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Agreed, you need an edge and money management. I define edge as a positive expection of a series of like "investments". I define money management as knowing the proper size (% of capital) compared to your edge (basically the concept of Kelly). The above would certainly be very helpful...

I agree with you, the strategy should be a loser, Therefore the question should be, why combine a losing strategy with SPY for a 10-20-30 year time frame? Cardinals just won!!! :eek:

Let's assume for the moment that I do not want to buy the SPY and instead just sell the calls as described above. How well would I do with that strategy over a 10-20-30 year time frame?

Actually, he would have $1900 left, not $1700. He would lose $2 on the stock but make $1 on the call.

I was trying to address this in my post at the top of page 6 in this thread. For this discussion I would like to focus on just the option and forget about adding hedging techniques at this time. For the option, the seller will "win" more times but at a fixed or lower rate. The buyer will "win"...

What is your conclusion from what you wrote above?

The above thread should be required reading for anyone considering options but it needs added discussion. In my opinion, the real issue in that thread was only indirectly touched on by one poster that mentioned percentages. There was no discussion of edge. I see threads, as well as many books...

with pizza??? :eek: To each his own. :)

Yes, I have done the math. I now almost always only buy an option and not a spread (spreads are still useful in certain situations). I found that I was giving too much away with the short option as well as the additional commissions to be worth the "reduced risk". All the reduced risk did for...

Your observation is correct. If you can make money with spreads, you can make more money without the spread. The spread costs you in more commissions and the amount you "lose" by having the short option. The spread will tend to have a smoother P/L curve than just owning the long option...

No. Up yours! :D

You're :eek: :)

Please explain. Does this also apply to other depreciating assets like TV/stereos, furniture, appliances etc?

That's exactly the risk of CC's. Limited profits, "unlimited losses". Sounds backwards to me.

If you think I'm here to sell something to newbie traders though, you're a <b>J</b>enious (with a capital J), because that's the last thing on my mind. Pot, kettle, just trying to keep it real. Let's worry about the message and not nit-pick.

I think that a lot of spelling errors are actually typos, no problem. The issue for me is the use of the wrong word that gets in the way of the message. I am very surprised by the constant incorrect use of the words lose and loose on this and other message boards. I don't know what makes it...

It is wise to learn from your mistakes but it is wiser to learn from someone else's mistakes. What you are not seeing (or understanding) in the replies is that this is a path that has been traveled by many thousands before you. It would serve you well to understand the reason behind the...

I assume you will leave the above out of your prospectus. I will assume that you are sincere in your purpose but it does not warm my cockles to see you post the above sentiment.

I wouldn't be so quick to dismiss this offer. It appears that these systems were recently back-tested. http://www.elitetrader.com/vb/showthread.php?s=&threadid=147359 :)

A degree can be an entry ticket. It doesn't guarantee that you will be successful. There are many jobs/professions that you cannot even apply for unless you have a degree. This doesn't mean that you couldn't do the job if you didn't have a degree but you will never get the opportunity to find...