Co-worker putting all $ in the S@P

smart move & great advice.......i`m doing the same.....i`m kicking my 7 shares of Berkshire at the open & going in at market on S & P......i`m sure they`ll give me a fair price.
 
This is a no-risk trade for the guy.

If the market goes up he will make a lot of money if he bought a ton of contracts.

If the market goes down, he can simply sue his broker to get the money back. After all, advising a buy and hold investor of BA to dump the stock and invest in futures is so beyond negligent and in violation of so many NASD rules on "knowing your customer". Advising a stock guy to jump into futures? Slam-dunk case in arbitration.
 
I think we need some more clarity.

First, is the guy buying S&P futures contracts?? S&P Options?? Or simply the SPY on an unleveraged basis?

This is important. If the answer is either of the former two, and this represents a large portion of the guy's portfolio, then it's a big mistake. The latter - while still imprudent, won't destroy the guy assuming he is not leveraged, willing to hold for a while, and average his position over time.
 
This reminds me of my favorite series 7 question I remember from 4 years ago. It was something a long the lines of this:

Grandma Ethel is a very conservative person on a fixed income. As her registered Rep, what would be appropriate to advise her to invest in given her situation?

A. Wildcat Exploratory Oil Drilling Program
B. The lastest and Hottest Internet Stock
C. Annuities
D. Daytrading Futures

Personally, i think Grandma could could tear up the ES on a daily basis but thats just me :)


Quote from optioncoach:

This is a no-risk trade for the guy.

negligent and in violation of so many NASD rules on "knowing your customer". Advising a stock guy to jump into futures? Slam-dunk case in arbitration.
More...
 
Quote from Steve Tvardek:

This reminds me of my favorite series 7 question I remember from 4 years ago. It was something a long the lines of this:

Grandma Ethel is a very conservative person on a fixed income. As her registered Rep, what would be appropriate to advise her to invest in given her situation?

A. Wildcat Exploratory Oil Drilling Program
B. The lastest and Hottest Internet Stock
C. Annuities
D. Daytrading Futures
..."
More...

NASD must be trying to swell the ranks of RRs... they never used to ask such easy questions. :D
 
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