.
You are still learning. Trade 1-5 contracts and learn to average them in. Many good traders trade on probabilities and steady averages, not all in and all out.

Third, flat (no position) IS a position.
The normally tame indices are basically behaving like the GOOG/CME/RIMM and moving like monsters. You don't need to be trading in this condition if you are new. Paper trade and observe the the ebb and flow of the implied volatilities at play. If you ABSOLUTELY MUST participate in the excitement, trade small.

I played emergency room staff today, but sadly, was not able to stop the bleeding for many.

Where is the beef?

This from Stall Horn from AdvancedOptionsStragtegies group. I am posting it partly
because I am being plugged in the post ;-) :

----------------------------------------------------------------------------
Isn't it interesting the total number of members we have and how many new
members this group attracts a week, but how few members submit posts?

Wasn't it the old Wendy's commercial that queried: "Where's the beef?"

Well, the "beef" in this case is our willingness to share.

So why is it that we members are not asking questions and gorging ourselves
on the talent that exists in this group?

For those newbies to options my first guess goes back to our high school
mentality: We are afraid of sounding stupid in front of our peers. And it
sure is easy to sound stupid when it comes to options and the stock market.
I know this because I have been there, just like you.....

For the "oldies" to options my first guess is that your hard earned
knowledge has become, in your mind, proprietary, not unlike real estate,
which tends to appreciate in value as you build on it. I know this too
because the more I learn the fewer specifics I want to share.

Think about it, if I teach you all of my "secret ingredients" then I just
may lose my "edge." After all, the money I take from the market and put in
my pocket has to come from somewhere. So the more "stupid" traders there are
throwing their money at the market the better for me, right....? -
Absolutely.

So as far as a discussion group is concerned, we all are trapped in a Catch
22. People want to learn but those who can teach purport Theta, and Vega,
and the Flatulence theory...(?)

But these folks are not completely bad. They are simply indicating
indirectly to those asking question what I stated in the PS section of my
email to Sky. IT IS ALL UP TO YOU! You have to learn interpretation for
yourself.

Nobody is coming to your aid. The options world, just like the stock market
world, is the survival of the fittest. And by golly, my personal goal is to
be more fit than you so that I can out-run that "bear" before you do. My
concern is not with YOUR brokerage account, but with my own.

And this is not to diminish Sanjay. He comes in with his prognosis of things
and tells what he is doing. That is very respectable. But as a trader, you
are second a follower and first a leader. Do your indicators tell you the
same thing that Sanjay's are telling him? If so, then you have a
confirmation of sorts if you believe in Sanjay. If not, then best to let
Sanjay forage alone. I can assure you that Sanjay will not be offended.

And this is not to diminish Junky. He provides instruction on how tow to
read the TOS risk graph and whatever, which is a huge stepping stone
admittedly. But Junky is not your God. He is only a "tool" that you take
advantage of so that you can further your personal option trading intuition.
Nothing more. And he is happy to be as such.

Ironically the whole climax of this blather is that it doesn't matter how
much knowledge is shared. Statistics state that only 20% of the market
players actually make "real" money. This would seem to indicate that 80% of
you are not able to be inspired enough to follow through and make the $$$$$.

Again, this is not my problem. My goal is to be in the upper 20%.

If I don't see you there then, I guess I'll see you when I see you.... if
ever....

FSL

How much money can you make?

Saw this post on TheOptionClub absolute gem posted by Zia.

--------------------------------------------------------------------------------------------------------------------------------
It is very a fair and common question that novice traders asking all the time how much money you can generate in the market. My simple answer is if you can get to the point that you do not lose money then profit will be taken care of your account by itself. Always think about the market structure rather than $ amount; and more than important thing is your own degree of emotions in terms of stress, hope, greed, and fear. At last but not the least, remember the market doesn't beat a player; it merely gives a player opportunities to beat himself.

Happy Trading,

Zia Mostatbi

Learning to paint master piece(s)

Jessica : Hello Danny

Jessica : How nice to be called 'young lady'....I'm probably older than you

Danny : so how are you today

Jessica : Great....Just deep dusted my whole room.

Danny : well that by be so,,,,

Danny : but i'm not spring chicken anymore

Jessica : So much to learn. so much to sift through, so many decisions to make. I just decided to take a break and dust.......

Jessica : Now, back to 'what to do next', which info to read.

Danny : i understand,

Jessica : which DVD to watch.

Danny : yes forever learning

Jessica : I need direction, which step to take next, etc.

Danny : well that might be a good thing

Jessica : I know SO MUCH about options, and strategies, etc, just don't know when and where to apply it.

Junky: unfortunately it takes........click here for the rest of the chat transcript.

Professional trading chat session archive

Don Bright from Bright Trading LLC and John (maverick74) from Vtrader Group again hosted a 90 min. live audio chat and is archived Here. Its an 83 meg zip file to download and unzips into one mp3 file and one txt file with chat log. The session gives no hype insights into the arena of professional trading. New info on:

• portfolio margin in Apr.

• penny wide spreads on select options.

• Is trading easy?

• What is the most profitable options strategy?

• Is selling time premium a good or bad strategy?

dull market humor

During the summer of 2006, 2 young men from the top of their class went to work at 2 separate hedge funds, one for a long fund and the other...... read more

Swimming boot camp

Having never really learned how to swim up till recently, I attended a $1950 swimming seminar over a 3 day weekend. (bring a friend or spouse for free) I initially went to their free intro session at a local hotel and they were very convincing on how easy I should be able to handle myself in the open ocean once I go thru the weekend boot camp. Over the weekend we were even taught steps to take to rescue ourselves in unforeseeable events, i.e., shark, tsunami, storms etc. I came away from the weekend seminar with mind boggling amounts of techniques and info. While I feel confident if I just follow the steps taught and “land” swim for several months I should be able to feel good enough to dip my toes in the kiddy pool. Its been 3 months and I heard there is a sequel to the boot camp class with secrets to more exotic swim techniques. That’s a $10000 one week course with the head trader from xxxx guru firm…….
---------------------------------------------------------------------------------------------
The reality is, I did take one of those boot camp seminars in late 2001 and paid $3495 for the experience. I don’t quite remember what was all taught that weekend (and I sold the class manual to some guy for $500 a year later). I did remember how difficult it was for my buddy and I to conceptualize calendar spreads as newbies. $3495 was well spent in that it was “commitment” money that kept us plowing forward to this day.

Today, with the amount of free options info and tools available to anyone, the same problem exists for new comers to the game - too much information all at once. For that problem, I offer this bit of advise:

• Have access to a risk graphing tool like the one built into Thinkorswim.
• Your very first goal would be able to (on the fly) give examples of strike selection and reasons for trading single long/short options, explain pros and cons of each position in relation to simple delta and time concepts.
• Once the above is mastered, venture onto simple vertical spreads, then combinations of verticals.
• Once the above is mastered venture onto vega sensitive spreads such as calendar spreads.
• Any other exotics should be last to consider.

Just as swimming takes time in bite size chunks of learning, learning options is best to start from the ground up, one stage at a time, with each new stage building on the prior stage. I see too many people asking about spreads when they have no clue even how time and delta work on single options!!! Take the time and be patient. We are here to help but you have to meet us half way by doing your part.

OT - DDR: Amazing five year old kid

DDR, for those of whom do not know, its a video game Dance Dance Revolution.