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MJ DeMarco

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I mentioned a few times in both my books that there are NO financial experts when it comes to the markets... one says doom-and-gloom, another says to the moon!

Here are some interesting charts that counteract common financial mantras... mantras such as:

It can't go to Zero...
Housing only goes up...
It is oversold...
Expert Y says to sell now...


Put These Charts on Your Wall…

The truth is, there is only ONE sure thing in finance, and that's the passage of time. And that's why I believe SELLING options (intelligently) is the best investment out there. When you sell an option, you take the position of the house and benefit from the passage of time. As an option moves toward expiration, it naturally deteriorates in price.

Anyhow, if that investment philosophy interests you, I've created a 30+ page thread on the INSIDE (spanning nearly 2 years) on the how to wisely trade in that manner. And it's completely transparent. Obviously not for everyone, but the skillset is nice to have.

A key concept for "Fastlaning" anything is to make time your ally as opposed to your enemy. Sitting around waiting 50 years for the SP500 to make 12% a year is putting time on the wrong side.
 
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inputchip

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Link broken?

A private equity representative sold me on a "great" investment opportunity that could not fail unless the world economy collapsed.

It's now been two years. The company has filed for bankruptcy.
 
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ZF Lee

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I mentioned a few times in both my books that there are NO financial experts when it comes to the markets... one says doom-and-gloom, another says to the moon!

Here are some interesting charts that counteract common financial mantras... mantras such as:

It can't go to Zero...
Housing only goes up...
It is oversold...
Expert Y says to sell now...


https://pensionpartners.com/put-the...onpartners.com/put-these-charts-on-your-wall/

The truth is, there is only ONE sure thing in finance, and that's the passage of time. And that's why I believe SELLING options (intelligently) is the best investment out there. When you sell an option, you take the position of the house and benefit from the passage of time. As an option moves toward expiration, it naturally deteriorates in price.

Anyhow, if that investment philosophy interests you, I've created a 30+ page thread on the INSIDE (spanning nearly 2 years) on the how to wisely trade in that manner. And it's completely transparent. Obviously not for everyone, but the skillset is nice to have.

A key concept for "Fastlaning" anything is to make time your ally as opposed to your enemy. Sitting around waiting 50 years for the SP500 to make 12% a year is putting time on the wrong side.
Bingo, MJ.
But I am sure stock options isn't the only one in the toolbox, right?
I used to think that real estate was the better one since you could borrow money from the bank for it.
It was the Kiyosaki vibes hehehe...and I subscribed to his advice like a dumbass.

Then I read up John T Reed, a harsh critic of Kiyosaki and another tough love real estate expert.....

I just never like losing my hard earned cash even in my efforts for UNSCRIPTION. But too many people just invest to lose money...too many.

This thread should be a notable to get people to compare the advice gurus give with advice that a multimillionaire gives lol.

EDIT: I googled up the link and found it still works. Here is it, hope it is accessible from here.
Put These Charts on Your Wall…

And there is tons of good reading material here too on this blog. Thanks @MJ DeMarco!
 
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MJ DeMarco

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mike24601

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You're all too right! I learned my lesson earlier this month when I decided to invest in a certain retail stock. It was trading near its 40 year low but with a very positive outlook for new growth and bullish optimism. I thought "wtf, this must be the bottom. Let's go long and see what happens." North Korea happened, they missed on earnings, and the options traders ate us for lunch as the stock fell into oblivion. It was only a slightly expensive lesson, but I was glad to pay for all the learning I got out of it.
 

BrooklynHustle

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Link broken?

A private equity representative sold me on a "great" investment opportunity that could not fail unless the world economy collapsed.

It's now been two years. The company has filed for bankruptcy.
:rofl::rofl::rofl::rofl::rofl:
 

MidwestLandlord

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One of those charts showed VIX at over 80!!

Oh man, I'd love to sell some premium on that, but I hate to think what my already sold option values would look like. Yikes.

Thanks for the link @MJ DeMarco , quite the eye opener.
 

AA1980

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I mentioned a few times in both my books that there are NO financial experts when it comes to the markets... one says doom-and-gloom, another says to the moon!

Here are some interesting charts that counteract common financial mantras... mantras such as:

It can't go to Zero...
Housing only goes up...
It is oversold...
Expert Y says to sell now...


Put These Charts on Your Wall…

The truth is, there is only ONE sure thing in finance, and that's the passage of time. And that's why I believe SELLING options (intelligently) is the best investment out there. When you sell an option, you take the position of the house and benefit from the passage of time. As an option moves toward expiration, it naturally deteriorates in price.

Anyhow, if that investment philosophy interests you, I've created a 30+ page thread on the INSIDE (spanning nearly 2 years) on the how to wisely trade in that manner. And it's completely transparent. Obviously not for everyone, but the skillset is nice to have.

A key concept for "Fastlaning" anything is to make time your ally as opposed to your enemy. Sitting around waiting 50 years for the SP500 to make 12% a year is putting time on the wrong side.

I work in the investment business and can't tell you how many times I've heard all the sayings above. Mj couldn't be more correct.


Sent from my iPhone using Tapatalk
 

mom

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selling options is the best thing out there?

Naked? It's like going without insurance and getting away with it 99 times them bam...even funds that specialize in credit option selling (not naked options) go through 40%+ losses and they say they speciaize in low risk investing methods...

What you are telling people will some day result in total losses and more possibly.

I expected much better...to advise such a poor trading method.
 

mom

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That goes for anything though...you can't guarantee you'll be alive tomorrow. And any one with an ounce of common sense should always know with money/investments/business there is risk to some degree.. I would have expected everyone on here to be fully aware of that at least....Seems not?

I think it's more an indication of how stupid the buyer is if they believe anyone that says "guaranteed" they are trying to sell you something and you fell for it.
 

MidwestLandlord

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selling options is the best thing out there?

Naked? It's like going without insurance and getting away with it 99 times them bam...even funds that specialize in credit option selling (not naked options) go through 40%+ losses and they say they speciaize in low risk investing methods...

What you are telling people will some day result in total losses and more possibly.

I expected much better...to advise such a poor trading method.

Wanna be fastlane? Be open-minded.

I'm not attacking you here, or trying to start a fight. But, I want to point out that the same people who say "options are uber risky!" are the one's saying to invest in stocks, which have only a 50% probability of profit.

A well placed options trade can have a 80% or more probability of profit. Big difference.

If you had 80%-90% odds at the casino, would you ever leave? Or would you just chalk the 10 or so out of 100 bets that went against you as a cost of doing business and keep on rolling the dice?

I'm an options trader.

For the uneducated, risk adverse folks out there...yeah, options are not a good vehicle for wealth generation.

But for those that can trade methodically, have a system they follow without letting emotions get in the way, and can shrug off the 10%-20% of trades that lose money, it's like printing money.

It's quite magical actually.

My only problem with option trading (75% of my trades are naked), is that it is really, really boring.
 

MJ DeMarco

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I expected much better...to advise such a poor trading method.

Ah yes, the anonymous skeptic is here to dispense his anonymous advice. Naked options are risky! Wooooooo I'm scared. The same clowns say starting a business is risky. A naked option on a pharma company is not the same as a naked option on Caterpillar.

how stupid the buyer is if they believe anyone that says "guaranteed"

Time passage is guaranteed, therefore so is theta.

I expected much better...to advise such a poor trading method.

Darn it.

Sorry to ruin your expectations and not carry the water for Goldman Sachs and Money Magazine. Guess I need to call someone and return all the money I've made.

with money/investments/business there is risk to some degree

Buy 100 shares of stock at $10, stock goes to $0 -- lose $1000.
Sell $10 put option at $1, stock goes to $0 -- lose $900.

Seems like buying stock is a more riskier play. But because it's clouded by unlimited gain fantasies, the risk gets a mulligan. Instead, it's is cheered on by the world's fiscal sycophants who make $$ preaching the fantasy to the peasants patiently waiting for their Vanguard Index 500 fund to make them 8% for the next 50 years.

The myth is fine by me, the more people like you who walk around regurgitating "options are risky" the better for me.

Or would you just chalk the 10 or so out of 100 bets that went against you as a cost of doing business and keep on rolling the dice?

Yes, it's all about perspective. I don't look at option selling as an investment, I look at it like a business, much the same as selling insurance. There will be times when you will have claims. As you say, a cost of doing business. Likewise, the real estate business also has claims: Broken A/C unit, new roof, deadbeat tenants, etc.

I treat the option business like an insurance company and like an insurance company, reinsurance needs to be part of the game.
 

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I'm not going to take a side on this but I can say that probability is only one part of the profitability/expectancy formula. You also have to also consider the average win & average loss in dollars.

Profitability = %win * $avg win - %loss * $avg loss

There are trading systems with high probability of losing trades that are profitable and there are trading systems with high probability of winning trades that are unprofitable. For example, if you have a system that has 70% winning trades but the average loser is 3x the average winner you have an unprofitable system.
 

ZF Lee

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For the uneducated, risk adverse folks out there...yeah, options are not a good vehicle for wealth generation.
The keywords are 'uneducated' and 'risk adverse'.

Both can be overcome so at the end of the day, it's no biggie to me.
Yes, it's all about perspective. I don't look at option selling as an investment, I look at it like a business, much the same as selling insurance. There will be times when you will have claims. As you say, a cost of doing business. Likewise, the real estate business also has claims: Broken A/C unit, new roof, deadbeat tenants, etc.
Bingo.
 

MJ DeMarco

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What about units?

reinsurance needs to be part of the game.

Yes, just to be clear for other bystanders, when I say sell options, I don't mean sell options totally unprotected. I also don't mean sell options on any random company. There are specific underlyings that work, and others that should be avoided.
 

cmor16

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I believe SELLING options (intelligently) is the best investment out there.
selling options is the best thing out there?

OP missed the most important word in your message. I will bold and underline it just so it's clear.

INTELLIGENTLY!!
 

Ywan

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The truth is, there is only ONE sure thing in finance, and that's the passage of time. And that's why I believe SELLING options (intelligently) is the best investment out there. When you sell an option, you take the position of the house and benefit from the passage of time. As an option moves toward expiration, it naturally deteriorates in price.

Anyhow, if that investment philosophy interests you, I've created a 30+ page thread on the INSIDE (spanning nearly 2 years) on the how to wisely trade in that manner. And it's completely transparent. Obviously not for everyone, but the skillset is nice to have.

This sounds very interesting. As a complete noob, I have a few questions:

Is this strategy still viable? (I am asking, as this thread is already a couple of years old and I don't have an insider subscription at the moment to check it out.)

What is the minimum amount of money that one would have to invest to really make this strategy work? From what amount of money does this strategy make sense?


Thanks.
 

Mathuin

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This sounds very interesting. As a complete noob, I have a few questions:

Is this strategy still viable? (I am asking, as this thread is already a couple of years old and I don't have an insider subscription at the moment to check it out.)

What is the minimum amount of money that one would have to invest to really make this strategy work? From what amount of money does this strategy make sense?


Thanks.
View: https://www.youtube.com/watch?v=woIcaSSNNn8&t=1311s


MJ talked about this on Invest Like A Boss podcast. Starts talking about Options selling around 20 minute mark.
 

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I'm planning on buying 12-24 month LEAPS and selling poor man's covered calls using the LEAPS as collateral. First time trading options. I did buy some $AMC & $GME shares, but sadly I had to sell those shares as I needed to get hold of cash, I otherwise I'd be hodling them and collecting those sweet sweet premiums.

I'm joining #ThetaGang
 
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MJ DeMarco

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Is this strategy still viable?

It has even been MORE VIABLE in the last 2 years because

A) Option prices have skyrocketed, hence premium selling is more rich.

and

B) The market continues to rise.

I'm planning on buying 12-24 month LEAPS

I own several million (notional value) of real estate LEAPS -- not for an investment, merely an insurance policy/hedge against inflation and/or currency destabilization. Not sure if I will be happy making money on them which means the former premises will be coming to pass...
 

MJ DeMarco

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What is the minimum amount of money that one would have to invest to really make this strategy work? From what amount of money does this strategy make sense?

Sorry I skipped your question... I think you can start with $5000 as long as you find a brokerage that allows short option sales, like TastyWorks or TastyTrade. BTW, the 2 aforementioned resources provide a lot of education on mostly selling strategies. Though with only $5K, you will be very limited in your activities.
 

Ywan

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Sorry I skipped your question... I think you can start with $5000 as long as you find a brokerage that allows short option sales, like TastyWorks or TastyTrade. BTW, the 2 aforementioned resources provide a lot of education on mostly selling strategies. Though with only $5K, you will be very limited in your activities.

Great, I am eager to learn this. Just so I don't have false expectations: how long do you think it will take to master this skill?
 

MJ DeMarco

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how long do you think it will take to master this skill?

I've been trading options for... well I can't remember, at least over 10 years.
 

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Great, I am eager to learn this. Just so I don't have false expectations: how long do you think it will take to master this skill?
Read everything. If you are good at following directions, then thinking creatively and problem solving, you will pick it up quickly.

You also need to be somewhat cautious if you want to do well. Otherwise you’ll blow up your account gambling on the WSB flavor of the week...

I learned it here from MJ and have been beating the market by a few percentage points YTD, made about $7k profit so far (started last year but 7k is profit for 2021).

The hard part is finding the right stocks. I do a lot of stock screening and reading reports and ratings. Companies with low debt, high Return on Equity, and a good balance of other fundamentals - that I have actually heard of before - have done well.
 
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Taktik

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Sorry I skipped your question... I think you can start with $5000 as long as you find a brokerage that allows short option sales, like TastyWorks or TastyTrade. BTW, the 2 aforementioned resources provide a lot of education on mostly selling strategies. Though with only $5K, you will be very limited in your activities.

Does anyone happen to know if TastyWorks or TastyTrade are also approved in the EU? If not, can anyone recommend a good alternative for Europeans?
I appreciate it. Thanks.
 

Matt Sun

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Read everything. If you are good at following directions, then thinking creatively and problem solving, you will pick it up quickly.

You also need to be somewhat cautious if you want to do well. Otherwise you’ll blow up your account gambling on the WSB flavor of the week...

I learned it here from MJ and have been beating the market by a few percentage points YTD, made about $7k profit so far (started last year but 7k is profit for 2021).

The hard part is finding the right stocks. I do a lot of stock screening and reading reports and ratings. Companies with low debt, high Return on Equity, and a good balance of other fundamentals - that I have actually heard of before - have done well.
You mind telling how much money you used to earn 7k this year so far?
 

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