# Bedford, Dimitri, McIntyre, etc. Clowns?



## Hopeful (31 August 2006)

Hi, everybody  !

Recently I've been looking into options after failing to get anywhere trading stocks and futures (main reason is lack of focused time). 

I like the idea of writing options for income and so have been looking into that aspect. It appeals greatly because one can set up a write or a short and hopefully not have to focus on it every day until expiry. They say that 70% of all options expire worthless - so the odds are in your favor as a writer (all other things being equal).

In doing my preliminary research the above names pop up all the time (at least on this site), but experienced pro's such as Wayne have little positive to say about them or their methods.

Do you recommend reading material from those three people? What book/s do you recommend? Which options educators are worth their salt? I don't want to waste time and money reading material from people who are not going to inform you properly but rather lead you into other products such as DVDs and seminars. A decent book is probably worth more than a seminar in Fiji for several thousand bucks  .


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## Magdoran (31 August 2006)

Hopeful said:
			
		

> Hi, everybody  !
> 
> Recently I've been looking into options after failing to get anywhere trading stocks and futures (main reason is lack of focused time).
> 
> ...



Hello Hopeful,

Have a look through the various threads Wayne, Margaret and I have commented on.  You will find consistently the books suggested at the intermediate to advanced level are listed below.  For beginners, the consensus seems to be Guy Bower’s book “Options: A complete guide for investors and traders”. 

•	Sheldon Natenberg "Option Volatility and Pricing"
•	Lawrence McMilan “Options as a Strategic Investment”
•	Charles Cottle “Coulda Woulda Shoulda” 
•	Stuart Johnston "Trading Options To Win"

My opinions on Bedford are well known, the other’s I have never read so I can’t comment.

Beware of the concept that the majority of options expire worthless.  Many options are traded in complex ways, and many are entered and exited long before expiry, and this simplistic statistic does not take that into account, which is a critical flaw in this ignorant way of thinking.

Also, many options expiring worthless may be part of a complex position like a butterfly, or a credit spread, hence just looking at expiry levels tells you little about who made money out of these positions, or even why they were undertaken.  Some people buy puts for protection as an insurance policy, and sell calls to generate income while holding the puts for instance.

So, be very careful about believing that writing options is a risk free cash cow.  It isn’t.  It can be a great source of income if you know what you are doing, and assess the risk and reward effectively and are able to determine probability sufficiently to profit.  But this requires several layers of knowledge – options knowledge (Greeks and strategies), market analysis capabilities, psychological ability, and overall system/strategy.  

If you don’t do the due diligence, you can end up broke like one poor fellow a few years ago.  He was a public servant in Canberra about to retire, and had written a host of CBA puts naked.  Suddenly the market dropped hard, and he was exercised, and had to pay out a six figure settlement.  Not pretty!  Needless to say, he wasn't able to retire, and had to go on working...

Hope this helps, Hopeful, I’d hate to see you eaten by the market.


Regards


Magdoran


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## Realist (31 August 2006)

For a trading book I was particularly impressed with Richard Farleigh's "Taming the Lion".


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## swingstar (31 August 2006)

Dimitri, unlike the others (afaik), lets people see his trading record. A friend is a member of his diary, and he says he clears on average $50k a month just from writing puts. Of course it's not hard in a bull market, so would be interesting to know how he went recently or will go if the market continues down. He relies a lot on win rate not profit to risk ratio, which is scary if you ask me - a day like 9/11 would totally wipe out his exposure (which could be many months or years worth of profits), so unless you're as cashed up as he is or not diversified then you would face financial ruin. 

I don't know much about Jamie, but from other forums I haven't heard any negative reports about his seminars etc. I think he focuses on more than just stocks tho. 

Don't know anything about Bedford... 

I think these people thrive on people's laziness. You might get something out of them, but if you can put the effort into reading and self-study (which you'll probably end up having to do anyway) then books are the way to go, and they're a lot cheaper too.


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## Realist (31 August 2006)

After reading a little bit about Louise Bedford I am quite sure that she makes her money by showing other people how *NOT* to make money.

In other words, she can not earn enough as a trader, she recognises this fact, and knows to make money as a trader she needs to write books and train others.  People that can do, others that can't teach.

It is a pyramid scheme when you think about it.  The first person knows they can't make enough themselves, so they get people under them doing the exact same work and profit off them instead. 

I'd love to attend one of these things just for curiosity though, although I think they'd kick me out after the tenth time I ask "what about tax, what about brokerage, what about fees, what about a dip stopping you out of a winning trade?"


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## CanOz (31 August 2006)

Realist, your not a trader so don't cloud somebodies judgement with your anti technical opinions. Let the experienced traders on the forum reply with experienced advice. 

Also, has it ever occurred to you that some traders genuinely want to teach others their profession, so they turn to writing books or newsletters. Some people just love to be able to help other people learn and share something that they love to do. I doubt very much if Louise Bedford, or Nick Radge need to rely on their earnings from publishing, that’s crazy.

Sometimes you reply without consideration for others, especially new people to the forum.

Cheers,


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## NettAssets (31 August 2006)

Jamie has a Seminar on share and option trading in Perth 16th - 18th Sept
It is free for past members of 21CA. don't know the price for others.
I haven't seen the Itinery but I would assume Andrew Dimitry will be there along with CFD providers and brokers. will post the list when I get it if anyone is interested.

Hi Realist 
I think you make too big an issue out of Tax.
If you are paying tax you are making a profit - You cannot make a loss by paying tax if you are doing your bookwork properly. 

John


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## Realist (31 August 2006)

CanOz said:
			
		

> Realist, your not a trader so don't cloud somebodies judgement with your anti technical opinions. Let the experienced traders on the forum reply with experienced advice.
> 
> Also, has it ever occurred to you that some traders genuinely want to teach others their profession, so they turn to writing books or newsletters. Some people just love to be able to help other people learn and share something that they love to do. I doubt very much if Louise Bedford, or Nick Radge need to rely on their earnings from publishing, that’s crazy.
> 
> ...




Everyone else here seems to believe in charting.   Why not give a different point of view?

Or are you saying that charting is the right and only way and I am wrong?

Chartists themselves like Darryl Guppy admit 90% of newbie chartists lose money - I am doing them a service if anything!!

I also find it hard to believe Lousie Bedford makes a great living off trading, and runs courses and writes books merely to give back to the community.


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## Realist (31 August 2006)

NettAssets said:
			
		

> Hi Realist
> I think you make too big an issue out of Tax.
> If you are paying tax you are making a profit - You cannot make a loss by paying tax if you are doing your bookwork properly.
> 
> John




I do make a huge issue out of tax. Agreed.  And here's why....

Tax is the biggest problem a trader faces, infact it is the biggest problem an employee or an employer faces. It is the biggest problem a property investor faces. It is the biggest financial problem everyone who earns money faces!!!

Forget petrol prices, banana prices, or share prices. Someone who earns $100,000 a year pays half of that in TAXES.

50,000 a year!!!  GONE to the government!!!

Now before you say hang on the tax rate is such and such, add in GST on everything you buy!! Add in the taxes on alcohol, petrol, cigarettes, gambling, stamp duties, then add in capital gains taxes, rates, property taxes, stamp duties on cars and houses, parking meters, speeding tickets and other ways the government slyly takes money off you. They are all taxes in one form or another.

Infact it is maybe 60% of your income.

If you can avoid tax you are sooooo much better off than someone who doesn't.

The recent property boom was fueled by people negative gearing - it comes back to TAXES!!! They invested in property for tax reasons!!


If you buy and hold shares and let your investment compound you are not paying tax at all.

If you trade regularly you are paying 50% tax each year. You're up agaisnt it from the start.


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## CanOz (31 August 2006)

There no doubt in my mind that these people once they proved themselves as traders, would find it much easier to make a living off of training as opposed to trading. Surely it would be less stressful.


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## Realist (31 August 2006)

CanOz said:
			
		

> There no doubt in my mind that these people once they proved themselves as traders, would find it much easier to make a living off of training as opposed to trading. Surely it would be less stressful.




Is trading stressfull??    

Not really, if I could trade fulltime and make a mint I'd do it, I think it is quite fun.

Stressfull is turning up to a job you don't like everyday, spending 2 hours a day in traffic, working for 8 or 9 hours a day, 5 days a week, 48 weeks a year, 45 years of your life.


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## swingstar (31 August 2006)

Realist said:
			
		

> Chartists themselves like Darryl Guppy admit 90% of newbie chartists lose money - I am doing them a service if anything!!



Even though I have never seen any evidence behind that 90% claim, new businesses have nearly as high a failure rate. So with your logic, you would be doing a service by talking every prospective small business owner out of their plans. 

Trading isn't all about charting either. Dimitri uses fundamentals only. 



> If you can avoid tax you are sooooo much better off than someone who doesn't.



In regards to money / lump sum, you're probably right (although your only argument seems to be Buffet). However with regards to lifestyle, then not on your life. I have a great lifestyle. It's been trying at times, but I haven't looked back since leaving my job over a year ago. 

Regardless, there are many ways to minimize tax. Look at your friend Farleigh for instance. He gained citizenship in a non-tax paying country. 



> Stressfull is turning up to a job you don't like everyday, spending 2 hours a day in traffic, working for 8 or 9 hours a day, 5 days a week, 48 weeks a year, 45 years of your life.



Thanks for reminding me why I left.


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## CanOz (31 August 2006)

Realist said:
			
		

> Is trading stressfull??
> 
> Not really, if I could trade fulltime and make a mint I'd do it, I think it is quite fun.
> 
> Stressfull is turning up to a job you don't like everyday, spending 2 hours a day in traffic, working for 8 or 9 hours a day, 5 days a week, 48 weeks a year, 45 years of your life.




People feel stress differently. What if L.Bedford loves trading, and teaching. Now she can do both profitably and do this enourmous service to the community! What a life!


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## Realist (31 August 2006)

swingstar said:
			
		

> So with your logic, you would be doing a service by talking every prospective small business owner out of their plans.




YES, I would at least warn them to be carefull.



> It's been trying at times, but I haven't looked back since leaving my job over a year ago.




Wait till the bull run ends..... There seems to be alot of sharemarket experts these days, just like there were alot of property investors in Sydney 4 years ago...




> Regardless, there are many ways to minimize tax. Look at your friend Farleigh for instance. He gained citizenship in a non-tax paying country.




As I said he is a smart guy....  Smarter than your Guppy's and Bedford's that's for sure..

What other ways are there apart from leaving to go overseas?


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## swingstar (31 August 2006)

Realist said:
			
		

> Wait till the bull run ends..... There seems to be alot of sharemarket experts these days, just like there were alot of property investors in Sydney 4 years ago...




I can't wait for the bull market to end.


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## Realist (31 August 2006)

CanOz said:
			
		

> People feel stress differently. What if L.Bedford loves trading, and teaching. Now she can do both profitably and do this enourmous service to the community! What a life!





Yeah right, so she is giving her enournmous services back to the community by taking $3,000 of your poor average punters and teaching them how to buy highly speculative shares....


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## Realist (31 August 2006)

swingstar said:
			
		

> I can't wait for the bull market to end.




Be carefull what you wish for.

You may not make money by shorting either.

It may just roll along doing sweet f'all for quite a few years.

It wont just go Bull to Bear overnight...or will it?


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## NettAssets (31 August 2006)

Realist said:
			
		

> Not really, if I could trade fulltime and make a mint I'd do it, I think it is quite fun.



So you have actually sold a share now and completed one trade now have you?

It's alright thinking its fun until you realise your next pair of pants relies on it.
To be sure I don't find it stressful ..... but Fun?


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## Magdoran (31 August 2006)

Realist said:
			
		

> Someone who earns $100,000 a year pays half of that in TAXES.
> 
> 50,000 a year!!!  GONE to the government!!!
> 
> ...If you trade regularly you are paying 50% tax each year. You're up agaisnt it from the start.



WARNING!!!

I feel compelled to yet again address this potentially misleading statement which could be construed as giving financial advice. The caveats made in the text are not sufficient to ensure that readers are not mislead.

I recommend that individuals fully research their taxation situation.

The concept that as a trader you must pay 50% of your profits via GST is WRONG. (I’m concerned when I read these kinds of statements that readers can be potentially hurt financially by potentially misleading information being stated, and this particular comment which has been repeated on other threads really demonstrates the “colossal intellect” of the author).

There are alternative ways of dealing with income depending on a whole range of variables including how an individual’s finances are structured.

It is misleading to say that if you earn $100,000 you will have to pay the government 50% of this amount in taxes.  There are a whole raft of deductions and rulings that can be legitimately used which individuals should raise with their accountant and advisers.

While it is fun to see clowns at the circus, you don’t want them running your finances.


Yours in concern


Magdoran


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## Realist (31 August 2006)

NettAssets said:
			
		

> So you have actually sold a share now and completed one trade now have you?




Not this financial year.    

But I have bought shares as "trades" as opposed to investments though,  MRE, MTN, CQT, etc... 

As you know I hate selling!!


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## NettAssets (31 August 2006)

Realist said:
			
		

> Not this financial year.
> 
> But I have bought shares as "trades" as opposed to investments though, MRE, MTN, CQT, etc...
> 
> As you know I hate selling!!





Thats all very well but you still can't eat tomorrow

John


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## Realist (31 August 2006)

Magdoran said:
			
		

> It is misleading to say that if you earn $100,000 you will have to pay the government 50% of this amount in taxes.  There are a whole raft of deductions and rulings that can be legitimately used which individuals should raise with their accountant and advisers.




 

Please list some of these amazing "secret" deductions that the average employee can use..?

I'll then hit back by mentioning taxes on petrol, alcohol, state taxes, and GST will wipe out all your deductions - then what will you say?

I'll then discuss stamp duties, parking metres, speed camera's, airport levies, captial gains taxes, road taxes, tolls, taxes being passed on up the chain and growing making everything expensive - petrol affects food prices for instance - then GST is added on the already high price - you are double taxed.

You've got nothing Magdoran - I know about tax deductions, but I also know about hidden taxes you do not even think about.  

Once you do all the maths it is close to 50% anyway. some maybe lower, some higher.

For instance anyone who thinks a speeding ticket for driving 65km per hour in a 60km zone is not a tax but a safety issue is dreaming.


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## Realist (31 August 2006)

NettAssets said:
			
		

> Thats all very well but you still can't eat tomorrow
> 
> John




I work.

I'll be rich eventually by the power of compounding - patience is the key.


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## dubiousinfo (31 August 2006)

Magdoran said:
			
		

> WARNING!!!
> 
> I feel compelled to yet again address this potentially misleading statement which could be construed as giving financial advice. The caveats made in the text are not sufficient to ensure that readers are not mislead.
> 
> ...




 :iagree:


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## Realist (31 August 2006)

dubiousinfo said:
			
		

> :iagree:





Hence your name...


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## Sean K (31 August 2006)

What was this thread about? 

I was actually hoping to get an opinion of the topic.


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## swingstar (31 August 2006)

Realist said:
			
		

> Please list some of these amazing "secret" deductions that the average employee can use..?
> 
> I'll then hit back by mentioning taxes on petrol, alcohol, state taxes, and GST will wipe out all your deductions - then what will you say?
> 
> ...




What the hell do speed cameras have to do with trading vs. investing? LOL


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## Magdoran (31 August 2006)

Realist said:
			
		

> Please list some of these amazing "secret" deductions that the average employee can use..?
> 
> I'll then hit back by mentioning taxes on petrol, alcohol, state taxes, and GST qwill wipe out all your deductions - then what will you say?
> 
> ...



Realist,

I am not going to get into a silly argument with you, you can find somebody else to do that with.  

You fail to realise that a trader may be able to have their earnings treated as income and may be able to avoid having their profits treated under the GST provisions – something people should check with their accountant.  It is also possible to structure a company as the trading entity for example.  Again this is up to individuals to pursue.

You have not considered that your comments may well breech the Corporations ACT 2001, and that you are not a qualified Tax expert (neither am I – I don’t hold the requisite certification or license, hence I’m not going to make statements regarding Taxation matters in detail).

While I’m an ardent advocate of freedom of speech, I feel compelled to reluctantly notify the relevant moderator on this thread to take action since your comments potentially breech the Corporations ACT 2001 based on the fact that your comments could be construed as giving Taxation advice, and that the comments are factually incorrect.

I would be very careful what I said in light of this warning since there are wider authorities that may have jurisdiction.


You have been warned


Magdoran


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## Realist (31 August 2006)

Magdoran said:
			
		

> You fail to realise that a trader may be able to have their earnings treated as income and may be able to avoid having their profits treated under the GST provisions – something people should check with their accountant.  It is also possible to structure a company as the trading entity for example.  Again this is up to individuals to pursue.





I am fully aware of that.

You do need to be a fulltime trader almost buying and selling everyday and you need to prove this.

Is anyone here registered as a fulltime trader - that pays income tax instead of CGT?

Even still tax is a problem for fulltime traders.


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## Magdoran (31 August 2006)

Realist said:
			
		

> You do need to be a fulltime trader almost buying and selling everyday and you need to prove this.
> 
> Is anyone here registered as a fulltime trader - that pays income tax instead of CGT?




Yup, I am...  

Now, final word.  Stop misleading people!


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## dubiousinfo (31 August 2006)

Realist said:
			
		

> I am fully aware of that.
> 
> You do need to be a fulltime trader almost buying and selling everyday and you need to prove this.
> 
> ...





Yes
The company I use to trade is considered a trading entity and following coming out squeaky clean from a random audit not too long ago I have no concerns in this regard.


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## Realist (31 August 2006)

Magdoran said:
			
		

> Yup, I am...
> 
> Now, final word.  Stop misleading people!





You pay more tax than Warren Buffet does each year.    

It is you misleading people - tax is a problem, you just wont admit it, or maybe you're not smart enough to even realise it.

Buffett is rich, mainly cause he does not pay tax!


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## wayneL (31 August 2006)

Guys,

We have been through this a thousand times with Realist. I don't believe he is intellectually incapable of understanding the traders view. He seem sto be emotionally blocked on the topic however, and this is even more difficult to penetrate.

As Mag said though, it is important to speak out when wrong information is posted, for the benefit of other readers.

.... and yes, lets be very careful about the advise issue.


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## Realist (31 August 2006)

I'm not advising anyone.

But what exactly did I say that was wrong?

Do you guys believe tax is not an issue at all?    

It is a huuuuuge issue to me anyway.


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## wayneL (31 August 2006)

Realist said:
			
		

> I'm not advising anyone.
> 
> But what exactly did I say that was wrong?




I'm not saying you did anything wrong, I'm just saying there are some draconian laws in this country regarding advise, as Mag pointed out, and we need to be careful.




			
				Realist said:
			
		

> Do you guys believe tax is not an issue at all?
> 
> It is a huuuuuge issue to me anyway.




Tax is a big issue, but revenue is even bigger. A private trader as an independant business does have avenues for tax minimisation not available to employees however and one should obtain advise about this from a qualified professional in the field.


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## doctorj (31 August 2006)

I've reviewed Realist's post for issues with financial advice and feel the premise of his post was as follows.



> Someone who earns $100,000 a year pays half of that in TAXES.




Now while this isn't true in ALL cases, it is well within the relm of possibility.

Being that it's also non-specific and observational in nature its clearly not advice, but personal opinion and hasn't be represented as anything more.

There is a very fine line between opinion and advice and I want to echo Wayne's comment that it is important that we all ensure we stay on the safe side of the distinction.

Also, lets ensure everyone's posts remain within the spirit of the forum.  Veiled threats are very much unacceptable and can destroy the community.  There was a recent case where an australian motorsport forum (I don't have the link handy) degraded into flaming and threats and one member ended up acting on his threats and the other party ended up losing his job over the affair.  Lets keep it clean fellas.


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## NettAssets (31 August 2006)

Realist said:
			
		

> I am fully aware of that.
> 
> You do need to be a fulltime trader almost buying and selling everyday and you need to prove this.
> 
> ...




If anyone is considering trading either full or part time get advice on this sort of bull before you give up.

As far as my accountant is aware there is no "registration" as a trader.

Self assessment means you class yourself and tax yourself as you see yourself - BUT YOU HAD BETTER BE RIGHT. - Dont listen to me either but get advice from someone qualified on this.

Tax is not a *problem* -  It is a *fact* for anyone eaning income in Australia and taking yourself out of (or supplementing )the "wage earning" bracket gives access to a range of tax minimisation possibilities that only an expert in the field can advise on.
http://www.ato.gov.au/corporate/content.asp?doc=/content/76071.htm

John


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## GreatPig (31 August 2006)

I also have a trading business, operated in a company structure. This pays tax at the corporate rate of 30% on all profits (which includes gains on sales). It's also registered for GST, so can claim back the GST paid on brokerage.

The company is owned by a family trust, which will allow future dividends to be distributed to low-income family members as we desire. Depending on the payout rate, the final tax bill could well be less than 30%.

This is just a statement of my own situation, and should not be considered general advice.

Consumption taxes are irrelevant to the trader or investor, except for a bit of GST paid here and there. No matter how you earn your money, you still have to pay them.

Cheers,
GP


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## MichaelD (31 August 2006)

Hopeful said:
			
		

> Recently I've been looking into options after failing to get anywhere trading stocks and futures.



Not wanting to rain on anyone's parade, but isn't the market trying to tell you something pretty important here?


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## Realist (31 August 2006)

GreatPig said:
			
		

> I also have a trading business, operated in a company structure. This pays tax at the corporate rate of 30% on all profits (which includes gains on sales). It's also registered for GST, so can claim back the GST paid on brokerage.
> 
> The company is owned by a family trust, which will allow future dividends to be distributed to low-income family members as we desire. Depending on the payout rate, the final tax bill could well be less than 30%.
> 
> ...




Obviously what you are doing is smart.

Tax is always a consideration and needs to be reduced if at all possible.


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## Hopeful (1 September 2006)

MichaelD said:
			
		

> Not wanting to rain on anyone's parade, but isn't the market trying to tell you something pretty important here?




I know, but I refuse to ever give up - the market OWES me and I WILL make it pay.

Thanks Madgodan for the book suggestions   

Sheldon Natenberg "Option Volatility and Pricing"
• Lawrence McMilan “Options as a Strategic Investment”
• Charles Cottle “Coulda Woulda Shoulda”
• Stuart Johnston "Trading Options To Win"

I have some reading to do...

BTW I'm happy to say that if tax were ever an issue (if I were actually profitable) it wouldn't bother me since I am in another country where income tax is very low!


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## swingstar (1 September 2006)

Realist said:
			
		

> Be carefull what you wish for.
> 
> You may not make money by shorting either.
> 
> It may just roll along doing sweet f'all for quite a few years.



As long as there's some volatility. My best results on paper have been between 2001-2003, which were pretty 'meh' years. 58% of my live trades have been short.


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## swingstar (1 September 2006)

Hopeful said:
			
		

> I know, but I refuse to ever give up - the market OWES me and I WILL make it pay.




I read a quote the other day (can't remember where, may have been these forums)... went something like, if people doubt you and you refuse to give up, then you are already half way there. 

Whilst on quotes, I also just read this which reminded me of Realist:

_Those who say it cannot be done ought not to interrupt those who are doing it._

Anyway, this time though, make sure you learn from your mistakes. What happened that caused you to lose the last few times? A different instrument will unlikely improve your results.


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## MichaelD (1 September 2006)

swingstar said:
			
		

> A different instrument will unlikely improve your results.



A more direct version of what I was getting at.

Hopeful, the market WILL reveal its workings to you in all instruments, but if unleverage share trading is not working, leveraged instruments will only increase the pain of learning.


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## happytrader (1 September 2006)

Hi Hopeful

Bedford, Dimitri, McIntyre, etc all teach you their methods. However, its the mindset or the development of the 'character of a trader' that escapes the attention of most people. 

Universities, Tafe, apprenticeships, the military, families, class and cultures etc all reproduce according to their kind by method and full emersion in the role which they do very well. Also most members of any group 'know' their own kind and if something about them or their method is 'not quite right'
However, exceptions are often made for those who look and act like they are willing and able to 'fit in' 

For a would be trader this means if you take one of these courses, show respect for your teacher, their method and the role and character of a trader. Otherwise you really will be wasting your time and money as well as eroding your confidence.

Cheers
Happytrader


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## GreatPig (1 September 2006)

Hopeful said:
			
		

> Sheldon Natenberg "Option Volatility and Pricing"



I've just finished reading this and found it very good. It's not hard to read, but has all the maths in the back if you're really interested.

I wish the US would get up-to-date though and use decimal prices rather than those damned fractions. It's a wonder they don't still use shillings and guineas as well! 

GP


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## Magdoran (1 September 2006)

Hopeful said:
			
		

> I know, but I refuse to ever give up - the market OWES me and I WILL make it pay.
> 
> Thanks Madgodan for the book suggestions
> 
> ...



Connichiwa Hopeful,


Good luck with the readings.  By the way, if you’re totally new to options, you may find it easier to start with Bower and work through the others – Natenberg  is really good on the “Greeks”, option models, and the statistical background underpinning option theory, while McMilan is strong on Strategies as is Cottle (which is very good for morphing approaches).

Just a couple of points to note.  Firstly, be very very careful using options in the real market, these are complex leveraged instruments, and while the profits are magnified, so are the losses.  Just keep this in mind, won’t you?

Secondly, MichaelD makes a very good point about trading.  If you can’t trade effectively with shares, it’s significantly harder using leveraged instruments.  You really need to know what you are doing on several levels.  If you’re using straight options for directional trades you have to get the “trifecta” of direction, magnitude, and time right sufficiently to make profits.  This is actually much harder than it looks.  Throw in volatility, theta decay and delta, let alone the other “Greeks”, and you have quite a challenge to contend with.

Your comment “I know, but I refuse to ever give up - the market OWES me and I WILL make it pay” sends off alarm bells.  Your comment certainly flags the possibility that you may have some emotional damage from your past trading experience. This is not a good foundation to commence a career in options trading from.  In fact, emotions such as this are the enemy of the trader.  

Patience is a prerequisite.  You need to be able to be almost “Zen” about the whole thing, be “in the moment”, and flexible in your thinking – pretty much dispassionate.  I strongly suggest you consider reading Mark Douglas’ books in addition to the options texts, especially “Trading in the Zone”, this will hopefully help you not to impose your emotional view on the market, and help you to just “see” the market. 

So, my standard comment for new options traders is firstly study all you can, try to find veteran options traders to learn from, paper trade (honestly, no cheating) to test your theories and strategies, and then graduate slowly with very small positions (suggest single contracts).  

This usually requires around 12 months to get a sufficient grounding before starting to trade real capital.  Of course this varies, a full timer may do it in 6 under months, but most people need to learn not only the theory, but the practice (how to deal with market makers, how to understand volatility in reality for example).

Options trading really needs to be allied with good analysis (usually technical, but good long term players can profit very well from sound fundamental analysis), as well as a sound grasp of psychological discipline, a solid grounding in strategy approaches, and a robust system.

Core message – do the due diligence in all areas, learn as much as you can, and do not be under any false impression that this is easy.  It isn’t.  It is probably one of the hardest things you will do in your life.

 Good luck!


Regards


Magdoran

P.S. Just wondering, are you an Australian expat, or a Japanese local?


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## stink (1 September 2006)

Wow, that was boring!!

Now has anyone got some opinions off Louise Bedford? I just bought one of her books which i am finding very informative so far.

Cheers Stink


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## Magdoran (1 September 2006)

stink said:
			
		

> Wow, that was boring!!
> 
> Now has anyone got some opinions off Louise Bedford? I just bought one of her books which i am finding very informative so far.
> 
> Cheers Stink




Spoken like the true expert that you are...  thanks for your learned contribution.


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## stink (1 September 2006)

Magdoran said:
			
		

> Spoken like the true expert that you are...  thanks for your learned contribution.




Are you seriously having a go?  

Mate if you go back to what the original poster was asking.??

No, I am not any type of expert on trading or taxation for that matter which is why i didnt contribute to what i see as being your pointless attempt to change someones opinions.

Just wanted an opinion on the author nothing more, so climb back in mate and pull the lid shut ok.

Stink


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## ducati916 (1 September 2006)

*Stink* 



> Now has anyone got some opinions off Louise Bedford? I just bought one of her books which i am finding very informative so far.




A scrummy looking peanut.

jog on
d998


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## stink (1 September 2006)

ducati916 said:
			
		

> *Stink*
> 
> 
> 
> ...




OK

Thanks Duc


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## Magdoran (1 September 2006)

stink said:
			
		

> Are you seriously having a go?
> 
> Mate if you go back to what the original poster was asking.??
> 
> ...



Stink,


While I might seem pedantic on some issues like investment, taxation, options, etc, it is with good intentions for all the readers that I contribute.  Now Stink while I don’t usually get involved in petty exchanges, I’ll make a one time exception for you...

What kind of response do you expect from someone when you traduce their comment by stating “Wow, that was boring!!”.  If you insult someone, are you really surprised that they might take exception to it?

How do you think you would feel after replying on topic (read the second post in this thread), and taking the time to respond to the original posters comment in context when someone like you breezes in making a derogatory comment like you?

You then add insult to injury criticising my reluctant clarification of a misleading statement about taxation issues.  Granted this was off topic, but I was not the person who sidetracked the comments – I responded to what I see as a serious topic where investors/traders could have been mislead which could have had serious negative financial implications.  It seems you do not share my concern for others well being, do you? 

I consider it a civic duty to ensure people are not misled in the market, and make no apology for it.

Stink, if you “Just wanted an opinion on the author nothing more” then why make the derogatory opening comment about my post? How dare you tell me to “climb back in mate and pull the lid shut” when you are the root cause of this little “tete-a-tete”.  It is people like you that are a drag on sites like this.

You can either do the honourable thing and recognise that you overstepped the mark, or you can continue to be belligerent.  Your choice.  Your response will be a measure of your mettle.


Magdoran


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## Magdoran (1 September 2006)

ducati916 said:
			
		

> *Stink*
> 
> 
> 
> ...




Hahaha Ducati,


You made my day!  I concur.


Mag


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## stink (1 September 2006)

Magdoran said:
			
		

> Stink,
> 
> 
> While I might seem pedantic on some issues like investment, taxation, options, etc, it is with good intentions for all the readers that I contribute.  Now Stink while I don’t usually get involved in petty exchanges, I’ll make a one time exception for you...
> ...





*Lets just say then, if your that upset. You stay out of my posts, unless you want to give me taxation advice and i wont reply to yours at all for fear of offending you. OK!

Again sorry, i hope your not crying.

Now i will do the honourable thing and remove myself from any further "Tete-a-tete" with you.

Shees!!!*


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## Magdoran (1 September 2006)

Thank-you Stink,


Well I’m glad to see you didn’t adopt a belligerent path and responded with a degree of conciliation which is to be commended, so I accept your apology (it is the spirit which counts over the qualifications).

Thank-you for applauding my stance too, much appreciated, I’m glad to see you have a broader perspective. 


Regards


Magdoran


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## Milk Man (1 September 2006)

Good to see you folks kissed and made up.

Yes, tax is extremly boring, yet its the only certainty besides death (confucious say).


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## Julia (1 September 2006)

stink said:
			
		

> Wow, that was boring!!
> 
> 
> 
> Cheers Stink




Wow, that was rude!!

Julia


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## stink (1 September 2006)

Julia said:
			
		

> Wow, that was rude!!
> 
> Julia




If you read the conversation that is just above your eyes, you would see that my intention was not to be rude. I have explained myself and Magdoran has accepted that so thats the end of it.

Are you seeking some attention? Whats your point to saying that  

Stink


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## MichaelD (2 September 2006)

Magdoran said:
			
		

> Your comment “I know, but I refuse to ever give up - the market OWES me and I WILL make it pay” sends off alarm bells.



A very good point. On the one hand, much kudos for having perserverence. If you keep doing the right thing in the market, eventually it pays off. Gentle brickbats per Magdoran's comments - the market owes nothing to anybody. The market is ALWAYS right.


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## ducati916 (2 September 2006)

> The market is ALWAYS right.




Only if you buy into EMT.
If you adhere to a Technical analysis philosophy & methodology, this is undoubtably true, as Technical analysis is the pure application of EMT.

However, other methodologies reject the premise of EMT, and instead postulate that markets are inefficient, and therefore incorrect.

jog on
d998


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## Magdoran (2 September 2006)

ducati916 said:
			
		

> Only if you buy into EMT.
> If you adhere to a Technical analysis philosophy & methodology, this is undoubtably true, as Technical analysis is the pure application of EMT.
> 
> However, other methodologies reject the premise of EMT, and instead postulate that markets are inefficient, and therefore incorrect.
> ...




Indeed, George Soros' famous comment is that the market is always WRONG!


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## GreatPig (2 September 2006)

Magdoran said:
			
		

> Indeed, George Soros' famous comment is that the market is always WRONG!



Thank God for that. I thought it was me...

GP


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## moXJO (3 September 2006)

Dimitri method is just put spreads.McIntyre (option section)is covered calls and dimitri method.Bedford pretty much covers the basics.

Nothing really ground breaking or new.


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## Hopeful (4 September 2006)

moXJO said:
			
		

> Dimitri method is just put spreads.McIntyre (option section)is covered calls and dimitri method.Bedford pretty much covers the basics.
> 
> Nothing really ground breaking or new.




May not be ground breaking or new but they are charging $97 USD for an ebook that supposedly tells you what their strategy is. But I have a feeling that having the ebook will not suffice - you'll need to join the forum and use broker xyz and go to Fiji   ... I'd rather buy 5 books on options trading, off ebay and do it the "hard way", and that way I get to learn much more.

On the promotional websites and free ebooks they say that most clients are generating most of their income from "selling insurance". I wonder what the contingency plan is for when a massive dive happens. Perhaps they LEAP, or maybe do verticle spreads, dunno.

The more I study options though the more I'm warming up to them. They are so versitile and can be used to take advantage of any mkt/stock view or bias.

Back to my "Options strategies" ebook...


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## wayneL (4 September 2006)

Hopeful said:
			
		

> May not be ground breaking or new but they are charging $97 USD for an ebook that supposedly tells you what their strategy is. But I have a feeling that having the ebook will not suffice - you'll need to join the forum and use broker xyz and go to Fiji   ... I'd rather buy 5 books on options trading, off ebay and do it the "hard way", and that way I get to learn much more.
> 
> On the promotional websites and free ebooks they say that most clients are generating most of their income from "selling insurance". I wonder what the contingency plan is for when a massive dive happens. Perhaps they LEAP, or maybe do verticle spreads, dunno.
> 
> ...




Wise


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## wayneL (4 September 2006)

Hopeful said:
			
		

> or maybe do verticle spreads,




Thats all the "Dimitri Strategy" is an OTM bull put vertical.

There, just saved you $97


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## Hopeful (4 September 2006)

wayneL said:
			
		

> Thats all the "Dimitri Strategy" is an OTM bull put vertical.
> 
> There, just saved you $97




Great! I owe you a beer or 97  . Budweiser OK with you?

Or how about this "hopeful" strategy: Sell nearby puts and go long a very OTM put with a longer expiry date (LEAP?), then keep writing puts every month until the very OTM put expires or heaven forbid gets exercised? I'm not up to par with the terminology yet, but there prolly is a word for the "hopeful strategy" other than "hopeful strategy" Let me guess, hmmm, "short put with long put LEAP"? I know it's not verticle 'cos the expiry is different...


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## NettAssets (4 September 2006)

How about a put Calendar if the stikes are the same 
or a put diagonal if they are not.
John


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## wayneL (4 September 2006)

Hopeful said:
			
		

> Great! I owe you a beer or 97  . Budweiser OK with you?
> 
> Or how about this "hopeful" strategy: Sell nearby puts and go long a very OTM put with a longer expiry date (LEAP?), then keep writing puts every month until the very OTM put expires or heaven forbid gets exercised? I'm not up to par with the terminology yet, but there prolly is a word for the "hopeful strategy" other than "hopeful strategy" Let me guess, hmmm, "short put with long put LEAP"? I know it's not verticle 'cos the expiry is different...




You can do that. It's called a diagonal spread and has advantages and disadvantages over the the vertical. You can do it with calls too. ( which I suggest would be a better idea)

There will always be a tradeoff with any strategy. Remember, options merely transfer risk someplace else. Be sure to know where that risk is.
 

Cheers


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