Best Trading Instrument

Best trading instrument?

  • Commodities

    Votes: 18 40.0%

  • Currencies

    Votes: 7 15.6%

  • Stocks

    Votes: 13 28.9%

  • Bonds

    Votes: 1 2.2%

  • Other

    Votes: 6 13.3%
  • Total voters
    45
Pekelo said:
Your point was still moot. Buffett is in the investment and insurance business, not interested in trading. hahaha

Also it does help if you actually watch the video what you link to. Here, I help you out:

http://news.morningstar.com/articlenet/article.aspx?id=285699

"his strategy is twofold. First, he sells overvalued options by writing puts with very long horizons of more than 15 years, which are systematically overpriced. Second, he is making a classic Warren Buffett move, using the "float," or premium, from the options to invest. Because the options he has written are "European," which means they can only be exercised at expiration, he won't need to worry about having to pay out the notional value before expiration. All in all, this is just the type of elegant option-investing strategy to expect from a brilliant investor with a giant pool of capital.

Buffett's strategy has collected a $4.9 billion option premium so far on his $37.1 billion notional index options, but the Black-Scholes model currently estimates a $10 billion liability, so currently he has a $5.1 billion loss on a generally accepted accounting principles basis. However, on a fundamental basis, as he says, "It's only the price on the final day that counts.""
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bah bah bah, way to granular on ET, please don't take it personally. I like the fact that Mr Buffett trades options.
BuffettOptions.jpg
 
Look Lylec, bringing up Buffett for options is not better than brining him up for bonds. He DIDN'T make most of his money using options, so if you want to promote options for the sake of this thread, you should pick someone else. Using your approach I could say, hey bonds are the best instrument because Buffett trades bonds!

Why don't you mention Peterffy (an option trader) or even Mark Cuban? They would be a better candidate for your argument. Cuban didn't even trade options but used them to protect his Yahoo shares from falling while he had to wait until he was allowed to sell them. So I could argue that options played a huge role for him being a billionaire.

Anyhow, the OP's question is kind of irrelevant/moot. The answer depends on what one wants to achieve....
 
Pekelo said:
Look Lylec, bringing up Buffett for options is not better than brining him up for bonds. He DIDN'T make most of his money using options, so if you want to promote options for the sake of this thread, you should pick someone else. Using your approach I could say, hey bonds are the best instrument because Buffett trades bonds!
Why don't you mention Peterffy (an option trader) or even Mark Cuban? They would be a better candidate for your argument. Cuban didn't even trade options but used them to protect his Yahoo shares from falling while he had to wait until he was allowed to sell them. So I could argue that options played a huge role for him being a billionaire.
Anyhow, the OP's question is kind of irrelevant/moot. The answer depends on what one wants to achieve....
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Many trade options. My point is Buffett trade options also. He is more well known and wealthy than Peterffy and Cuban combined and multiplied a few times.
 
Tell me more of this man. So he trades options. How about some commodities? Heck he must be in crude oil now
 
lylec305 said:
it's a stacked deck against retail traders
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The "deck" is set up for the benefit of the biggest users. So it is stacked FOR them, not against us. The system is not out to screw the small players - but it does because we are so small are are invisible and have no voice (money). I'm not splitting hairs - if you get into the mind-set that the market as a whole is after you personally, it will impact on your trade management and risk management decisions. i.e. you will become an emotional trader, and we know this leads to failure.
 
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