Recent content by paradigm

Thanks for your reply. I need to think about the strategy itself a bit. I have a couple of ideas that I will work through and see if they make sense. I like puts because of their properties, especially the limited risk, and leverage. I am aware of some other shorting mechanisms. There are...

Replying to myself, I swear I'm not insane. I will have a read of this "Options as a Strategic Investment" by Lawrence McMillan.

Is there any way to protect against this chase down but not be locked in to 24 month illiquid markets? For example, if I bought overlapping contracts ? Say, every three months I purchased a six month option so there was a consistent three-month overlap in holdings. Do you know of any...

Is it THAT interconnected? I'd have to open an international options account somewhere... CBA PEARLS are, from their prospectus: "subordinated unsecured notes" I also find it strange that they call them PEARLS when there is already another investment type commonly referred to as PEARLs that I...

OK I am more on board with a more reasonable price assessment. In terms of the actual payment/coverage strategy though I like the idea of treating it like insurance rather than something to roll but my question remains. Is three months a standard? Is there a reason for this time frame?

Maybe 0 is a bit wishful but I disagree with the housing supply argument. In markets where there is a supply problem rental prices track with price for the houses. Not one-to-one but Australia's house-price-to-rental-price ratio has been diverging for years now and people have spoken of...

Non-viability clause introduced in the new style hybrids presents extra risk. https://smitrust.com.au/smblog/asic-uncovers-investor-bias-to-hybrid-securities/ When surveyed it looks like people aren't aware of the risks they are taking on. One of the main reasons that subprime mortgages were...

Oh and I think that there is a clear housing bubble as seen by the divergence of debt-to-income, house prices-to-rental-income, housing availability remains steady. Low but steady and it looks like immigration is being cut back slightly. If there were a housing stock shortage I would expect to...

No I just believe what I believe and I would like to just talk about optimal strategies rather than will it or won't it happen. But this is what I can afford to speculate with (I realise this is not an investment) and I am eager to learn and I will probably just loose $10K but I might learn...

No, I haven't made any bids. I think that the iron ore spot price is moving towards historical averages somewhere around $50USD. I think that the cost structures in Australian iron ore mines are no longer going to be justifiable and we will experience an industry down turn. In conjunction with...

I don't think there are many differences. Puts behave the same way, they have all the properties of puts. I don't know if this is different but the ASX takes a fee per option (13c) on top of broker costs so I need to formulate that into my plan but it just means I can hold fewer contracts for...

Australian market - ASX.

http://www.asx.com.au/asx/markets/optionPrices.do?by=underlyingCode&underlyingCode=CBA Sorry that the format is so terrible but those are the best I can do without linking to something behind a paywall. I see what you're both saying about liquidity and it might be wiser to trade in the shorter...

Thanks for your response. Are there any strategies for illiquid markets to optimize my position (i.e. buy as many contracts as possible)? The two year market is illiquid but the rolling 3-month market has some volume in it. Is there some way to take advantage of those properties of the market?

Hi, Let's say that I have reason to believe that a company is going to go bankrupt. I have a timeline of two years and the current price of the stock is $100. I believe it is going to $0 so I want to buy as many put options as I can with my capital which is $10,000. The current market for two...