Investment Talk

[cheeko]

and also ain't it the job of the FA to recommend the best performing funds to buy also

[futsal123]

Nobody can beat the market. Historical datas ain't an indicative of the future market. All it takes is just a George Soros to make asia collapse, after all the bullish runs.

[Throttle]

It's about balance and risk management.

Easy to understand very difficult to execute.

[GuiNNeSS]

anyone care to explain options?

[Throttle]

options as the word suggest is an instrument which gives you the right to buy or sell something (depends on whether it's a put option or call option) if you a holder of it.

 

If you are a seller of it, you then give the right to buy/sell the underlying to whoever holds it.

 

The payout is therefore as such.:-

 

As an option purchaser, you pay a fee (premium) to hold this option which is your ultimate lost should you not exercise the option (limited loss, unlimited profit potential)

 

As an option seller, you get a fee from others to hold the option and your loss may be unlimited depending on the movement of the underlying instrument.

(unlimited lost, profit already determined from the start)

 

Options are not so dangerous if you use them for hedging but become very risky if you are simply trading them.

 

Simple enough?

 

cheers

[eyz]

hey throttle, mind i ask, are warrants and options the same thing?

[GuiNNeSS]

options as the word suggest is an instrument which gives you the right to buy or sell something (depends on whether it's a put option or call option) if you a holder of it.

 

If you are a seller of it, you then give the right to buy/sell the underlying to whoever holds it.

 

The payout is therefore as such.:-

 

As an option purchaser, you pay a fee (premium) to hold this option which is your ultimate lost should you not exercise the option (limited loss, unlimited profit potential)

 

As an option seller, you get a fee from others to hold the option and your loss may be unlimited depending on the movement of the underlying instrument.

(unlimited lost, profit already determined from the start)

 

Options are not so dangerous if you use them for hedging but become very risky if you are simply trading them.

 

Simple enough?

 

cheers

 

 

yup.. simple to understand.. interested in this area of investing.. heard that we can put collar to minimise lost or something like tat..

[Throttle]

hey throttle, mind i ask, are warrants and options the same thing?

 

Warrants can be considered one of the simplest form of options becos it gives the holder the right to buy the underlying at a predetermined price (commonly known as strike) within a period of time.

 

Warrants are securitised so they may trade on an exchange.

 

There are many types of options, the most complex and exotic yet liquid ones being FX options. I will not dwell into that as one will need some basic foundation before making good sense of it.

 

I am no CFA holder just industry professional certification, direct related tertiary academic qualifications and quite many years of real experience using derivatives both on a professional and personal level. Both for trading and hedging purposes. But i do not consider myself a derivatives expert.

[Throttle]

yup.. simple to understand.. interested in this area of investing.. heard that we can put collar to minimise lost or something like tat..

 

if you are hold an underlying, you can also buy a put to protect your downside / lock in your profits should the market turn around.

Let me give you a direct example of a vanilla option (the simplest plain type of option).

 

 

You have an underlying instrument/asset which cost you $1

The market for that underlying is now going for $1.20

You have made already $0.20.

 

you can :-

1. sell and run with $0.20 profit

 

2. hold and wait for uncertainty

 

3. buy a put option which allows you to sell the underlying at $1.10(strike) within a period of 3 months,thereby protecting your profits for the next 3 months to a minimum of $0.10 (not including the premuim you paid to buy the put option)

In this way if the market shoots up to say, $2, you can still profit from the upswing. but you would not exercise your option therby wasting the premium you paid. (somewhat like insurance eh?)

 

4. sell/write a call option on the underlying which allows someone to buy from you the underlying at say $1.10. You collect the premium in this case and wait for expiry of the option. if the market shoots to $2, the option you sold will be exercised against you and you will have to sell your underlying at $1.10 thereby losing all the upside profit. Your gain is just the premium and the diff of you cost and the strike price.

 

 

I know your next question is when to buy and when to sell a put or a call and for how long and at what strike price......

Well that ultimately still depends on your view of the movement of the underlying.

 

"No free lunch" rule applies. Something must give for something else.

 

I feel tired after all this typing, gonna stop here.

[Throttle]

Ha! Ha!...

 

If u got at least $1 million in liquid assets, you're qualified to seek advice from Throttle.

 

 

 

 

Heh heh KISS, actually it's at least USD2mil investible, to be exact.

By the way, hows things, you still go down on the track?

Cheers

[GuiNNeSS]

my friend claimed his freind which include banker told him Singapore econ is collasping, ask him sell any share or funds that invest in Singapore company.?????

For me i am holding Prudential singapore Managed fund (my cpf investment). any pple can advise ?

[omnislash]

no wonder what?

 

No wonder you got flame?

[omnislash]

Ha! Ha!...

 

If u got at least $1 million in liquid assets, you're qualified to seek advice from Throttle.

 

Anything below that... or even $10K, you talk to me.

 

No thanks, I got my own source. I not rich, dun play big. Just invest a bit...

[omnislash]

So tmr see blood?

[fooz]

it has been bloodshed the past week..

i reckon it shld continue tmr...

[mi5trooper]

cool. do keep us inform. although i am interested to invest. but i have not step in yet. now, i am just watching fire across the river and waiting to cross the river to enter the next stage.

[GuiNNeSS]

seems like options trading is more than a walk in the park... wats recommanded for beginners with low capital? dont wish the hold and wait approach, time is an asset.

[eyz]

options trading doesn't let ya hold for long. it has expiry date. once expired, ya options can be worthless if it's out of the money, and the premium ya paid will be gone.

 

imo, it's allows ya to speculate the market with low capital, where ya can't afford to purchase the shares.

[mitosis]

Investers interested in various instruments or seek clarification can talk to me, im working under philips capital (poems). Will be able to help you with most of your investment needs and provide advice too.

pm or call/sms me at 90666554

[GuiNNeSS]

m desperate in need of a sound financial planning for a long term secure/slightly luxuary future outlook... wats the rate like?

[Throttle]

Investers interested in various instruments or seek clarification can talk to me, im working under philips capital (poems). Will be able to help you with most of your investment needs and provide advice too.

pm or call/sms me at 90666554

 

I dont think so dude, thanks

[GuiNNeSS]

anyone can explain the basic of stock to m, y i buy at poem but they refuse to accept...

[GuiNNeSS]

no one talking here?

[feeufee]

All no sim cheng to talk with the current market.....

[mi5trooper]

well, most of the people here are non-pros people like me. actually i am also 0% educated on this issue. I am like like a person who wish to study but have not enter the school yet. so i dare not anyhow say things here lor. somemore, usually things i ask may sound silly to the pros here mah. :-) i will continue to learn more knowledge. do keep this trend alive. thanks.