Quote from achilles28:
Selling DOTM premium holds big temptation for market newbs who can't trade. Don't be fooled. The market goes up until it goes down. Ask Long Term Capital Management. Yes, there's long-term market bias to the upside inherent in debt-based money systems. The problem? When sovereign debt gets "too big" (in excess of 5 to 1, debt to tax revenue), a Portugal, Ireland, Italy, Greece or Spain happens. Check the news. US is next. I call a 70:30 chance Bernacke monetizes Americas debt/unfunded entitlements away. 70% he monetizes - stocks, commodities, real estate go to the moon = You win (writing DOTM SPY puts). 30% he doesn't - stocks, commodities, real estate crash worse than we've ever seen. You lose. You go bankrupt. This is not the up-up-and-away equity markets we've seen for the past 50 years. The new macro prism to decipher global markets is now sovereign debt. Rest assured, we're headed for a Depression either way (inflate or deflate). If all that is greek to you, step away from the table and give yourself that much needed 12 months to get literate on macro economics and the current financial landscape before you flush that 800K.
In the interim, put most of your capital with a hedge fund that has >1 Billion assets under management AND a positive YOY track record, for the past 13 years. Why 13 years? Any idiot CTA, financial adviser, or Ivy League schmuck can index their mutual fund to the S&P and look like a hero during bull markets. A rising tide buoys all ships. The real test of metal (what separates men from boys, in the investment world)? Funds that outperform during BEAR MARKETS. Remember 2008 when the market dropped 50%? How much did your CTA/Financial Adviser/Mutual Fund lose then? Positive returns over 13 years, includes 2 wicked bear markets, and is a great litmus test for competency in your prospective manager. This arena is for experts. Not rank amateurs. A handful of renowned hedge fund managers earn BILLIONS a year. And not for losing money.
I'm talking Paul Tudor Jones, Jim Simmons, Bill Gross, etc. These are the heavyweights who only manage HNW individuals. Do the search, find the right guy (PIMCO is great - min 10% annualized over 15 years, I believe), and pull the trigger. Leave that shit to experts while you get up to speed, please.
Otherwise, traders like me (and everyone else on the thread, I'm sure), are only TOO HAPPY to take the other side of your 800K on the GLOBEX or Reuters Dealing. Think about that, too. This is a game of sharks, and you're a HUGE Guppy fish out for a joy ride. Nothing personal.
Last, if you want to play around with speculation, take 10K, open an account, stick to price action, market psychology, support and resistance, basic indicators (200 MA), multi time frame analysis and basic chart patterns. That's 10 years of permutations, alone. This is no joke. Daytrading is possible (I do it). Took me 7 years to LEARN. The average is 5. Minimum screen time is 5,000 to 10,000 hours. That's not hyperbole. You have a wife and children. If you want to dabble, treat speculation like a day job, watch the ES everyday during regular market hours (wife is working, kid at school), and see what happens. When day-trading is consistent, transfer more assets from the hedge fund into your brokerage account. Do it in very small pieces. Good luck.
