Seems options is becoming a big thing, now on TV :)

KINGOFSHORTS · Sep 10, 2009

Looks like CNBC is touting options with a special program called "options action"

I saw a clip, mainly they were discussing collars and kept it pretty simple. Nothing too speculative.

Interesting that its now becoming something that the financial TV shows are gonna air on a regular basis.

The good thing so far is at least it will show the user how options could be use to hedge a position instead of just going naked long equity

damon_achey · Sep 10, 2009

This show is sponsored by and mostly written by ThinkOrSwim. Being an option house I can see how it's in their favor to try and get more option information to the masses even if it's fairly basic.

KINGOFSHORTS · Sep 10, 2009

Quote from damon_achey:

This show is sponsored by and mostly written by ThinkOrSwim. Being an option house I can see how it's in their favor to try and get more option information to the masses even if it's fairly basic.

At least they are showing the individual investor that options can play a role in your portfolio as a way to hedge.

I thing people are scared of going naked long and offering options as a way to hedge a bit will probably make people a little more comfortable jumping in.

I explained to someone the whole collar thing a while back and they liked the fact that you can provide yourself some insurance on your equity just like with car insurance etc..

90% of folks have no clue you can insure your stock from disaster just like you do your home. (even if it just means going long put without a collar)

erol · Sep 10, 2009

i tried to explain to someone how they can cover themselves from disaster using collars.

Maybe I didn't explain it well, but they said it was too complicated for them... which is what I suspect the majority of people think,

spindr0 · Sep 11, 2009

Quote from erol:

i tried to explain to someone how they can cover themselves from disaster using collars.

Maybe I didn't explain it well, but they said it was too complicated for them... which is what I suspect the majority of people think,

Some people are too arrogant to believe that investors can do better than their prestigious Fool Service Brokers or the managers of their mutual funds. And most people's eyes just glaze over when you present them with an alternative that might take a bit of effort.

dagnyt · Sep 11, 2009

Quote from erol:

i tried to explain to someone how they can cover themselves from disaster using collars.

Maybe I didn't explain it well, but they said it was too complicated for them... which is what I suspect the majority of people think,

Try sending them to this explanation of a collar:

http://tinyurl.com/lwxo4x

Mark

Tom1am · Sep 11, 2009

Most people think its
1. a too good to be true scam
2. too risky
3. too hard to comprehend (this stuff isn't easy)
most financial planners don't offer it because its too much work getting investors to understand it and many don't understand it themselves.

It has not been touted by the mainstream media enough yet.

..and if you want a real picnic, lets talk taxes.

drcha · Sep 11, 2009

I'm just glad to see it discussed in the mainstream media, however poorly it is presented. The more people who are trading, the more liquidity we will get. And hopefully a few of them will even make some money.

dagnyt · Sep 12, 2009

Quote from Tom1am:

most financial planners don't offer it because its too much work getting investors to understand it and many don't understand it themselves.

Planners don't learn about about options.

They cannot afford to think outside the box. If client loses money on any advice that does not adhere to the Prudent Man Rule, the planner/advisor risks being sued.

Mark

Tom1am · Sep 12, 2009

Quote from dagnyt:

Planners don't learn about about options.

They cannot afford to think outside the box. If client loses money on any advice that does not adhere to the Prudent Man Rule, the planner/advisor risks being sued.

Mark

I guess I do not understand why low risk strategies like collars would not adhere to the prudent man rule. It would seem that using such vehicles would exemplify the prudent man rule, especially since sometimes clients insist on being overweight in a position (Gannett comes to mind here).

Yet in discussing topics with FP's many do not even have a bear market strategy. Sad but true. I would like to know if any FPs on this board use options.