Buying calls for a living and arguing with derivman

Here is a deep-in-the-money call strategy advocated by some ex baseball player guy called Lenny Dykstra now writing for thestreet.com (Sorry, I am not from the US so these baseball "stars" names mean nothing to me :p )

http://www.thestreet.com/_tscana/comment/celebrityinvestor/10260898.html

I do not advocate his strategy but it might be a good starting point to develop your own, modified call-buying strategy:

Pro:
- Strict set of rules
- Maximum loss set to value of calls bought

Negative:
- Dollar cost averages into option positions while time premium decay eats away potential profits

Money management here is key. You alway have to keep some powder dry so you can average into positions should they go against you.
 
Quote from daddy'sboy:

Right you are chief, let's stick to the topic! 'Buying calls for a living' has so far been very entertaining but not much of use has come up yet. Perhaps you'd like to start by contributing something noteworthy rather than continuing to say things like:
'I shall be making a reply later to tc5 which you may also find interesting.'
You might want to stick to the topic yourself or I'll have to report you to the moderator for continually being evasive and wasting people's time
Cheers :D.
db
More...

Thanks for the reply daddy'sboy and your altered posting technique has been noted and appreciated. I can assure you I am not trying to evade anyone or anything. The very civil reply by tc5 has led me to reflect on certain personal matters over the weekend. Following this reflection, and in light of the honesty and decency showed by tc5, I am now going to post some information that may well be of interest to you. Please note that I have other things to attend to as well, so if my post does not appear for a while this does not mean that it is not coming. Again, your replies are very much appreciated once you stay on topic. Cheers.
Derivman
 
Quote from makloda:

Here is a deep-in-the-money call strategy advocated by some ex baseball player guy called Lenny Dykstra now writing for thestreet.com (Sorry, I am not from the US so these baseball "stars" names mean nothing to me :p )

http://www.thestreet.com/_tscana/comment/celebrityinvestor/10260898.html

I do not advocate his strategy but it might be a good starting point to develop your own, modified call-buying strategy:

Pro:
- Strict set of rules
- Maximum loss set to value of calls bought

Negative:
- Dollar cost averages into option positions while time premium decay eats away potential profits

Money management here is key. You alway have to keep some powder dry so you can average into positions should they go against you.
More...

Thank you very much for the kind post makloda. I find the following quite interesting from your article.

"Of the numerous emails I receive on a daily basis, unequivocally the most frequent request is for me to explain how to capitalize on in-the-money calls. For many, options remain the most misunderstood investment vehicle out there. But the "buy and hold" days are gone! The sooner you all realize that, the more frequently you will be depositing money in your account! In order to be a winning trader, you have to be willing to change with the times."

Also this is very interesting.

"I also appreciate, albeit in a different way, the negative emails that I have received, questioning my credentials and my picks. I realize that I am still a rookie, who has to earn respect through sustained performance. Again, I would like to thank TheStreet.com for providing me with this opportunity. I look forward to 2006, where I plan to write regularly about my in-the-money calls strategy, beginning with today's overview."

I think that learning can be accomplished in many ways, and we each must read an article and make up our own mind. Again, thank you for your kind thoughts in posting and you are welcome to post what ever material that you yourself think may hold some value. If you see some value in it, then so may others, and between us we can then draw a conclusion as to how accurate the information is, and is it real value or perceived value. Thank you again. Cheers.
Derivman
 
Quote from Derivman:

Thank you very much for the kind post makloda.
More...

OK, so for the sake of my own learning here, please entertain these questions, kind sir.

This completely 'off topic' post gets a thanks for the valuable contribution, but cold hard facts pertaining to the questions you ask go through to the keeper?

Are real, properly presented facts, from people who a) run the home of the very market you are wanting to learn to trade or b) have actually worked on a trading floor, going to form any part of the foundation you say you are trying to build?

Or are you more interested in building a house of cards?

Could you please stop wasting time answering every insignificant diss that has been posted & get on with posting the promised revelations. . .

(PS - yes ET'ers I am smacking my forehead and repeating 'fished in' over and over to myself!)
 
Quote from Derivman:
I think that learning can be accomplished in many ways, and we each must read an article and make up our own mind. Again, thank you for your kind thoughts in posting and you are welcome to post what ever material that you yourself think may hold some value. If you see some value in it, then so may others, and between us we can then draw a conclusion as to how accurate the information is, and is it real value or perceived value. Thank you again. Cheers.
Derivman
More...
Don't listen to the egomaniacs attacking you here. They feel they earned - through years of experience and learning - the right to make fun of newcomers. They might have had a bad day and think they will feel better after they kick somebody like you around. Don't take them serious.

Just remember you should do your own homework. If you wish to learn about call-buying strategies

1. Read as much as you can about both theory (!) and practice of using options strategies. Options are vastly different from stocks.
2. Understand that every approach has different risk/reward characteristics. There is rarely (or rather: never) a way to outsmart the system and increase the rewards (profits) without increasing your exposure to risk.
 
Quote from anti ad hominem:

OK, so for the sake of my own learning here, please entertain these questions, kind sir.

This completely 'off topic' post gets a thanks for the valuable contribution, but cold hard facts pertaining to the questions you ask go through to the keeper?

Are real, properly presented facts, from people who a) run the home of the very market you are wanting to learn to trade or b) have actually worked on a trading floor, going to form any part of the foundation you say you are trying to build?

Or are you more interested in building a house of cards?

Could you please stop wasting time answering every insignificant diss that has been posted & get on with posting the promised revelations. . .

(PS - yes ET'ers I am smacking my forehead and repeating 'fished in' over and over to myself!)
More...

Thanks for the post anti ad hominem. Firstly, you are not obliged to post on this thread and no one is holding a gun to your head, so as to speak. Secondly, us newbies tend to ask questions that may appear off topic to the experienced traders at Elite Trader, but they are not off topic as far as the newbie is concerned. When makloda took the time to post the comment, he /she (apologies as I am not sure if makloda is male or female) went out of the way and for that I am grateful, in the same way that any reasonable thinking person would be. Thirdly, in relation to presenting facts, I have gone to great lengths to consult my notes and post the appropriate links that I think are relevant to this thread, which I started. The name of the thread is " Buying calls for a living" and the purpose is to debate this title with a view to establishing if this is the best approach for a newbie like myself to take. If, through the postings put up by Elite members, it become apparent that buying calls may not be the best way to trade Options, for the reasons given, and this opens up another debate as to what the best approach may well be for newbies, then the thread will have indeed fulfilled its purpose. With that said, I encourage any member to post whatever they think themselves is relevant to the topic, and do not be worried if you are off topic, once you are not displaying signs of bullying or mockery then that is fine with me. I actually think it will be very productive and will enhance the learning achieved by all who partake in the discussions. I would like to take this opportunity to again thank makloda and for his / her input, and also remind others that bullying or mockery will not be tolerated. Also, I am not forgetting my reply to tc5, who was very kind and considerate and deserves a full and frank reply. Cheers.
Derivman
 
Quote from makloda:

Don't listen to the egomaniacs attacking you here. They feel they earned - through years of experience and learning - the right to make fun of newcomers. They might have had a bad day and think they will feel better after they kick somebody like you around. Don't take them serious.

Just remember you should do your own homework. If you wish to learn about call-buying strategies

1. Read as much as you can about both theory (!) and practice of using options strategies. Options are vastly different from stocks.
2. Understand that every approach has different risk/reward characteristics. There is rarely (or rather: never) a way to outsmart the system and increase the rewards (profits) without increasing your exposure to risk.
More...

Again, makloda, I would like to thank you for your kind support and trading related posts. Your efforts to help others, especially newbies like myself, I am sure have not gone unnoticed by many. You are indeed a kind person and may your trading bring you an abundance of wealth and prosperity. Thank you again for the kind words and assistance. Cheers.
Derivman
 
And I think also that a word of thanks is in order for your generosity (not to mention time) in replying to all these posts, Derivman. So, thank you, for your efforts are much appreciated in continuing to contribute to this most excellent of topics. Keep up the good work and may the Lord smile kindly upon you.
Oops, almost forgot to answer the topic in question - yes, buying calls for a living is indeed a splendid undertaking.
And may God bless you in all his/her glory.
db
 
To be fair and provide a balanced view, I must say that selling calls could also be a fine undertaking.
But wait! I know this may be a little off topic but buying PUTS for a living is also a good idea, as is selling them.
And if you really want to make a good living then you could combine the buying and selling of the aforementioned in many combinations - the only limit being your delightful imagination.
db
 
For the sake of efficiency can we just assume that Derivman is stating that option trading, meaning hedges and other instruments in combination with option contracts, is not a zero sum game? We would all agree with that statement and his links confirm this. OptionsXpress states "trading is not zero-sum" they don't and would not say option contracts in and of themselves are not zero-sum. I would be happy to help you but after quite a few pages of sound and fury signifying nothing, can we move on to an actual topic?
 
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