Selling Options for passive income by Robert Kiyosaki

[taowave]

Define successful.

What's your benchmark?

I think people can be successful selling cash secured puts, and covered calls without getting into complicated multileg options with different expiration dates. It's like engineering, you can be a successful engineer, without being an expert in differential equations.

I think people can be successful selling cash secured puts, and covered calls without getting into complicated multileg options with different expiration dates. It's like engineering, you can be a successful engineer, without being an expert in differential equations.

 

[shMark]

I was too opinionated.

Hope you are right and I wish you the best.

But I do agree that options are not simple, and one should do a lot of paper trading, and only invest small amounts of money, before assuming they know what they are doing. I think when you get into multileg options, you really need a lot of knowledge. That's why I never attempted a simple vertical spread, which is not even considered complicated.

 

[shMark]

Define successful.

What's your benchmark?

I would be happy with the return of the stock, plus 1.5% a year. I don't expect to get rich selling covered calls and cash secured puts.

 

[Haywood]

We are speaking of a level of passion that would enable you to learn on your own. If you possessed the required level of passion you would never have to ask those types of questions on this forum or have to buy course material. You would have shown an extreme interest in excelling at math very early on, you would have self learned at a very young age, been recognized for your efforts, been admitted to a top school, aced the interviews to get into a professional trading environment and learned the trade from real professionals. If you perform even above such level you would have self taught all that independently, something only true prodeges can do. But you did not. And that means you simply lack the required level of passion. Sorry, but dreaming about something sadly does not cut it. You need to demonstrate how you put those dreams and desires into action that result in early life decisions that indicate your desire and unquenchable thirst for knowledge and experience that is directly relevant to the area of expertise you desire to be in.

Sounds harsh, but so is the market place that is dominated by math geniuses, those in the top 5% IQ wise and bring to the table the necessary level of tenacity, ability to go through pain, and desire to win win win. The remaining top players that control the market are sharks who don't mind to resort to grey zone or outright illegal ways to get what they want without any concern for others (until they get caught).

I highly second earlier recommendation. Put your funds into a passive investment account and choose a different area you want to invest in your career.

Why are you such a negative Nancy? The man asked for help. If he doesn't have the aptitude for trading, he will learn. It's wrong to put someone down because you know more than they do. I bet even you had to start somewhere or you one of the math genesis that you so fondly mention. One person's opinion. Geez

 

[shMark]

i And you are looking to compete is the options market...lol...against the smartest math nerds in the world.

Extreme difficulty.

Why the smartest math people in the world? I looked at the black sholes pricing model, which I am sure a computer will compute for you. It's sophomore level math. Clearly, you can't be innumerate to understand it, but I would think people in the top 25% in math ability would not have too many problems with it assuming they were a stem major and had the classes.

There may be other skills that make option trading hard, but I don't think math is one of them.
My gut sense is that for everyone who makes money, someone else loses money, and then you lose money on spreads, commissions, taxes, etc., and that may be the real problem.

 

[Aquillis]

Does his advice really work and help anyone? Should I try reading him?

 

[zghorner]

Does his advice really work and help anyone? Should I try reading him?

Reading Rich dad poor dad when I was younger is a big part of why I was able to retire in my 30s.

I would ignore his advice on options...and I would definitely ignore his example on purchasing properties. He loves debt...borrows a ton of money to purchase properties. This can work and I get that sometimes debt is needed, but he has also gone bankrupt several times...

#1 takeaway from RDPD: Rich people get money and spend it on things that put money into their pockets each month (assets). Poor people get money and spend it on things that take money out of their pockets each month (liabilities).

 

[ironchef]

Why the smartest math people in the world? I looked at the black sholes pricing model, which I am sure a computer will compute for you. It's sophomore level math. Clearly, you can't be innumerate to understand it, but I would think people in the top 25% in math ability would not have too many problems with it assuming they were a stem major and had the classes.

There may be other skills that make option trading hard, but I don't think math is one of them.
My gut sense is that for everyone who makes money, someone else loses money, and then you lose money on spreads, commissions, taxes, etc., and that may be the real problem.

BSM modeled the ideal world. As you said a high schooler can do the math.

The real world is not normally distributed and it is where all the PhD physicists and mathematicians are trying to model.

The good news: You don't need a PhD in physics to make money trading options and you can make money writing or buying single legs or combinations..., a gambler's paradise.

 

[newwurldmn]

Why the smartest math people in the world? I looked at the black sholes pricing model, which I am sure a computer will compute for you. It's sophomore level math. Clearly, you can't be innumerate to understand it, but I would think people in the top 25% in math ability would not have too many problems with it assuming they were a stem major and had the classes.

There may be other skills that make option trading hard, but I don't think math is one of them.
My gut sense is that for everyone who makes money, someone else loses money, and then you lose money on spreads, commissions, taxes, etc., and that may be the real problem.

the math is in the forecasting of vol and perhaps in the understanding of the partial derivatives that make up the taylor expansion of the generalized black scholes model.

but it’s nothing a mechanical engineer or physics majors couldn’t figure out.

the application of it is the harder part.

 

[shMark]

the math is in the forecasting of vol and perhaps in the understanding of the partial derivatives that make up the taylor expansion of the generalized black scholes model.

but it’s nothing a mechanical engineer or physics majors couldn’t figure out.

the application of it is the harder part.

Yes, that is what I meant. I learned all the math for that, in my sophomore year of getting my BSEE degree. I think only a very gifted high school student could do it. I certainly would have been clueless if I saw that when in high school.