i don't remember the exact strike but the near mnth puts,in the oex,probably octobers in the 87 crash,closed at an 1/8,$12.50,the friday before the crash and traded $60 on monday,one guy lost $50 million in short puts and left the clearing firm holding the bag after they took his $3 mil in his limited liability corporation, that is how fast it can happen
Get The Hell Out: Part II
- Thread starter ByLoSellHi
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Without commenting on Nitro, because I have no idea what happened or way, thanks for the wise words, Jack.
That is unbelievable.
I will say this; I would not be confident using much leverage in waters like these.
But if I did, it would be with options, and definitely not margin.
Personally, I think that is the key to wealth. An 18% average return per year will double your money every 4 years. 36% will do it in two years. You don't have to be highly leveraged, or fully invested at all times to have a very nice chunk of money.
Unfortunately many are impatient and want 18% a week or month. That need for GREED gets them clobbered. Those are the guys that blow up their accounts during tough times and commit suicide after they lost everything. I have no pity for them because they were seeking more from the market than can be reasonably expected. Greed will always eventually screw you, and there will always be someone smarter than you figuring out a way to take your money.
Preservation of capital is key. It always has been, and always will be.
He claims, "next president must first and foremost do something about the economy..."
Well, I've got some bad news for you. There's nothing that can be done about the US economy!
To put the US back onto a growing and healthy economic track, we'd need to come up with "something we could make" or a "service we could provide"... to the benefit of many American workers. But anything involving labor will be made cheaply overseas. Any significant service can also be provided more cheaply from overseas.... unless it's "service at the point of consumption".
Of course, the Gummint will run ever bigger deficits and the Fed will run the money-pump on steroids. GDP will be measured in "prices paid for goods and services"... which the Gummint will call "growth"... but it's really just inflation.
With our mountains of debt, vulnerability to oil supplies and prices and the Boomer demands upon Social Security and Medicare, the future of the US economy is stagnant/declining and inflationary.
AFAIK, it's not a return issue. This is a superb trading market, a real blessing for seasoned traders.
My concern is which broker will go down next so I can pull my money out asap.
I don't think there are so many active traders at this point to support the expensive infrastructure of all brokers out there.
Bill
True, but are you aware that only in the US there are twice as many funds as individual stocks?
Electronic trading makes operations very expensive. You need to constantly update software, keep up with changes and employ a good number of highly paid IT professionals to keep your business going.
Compare that to 10 years ago. Just a few brokers paid mostly on commission, a telephone switching system, bloomberg or something less expensive and a couple of secretaries and back office people. You could start a business like that with 100k down. Minimal running expenses too.
Big names will fall soon. Revenues do not cover expenses anywhere near.
Bill
Now is probably the time to get back into the market rather than get out.