Comments on: Retail stocks are for the Birds (or Bears) http://mytradersjournal.com/stock-options/2007/05/10/retail-stocks-are-for-the-birds-or-bears/ Investing in Stocks Through Options Fri, 27 Jan 2012 21:33:26 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: The Trader http://mytradersjournal.com/stock-options/2007/05/10/retail-stocks-are-for-the-birds-or-bears/#comment-8 The Trader Fri, 11 May 2007 11:39:20 +0000 http://mytradersjournal.com/stock-options/2007/05/10/retail-stocks-are-for-the-birds-or-bears/#comment-8 Good question - I'm assuming you are talking about my spreadsheets. It's all about managing risk for me. I chose strike price*100 because I like to look at my total return based on what I have invested yoo, not just per trade. Doing it this way makes it a combination of both really. Since I almost always stay 100% invested (based on the price of the underlying stock) I like 100 to be my basis. I take that one step farther and (in the "$ needed in reserves" column) I have a *0.5 at the end to bring my strike price to half of the total value. I do this to account for the fact that I try to stay close to 200% invested. That number changes for me based on my feel for the market is why I keep it at the end instead of just changing the *100. You are correct about the 20%. I haven't looked at AMTD's rules for a while on what they require, but I started off running it to the last dollar and got burned on margin calls. I learned from that and decided to try not to go for broke on everything. I made huge returns, but after a few down days the losses weren't worth the gains I made. Keeping around 40-60% backing helps me weather the bearish days/months. My email address is - <strong>thetrader <em>at</em> mytradersjournal <em>dot</em> com</strong> - thanks for catching that. I've added it to the "About this Blog" page too. Btw, I can't access my email from my office so responses will only be in the evenings or weekends.  It's like they expect me to work while I'm here. ;) Thanks for visiting... Good question – I’m assuming you are talking about my spreadsheets. It’s all about managing risk for me. I chose strike price*100 because I like to look at my total return based on what I have invested yoo, not just per trade. Doing it this way makes it a combination of both really. Since I almost always stay 100% invested (based on the price of the underlying stock) I like 100 to be my basis. I take that one step farther and (in the “$ needed in reserves” column) I have a *0.5 at the end to bring my strike price to half of the total value. I do this to account for the fact that I try to stay close to 200% invested. That number changes for me based on my feel for the market is why I keep it at the end instead of just changing the *100.
You are correct about the 20%. I haven’t looked at AMTD’s rules for a while on what they require, but I started off running it to the last dollar and got burned on margin calls. I learned from that and decided to try not to go for broke on everything. I made huge returns, but after a few down days the losses weren’t worth the gains I made. Keeping around 40-60% backing helps me weather the bearish days/months.

My email address is – thetrader at mytradersjournal dot com – thanks for catching that. I’ve added it to the “About this Blog” page too. Btw, I can’t access my email from my office so responses will only be in the evenings or weekends.  It’s like they expect me to work while I’m here. ;)

Thanks for visiting…

]]> By: grom http://mytradersjournal.com/stock-options/2007/05/10/retail-stocks-are-for-the-birds-or-bears/#comment-7 grom Fri, 11 May 2007 07:08:12 +0000 http://mytradersjournal.com/stock-options/2007/05/10/retail-stocks-are-for-the-birds-or-bears/#comment-7 Hello, I have a question. When you calculate return on investment - why are you choosing the strike price*100? You broker will most likely require 20% or much less as collaterial, so return on investment is premium/collaterial annualized. Formula is actually (.2*strike price) - diference between strike price and current price or 0.1*(.2*strike price) - diference between strike price or just $250, whatever is higher. So, I think you should divide the premium not by strike price , but by collaterial, so returns will be at least 5 times bigger. Do you agree? Also, I want to share with you my experince. I am professional trader for 5 years . And here are couple strategies that I can reveal. Let me know if you find it usefull or not. Here is the URL: http://ezinearticles.com/?Dont-Buy-Stocks-And-Bonds-Without-Discount&id=382439. Also, can you give me your email? Vadim. Hello,
I have a question. When you calculate return on investment – why are you choosing the strike price*100? You broker will most likely require 20% or much less as collaterial, so return on investment is premium/collaterial annualized. Formula is actually (.2*strike price) – diference between strike price and current price or 0.1*(.2*strike price) – diference between strike price or just $250, whatever is higher. So, I think you should divide the premium not by strike price , but by collaterial, so returns will be at least 5 times bigger. Do you agree?
Also, I want to share with you my experince. I am professional trader for 5 years . And here are couple strategies that I can reveal. Let me know if you find it usefull or not. Here is the URL: http://ezinearticles.com/?Dont-Buy-Stocks-And-Bonds-Without-Discount&id=382439.
Also, can you give me your email? Vadim.

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