# Watch out for these guys!



## lukeaye (22 December 2009)

Hi there everyone,

Thought i would post this is beginners because they are the most likely to get caught by people like this!

Today i had a phone call from a person at (unnamed) financial services. We will call him Steven. This fellow used to work for a friend of mine who owns an advisory service. Due to several reasons, one of which involving his long criminal record, he was dismissed. 

Steven was trying to get me to go over to his new company. He used lines such as, "Conservative strategies, which look for consistent  returns on a monthly basis".

So i ask, Steve give me an example, what can you offer me? To which he replied, "For example i was will sell a put on BSL". 

So let me get this straight you are naked selling? 

So i asked Steve, what if you had sold puts on karoon gas? The stock gaps $2.00, now im ****ed arent i Steve? 

NOW GET THIS, THIS IS STEVES RESPONSE.

I love this as you can probably tell.

"I would not have bought Karoon."

HAHAHAHAHAHA. Yeah of course you wouldn't now steve.

"yeah well my analysis would have told me not to do it, and even if i did make a mistake i would just pull out"

Yes but steve, you can't pull out between the close and the open. You just cost me my hole account balance plus more!

So i asked Steve what size accounts do you look after, he said a minimum of $50,000. Ok well i only have a $15,000 account doesnt look like you can help me.

But wait Steve had another genius idea for me.

"Luke thats ok for somebody like you we could organise a margain loan, that is what i would do personally."

Ok Steve so what happens if the market crashes like it id 2 years ago?

"Well luke you would still have lost money anyway"

HAHAHAHAHA.

Steve i will not be requiring your services.

Its astounding that people like this are allowed to advise. Its a joke. They don't lose any of their money just everyone elses! They are honestly in my eyes, criminals.

So be warned do not be suckered in to there promises of riches.

Has anyone else had similar experiences?


----------



## mazzatelli (22 December 2009)

Do you feel like leaving yourself open to libel charges?


----------



## lukeaye (22 December 2009)

There i will change it then.

Well my information was collected illegally and there is a law suite against them as we speak anyway.But probably a good point didn't think that through


----------



## satanoperca (22 December 2009)

While a courageous thing you have tried to do Lukeaye for informing people just remember:

"A fool is easily departed of their money"

Do Your Own Research and trust no one.

These systems/scams will always be present just like drugs, violence and stupidity.

I was informed today that an old neighbors invested their whole super into Centro. WTF. They lost everything at age 70 and yes they were advised by a financial adviser.

Someone should have told them if they would have listened that a 180 EMA could have  significantly reduced their pain/loss.

Cheers


----------



## Krusty the Klown (22 December 2009)

Its only slander or libel if its not true.....

If its the truth you can say anything you want.

The risk is you just may have to pay a lawyer to defend you in court and hope the judge awards costs to you.

In this case I doubt an AFSL holder would sue you for damages, it would be bad press for them.


----------



## nunthewiser (22 December 2009)

Ahha ........BUT he has to prove its true.... unless he recorded the conversation it is pure slander unless proven otherwise.


----------



## lukeaye (22 December 2009)

Well if anyone would like to know who it is, feel free to pm me, and i will let you know the name of the person and the company he works for.

I dont need a law suit, but i think they are tied up with a law suite with my friend enough at the moment.

The other thing is, he got my information by taking the client register from the other company by breaking into the building, which obviosuly is highly illegal.


----------



## glendaw101 (22 December 2009)

lukeaye said:


> Well if anyone would like to know who it is, feel free to pm me, and i will let you know the name of the person and the company he works for




Lukeaye I don't think you have too much too worry about with a lawsuit.
The "Financial Advisors" are too busy reading the complaints against them.
A great percentage of the posters on this forum would like to serve the same lawsuit to the many so called "financial advisors" who have ruined their lives.

Oh that's right! we are supposed to read the fine print that we paid the "financial advisor" to read.

By the way don't bother complaining to the Financial Ombudsman as they will fob you off. They also are as useless and toothless as ASIC.


----------



## satanoperca (22 December 2009)

It is as simple as buyer beware.


----------



## brty (23 December 2009)

Hi all,

Lukeye, I read your original post and reported it to Joe. The reason being that no matter how bad you feel about a post, unless you have definitive proof against it, you are stuffed., don't persue it, there is no point. Yet many of us know your frustration.

good luck

brty


----------



## akkopower (23 December 2009)

the big fish need to feed somewhere


----------



## Wysiwyg (23 December 2009)

akkopower said:


> the big fish need to feed somewhere



An experience I had with a forex pair was a 100 pip jump on no changed interest rate. The rates announcement was to remain unchanged as expected but nevertheless, an instant 100 pip jump. I went to forex factory forum and there were traders asking the same question. Why a 100 pip jump on no news.  I never found out which mob forced the rise but it caught a lot by surprise.


----------



## lukeaye (23 December 2009)

brty said:


> Hi all,
> 
> Lukeye, I read your original post and reported it to Joe. The reason being that no matter how bad you feel about a post, unless you have definitive proof against it, you are stuffed., don't persue it, there is no point. Yet many of us know your frustration.
> 
> ...




Your a real hero brty. I do have proof. As i stated there is a law suite against him as we speak.

He hasn't taken any of my money but i am simply expressing my concern over the amount of idiots out they legaly able to handle innocent hard working peoples money.

I feel it is up to the more experienced traders and wiser ethical heads to steer the greener heads away from people like this.

Thank you for you support though brty (sarcasm)


----------



## Timmy (23 December 2009)

Good thread Luke.  Lots of sharks in the water.


----------



## basilio (23 December 2009)

I think Lukeaye's action are constructive. There are many sharks out there. I'm surprised his particular  species was so open and so stupid.

The issue of libel is always interesting.  Frankly it would pretty unlikely that a relatively small time  shark would take the trouble or have the capacity to sue for libel.

BUT one thing that has troubled me over the years has been the investment practices. cost structures and sheer greed of the main players in the investment business. The facts have always been clear - the big insurance companies, big investment banks and current financial advice systems are geared for their benefit not yours. (And the sun does rise every day....)  Trouble has been that it only took the  last GFC to highlight just how much risk we take following their advice and how easily we can lose our savings.

For example it would have been interesting to have highlighted Westpoints investment strategies before they fell over. Not to mention Timbercorps. But these companies did not fail by accident..


----------



## gooner (23 December 2009)

nunthewiser said:


> Ahha ........BUT he has to prove its true.... unless he recorded the conversation it is pure slander unless proven otherwise.




Not my understanding

Criminal law - requires proof beyond reasonable doubt

Civil law including libel - balance of probabilities. So judge or jury (?) decides which story is most likely to be true


----------



## lukeaye (23 December 2009)

So how can we address this problem?

How can we help others so that they don't go through the pain that others have felt?

(1) Now im not the most experienced trader out there, but i can trade successfully and i would like to think i can tell the difference between what will work and what won't. If anyone is looking at signing up to a brokerage service i will be happy to look at it for you and give you my opinion.

I would suggest that if there are any other wise heads who happy to do so, please say so.

(2) If you don't wish to ask for help, for whatever reason, make sure you please check the past performances! Ask for a trial membership, so you can see how they perform. If they are reputible and confident in their product, then they really should have no problem?

Many advisory services will post for free their winning trades, and not show you their losers. Make sure you get a look at their strategies, what they risk, and what sort of performance they are currently and historically returning.

I could post all my winning trades up, with statements and you would think i was a genius, but you really need to see what its going to cost you to lose!


----------



## Krusty the Klown (23 December 2009)

Luke, if this guy rang you unsolicited, then it also contravenes anti-hawking legislation.

An AFSL holder cannot approach or cold call any individual selling an investment product out of the blue.


----------



## prawn_86 (23 December 2009)

Krusty the Klown said:


> Luke, if this guy rang you unsolicited, then it also contravenes anti-hawking legislation.
> 
> An AFSL holder cannot approach or cold call any individual selling an investment product out of the blue.




The anti-hawking rule only applies on Sundays or public holidays as far as im aware. You are allowed to call people and talk about your products and services, but if your offering specific advice you need to provide a FSG and PDS as soon as practicable.


----------



## Krusty the Klown (23 December 2009)

nunthewiser said:


> Ahha ........BUT he has to prove its true.... unless he recorded the conversation it is pure slander unless proven otherwise.




Yes, that nasty proof thing does get in the way alot doesn't it......


----------



## Krusty the Klown (23 December 2009)

prawn_86 said:


> The anti-hawking rule only applies on Sundays or public holidays as far as im aware. You are allowed to call people and talk about your products and services, but if your offering specific advice you need to provide a FSG and PDS as soon as practicable.




They may have changed it since I last worked for a license holder (major bank), but when I last did (2006), they were not allowed to cold call. The customer had to make the enquiry first.


----------



## prawn_86 (23 December 2009)

Krusty the Klown said:


> They may have changed it since I last worked for a license holder (major bank), but when I last did (2006), they were not allowed to cold call. The customer had to make the enquiry first.




I will triple check it when i get home, but at the mo im studying for AFMA accreditation to work for an AFSL and am 99% confident that AFSLs can cold call, but not on Sundays or public holidays.

I know of lots of insurance co's etc that do it...


----------



## bilo83 (23 December 2009)

The cold calling is dodgy but nothing wrong with the strategy. Naked short put = covered call and plenty of mum and dad investors are doing that one. Just have to make sure you have the cash to buy the stock if exercised and only write against stocks you dont mind owning. What sort of fees do they try to charge? 

Good practice would be knowing the client's situation before suggesting specific trades.


----------



## cutz (23 December 2009)

bilo83 said:


> The cold calling is dodgy but nothing wrong with the strategy. Naked short put = covered call and plenty of mum and dad investors are doing that one. Just have to make sure you have the cash to buy the stock if exercised and only write against stocks you dont mind owning. What sort of fees do they try to charge?
> 
> Good practice would be knowing the client's situation before suggesting specific trades.




My suggestion would be that mum and dad investors stay away from options, especially naked puts and covered calls.

When holding short naked puts that warm feeling of " I wouldn't mind owning that stock" quickly disappears when the market is getting trashed, especially if volatility wasn't considered in the first place.


----------



## prawn_86 (23 December 2009)

bilo83 said:


> The cold calling is dodgy but nothing wrong with the strategy. Naked short put = covered call and *plenty of mum and dad investors are doing that one.*




lol, find me one mum or dad investor that uses options. Most people on this site dont even use options and the majority here are much more finacially savvy than the 'average' mum or dad investor


----------



## bilo83 (23 December 2009)

I got that warm fuzzy feeling around March this year Chances of blowing up with naked puts is a lot higher than cc’s because of margins and brokers usually letting you gear higher with puts.


----------



## nunthewiser (23 December 2009)

We got a live one.................


----------



## Krusty the Klown (23 December 2009)

prawn_86 said:


> I will triple check it when i get home, but at the mo im studying for AFMA accreditation to work for an AFSL and am 99% confident that AFSLs can cold call, but not on Sundays or public holidays.
> 
> I know of lots of insurance co's etc that do it...




I think the Sundays and public holidays ban applies to all businesses regardless of what is being sold. 

I should have been clearer but I am referring to products covered by the FSRA such as personal advice and deposit products.

Some licensees might cold call if they find a way around the law. The strategy when I was there was to call about another matter, say a survey or customer satisfaction, and then try and lure the person in to making an appointment or send out some product information, then the sales process began.


----------



## Timmy (23 December 2009)

bilo83 said:


> Good practice would be knowing the client's situation before suggesting specific trades.




Suggesting specific trades to a client would require the appropriate level of AFSL licence.  The floggers of dodgy options 'systems' will sometimes (sometimes not) have a licence (a rented one BTW, not their own) permitting them to offer only 'general' advice, not specific trades.


----------



## Timmy (23 December 2009)

cutz said:


> My suggestion would be that mum and dad investors stay away from options, especially naked puts and covered calls.
> 
> When holding short naked puts that warm feeling of " I wouldn't mind owning that stock" quickly disappears when the market is getting trashed, especially if volatility wasn't considered in the first place.




Agree.  

If you want to sell naked puts it is best to not mind getting the cucumber rumba ((c) TH) and having your account wiped out ... and some.  For the options experienced only.


----------



## bilo83 (23 December 2009)

Not a strategy for those with poor risk management practices Nearly got wiped out in March. Got exercised and didn't have enough collateral to cover margins. Its been good the last 8 months obviously, because implied vol has been high and market going up. I wouldn't recommend anyone with less than 2 years options trading experience and steely discipline touch naked puts.


----------



## lukeaye (23 December 2009)

bilo83 said:


> The cold calling is dodgy but nothing wrong with the strategy. Naked short put = covered call and plenty of mum and dad investors are doing that one. Just have to make sure you have the cash to buy the stock if exercised and only write against stocks you dont mind owning. What sort of fees do they try to charge?
> 
> Good practice would be knowing the client's situation before suggesting specific trades.




I cant understand this thought process, im sorry seems completely illogical.

You wouldnt mind owning a stock that is crashing? Is this because YOU THINK it is good value? Or because you like losing money?

My example. Citigroup.

Selling 55 Put 90 days

Stock drops to $35 in a matter of weeks. BUT THATS OK ITS GREAT VALUE.

You think, thats ok it will go back up, i will make up the tens of thousands i just lost.

Citigroup goes down to 80 cents.

Hey but at least you got value right?

Im sorry but 2 years experience does not tell you when a stock is going to tank. If ive learnt anything its that you will never know what the market is goind to do next. If you have 2 years experience you should know better then to be selling naked options.

THAT is a poor risk management strategy


----------



## nomore4s (23 December 2009)

bilo83 said:


> Not a strategy for those with poor risk management practices Nearly got wiped out in March. Got exercised and didn't have enough collateral to cover margins. Its been good the last 8 months obviously, because implied vol has been high and market going up. I wouldn't recommend anyone with less than 2 years options trading experience and steely discipline touch naked puts.




lol are you kidding me?

Nearly got wiped out in March because "Got exercised and didn't have enough collateral to cover margins" and you think you don't have poor risk management practices?

You can keep that sort of trading thanks.


----------



## lukeaye (23 December 2009)

nomore4s said:


> lol are you kidding me?
> 
> Nearly got wiped out in March because "Got exercised and didn't have enough collateral to cover margins" and you think you don't have poor risk management practices?
> 
> You can keep that sort of trading thanks.




I agree

I wouldnt be suprised if this is the guy i was talking about? You have only posted on this thread?


----------



## bilo83 (23 December 2009)

"and you think you don't have poor risk management practices?"

I was being sarcastic. 

"My example. Citigroup.

Selling 55 Put 90 days

Stock drops to $35 in a matter of weeks. BUT THATS OK ITS GREAT VALUE.

You think, thats ok it will go back up, i will make up the tens of thousands i just lost.

Citigroup goes down to 80 cents.

Hey but at least you got value right?

Im sorry but 2 years experience does not tell you when a stock is going to tank. If ive learnt anything its that you will never know what the market is goind to do next. If you have 2 years experience you should know better then to be selling naked options.

THAT is a poor risk management strategy"

Agree, you wouldn't do it on a stock that's crashing. It's a flat strategy, so you'd pick a stock you think will not fall below a certain level, but not rise too much otherwise you're better off just going long stock. e.g. you think one of the banks is good value if it falls x%, and has good technical support around that area, but you don't expect it to rise dramatically either. Not for everyone timing important.


----------



## cutz (23 December 2009)

bilo83 said:


> Agree, you wouldn't do it on a stock that's crashing. It's a flat strategy, so you'd pick a stock you think will not fall below a certain level, but not rise too much otherwise you're better off just going long stock. e.g. you think one of the banks is good value if it falls x%, and has good technical support around that area, but you don't expect it to rise dramatically either. Not for everyone timing important.




Dunno about other option traders but now I don't use technically analysis to trade options and certainly don't assume that an area of support will hold.

If you choose to go down that path to set your short strikes on your naked puts you may find that eventually you may have to hand your **** over to the markets on a platter.


----------



## nunthewiser (23 December 2009)

:jerry:alcohol::kiffer:

Wot more can i say .............


----------



## Timmy (23 December 2009)

nunthewiser said:


> :jerry:alcohol::kiffer:
> 
> Wot more can i say .............




You tipped it!


----------



## nunthewiser (23 December 2009)

Timmy said:


> You tipped it!





And its running like the wind


----------



## lukeaye (23 December 2009)

bilo83 said:


> Agree, you wouldn't do it on a stock that's crashing. It's a flat strategy, so you'd pick a stock you think will not fall below a certain level, but not rise too much otherwise you're better off just going long stock. e.g. you think one of the banks is good value if it falls x%, and has good technical support around that area, but you don't expect it to rise dramatically either. Not for everyone timing important.




Bilo,

This is the point. HOW do you 100% know that support will hold? 

Take Karoon Gas weeks ago, gaps $2? Has good support, been trending well, right sector. Your not going to know.

A little knowledge in this business is a dangerous thing. Just because you have your RG146 does not make you a market guru. My roomate has it, and she is an idiot, no disrespect to her.


----------



## bilo83 (23 December 2009)

lukeaye said:


> I agree
> 
> I wouldnt be suprised if this is the guy i was talking about? You have only posted on this thread?




lol! Why the hating? I'm not the guy calling you during dinner to sell you insulation either. I was just trying to pass on my experience with the strategy. My lesson was don't overextend yourself, short puts = leveraged covered calls.


----------



## lukeaye (23 December 2009)

bilo83 said:


> lol! Why the hating? I'm not the guy calling you during dinner to sell you insulation either. I was just trying to pass on my experience with the strategy. My lesson was don't overextend yourself, short puts = leveraged covered calls.




Well dont Give people positive re-enforcment on a product which gives you accelerated loss, which you yourself have experienced!

ITS A BAD STRATEGY. You find me an options trader who thinks its a good strategy and ill find you a liar. Maybe WayneL can share his views, he is a seasoned options trader.

But from my epxerience and understanding, there is no quicker way to lose money short of burning it


----------



## Timmy (23 December 2009)

bilo83 said:


> lol! Why the hating? I'm not the guy calling you during dinner to sell you insulation either. I was just trying to pass on my experience with the strategy. My lesson was don't overextend yourself, short puts = leveraged covered calls.




Don't take the comments the wrong way bilo - we did get a bit excited with the suggestion that naked puts were for 'mum and dad' investors.  Experienced options traders are at least equipped to make an informed decision on whether or not to partake.

And welcome to ASF!


----------



## mazzatelli (23 December 2009)

Naked puts/synthetic equiv has its place as a strategy - its not necessarily an instant loser.
As bilo points out, overextending leverage in terms of margin is the main trouble for retail.


----------



## lukeaye (23 December 2009)

mazzatelli said:


> Naked puts/synthetic equiv has its place as a strategy - its not necessarily an instant loser.
> As bilo points out, overextending leverage in terms of margin is the main trouble for retail.




Mazz,

Agreed that it is a strategy and a place, but where that is i have no idea.

Are you telling me you would sell naked puts?

The only way id sell a naked put would be if i was buying a put at a lower strike.

Uncovered is just crazy given volatile conditions.


----------



## mazzatelli (23 December 2009)

Leverage [margin and convexity] causes a lot of trouble.

I've seen many retailers put on bull put spreads as you've described in size with risk:reward ratios 15:1 for </=10c/spread. The loss is still massive once the short strikes are breached.

Uncovered - it is not necessarily bad, but will be contingent on risk/reward, implied vols, amount of leverage etc.
Alot of of vol bets with vanilla options are accomplished with straddles - and this is by insto's and funds.


----------



## lukeaye (23 December 2009)

mazzatelli said:


> Leverage [margin and convexity] causes a lot of trouble.
> 
> Uncovered - it is not necessarily bad, but will be contingent on risk/reward, implied vols, amount of leverage etc.




Mazz

How can you put a value on risk reward?

You risk is nearly unlimeted at least until it worth 0.

You cant convince me this is technically sound strategy


----------



## mazzatelli (23 December 2009)

So how do determine r/r when you are long equities? You don't have a predetermined stop to gauge r/r?
According to your logic the risk for long equities is also limited to zero?

I am presenting an argument that just because one is uncovered, does not instantly imply negative connotations [This isn't restricted to single puts]. Being covered [as with your example: bull put spread] can still lead to huge losses.


----------



## lukeaye (23 December 2009)

mazzatelli said:


> So how do determine r/r when you are long equities? You don't have a predetermined stop to gauge r/r?
> According to your logic the risk for long equities is also limited to zero?
> 
> I am presenting an argument that just because one is uncovered, does not instantly imply negative connotations [This isn't restricted to single puts]. Being covered [as with your example: bull put spread] can still lead to huge losses.




Mazz,

Put simply a g/stop loss order? I know what my maximum risk is, it has a value.

Forgive me if i am being ignorant but i believe no such thing exists for selling options. So i can easily identify my risk, you can't when selling options. This is my whole arguement.


----------



## wayneL (23 December 2009)

lukeaye said:


> Mazz
> 
> How can you put a value on risk reward?
> 
> ...



When you buy a stock, the risk is also nearly unlimited at least until it worth 0. In fact, the naked put has less risk on a face value basis than stock, because yoe receive a premum.

The operative word being face value. As Maz explained, it is the leverage that kills, not the strategy.

e.g.

Trader A buys 100 stock at $100. He has $10,000 in the deal.

Trader B sells a $100 put contract (=100 shares) for $3.00. Even though his margin is only circa $2,300 (including premium received, he still has $10,000 in the deal because that is the face value of the contract.

Let's say stock goes to zero.

Trader A loses $10,000

Trader B loses $9,700

It's obvious the put seller loses LESS. Therefore the naked put carries less total risk. (but less potential reward)

Where the perception of risk comes from with naked puts is:

People will sell 5 $95 contracts @ $1.00 and take in $500 premium. But their face value risk is *$47,000*. (5 x $95 x 100 - premium received)..

They have decided to snatch pennies from the mouth of a shark. Dumb.

It's the leverage that kills, not the strategy


----------



## lukeaye (23 December 2009)

wayneL said:


> Where the perception of risk comes from with naked puts is:
> 
> People will sell 5 $95 contracts @ $1.00 and take in $500 premium. But their face value risk is *$47,000*. (5 x $95 x 100 - premium received)..
> 
> ...




Yes It is due to leverage that your loss is accelerated, which is what i said.

But buying that many options is part of the strategy you have just excersied. 

And given my account size, which i mentioned, a poor strategy.

Also take into account you may not receieve dividends so do you really come out in front at all?

But the reality is, if you have 10,000 dollars you are not going to use $100 to trade the option.

The whole idea is to use the leverage, which is why you cover. You now have more buying power. And limited risk.

I understand what you are saying and its true given the concepts, but you are not going to trade like that.


----------



## wayneL (23 December 2009)

lukeaye said:


> Yes It is due to leverage that your loss is accelerated, which is what i said.
> 
> But buying that many options is part of the strategy you have just excersied.
> 
> ...




Incorrect. View my youtubes to understand why.

Bull puts, depending on how you leverage and position size, may have greater risk of ruin than naked puts.


----------



## mazzatelli (23 December 2009)

lukeaye said:


> Forgive me if i am being ignorant but i believe no such thing exists for selling options. So i can easily identify my risk, you can't when selling options. This is my whole arguement.




Luke,
r/r can still be gauged based on deltas generated or implied vol bpt. I admit that most don't stay uncovered all the way to expiry. 



lukeaye said:


> The whole idea is to use the leverage, which is why you cover. You now have more buying power. And limited risk.



When trading options one should consider the leverage carried by curvature, not only leverage concerned with margin requirements.

Well...in the end everyone should just stay the f**k away from options LOL jk :


----------



## lukeaye (23 December 2009)

wayneL said:


> Incorrect. View my youtubes to understand why.
> 
> Bull puts, depending on how you leverage and position size, may have greater risk of ruin than naked puts.




Yes of course their are other strategies which differ in this regard.

But from what i am presenting, not other strategies, there is no reason to do it.

Taking a margain loan to cover naked put selling IS A BAD STRATEGY. And that is all i am saying.

This is what i was told would be the strategy, this is what i am saying is the most idiotic strategy i have ever heard. There is no other set-up involved, no cover, no synthetic. 

Conceptually what you stated wayneL is correct i agree, but this is not the reality of how the strategy is presented and executed.


----------



## lukeaye (23 December 2009)

mazzatelli said:


> Well...in the end everyone should just stay the f**k away from options LOL
> jk :




Not bad advice if one doesnt know what they are doing!

Somebody who simply sells/advises to sell naked puts with $100 margain on a $10 000 risk, with a 15k account should not be trading options. AND THIS IS MY POINT

P.S Mazzatelli chuck another girl up, im interested to see the next one


----------



## bilo83 (23 December 2009)

lukeaye said:


> Not bad advice if one doesnt know what they are doing!
> 
> Somebody who simply sells/advises to sell naked puts with $100 margain on a $10 000 risk, with a 15k account should not be trading options. AND THIS IS MY POINT
> 
> P.S Mazzatelli chuck another girl up, im interested to see the next one




Yeah 15k is too small with 1,000/k ASX options. Good to diversify delta across a couple of stocks, preferably with low correlation. 

The other risk i didnt mention is liquidity. Sometimes there's no market in ITM options making it very hard to cut losses. This is a point of difference with long stock where its easier to execute stop losses.


----------



## wayneL (23 December 2009)

lukeaye,

Can I take some options lessons from you? :


----------



## lukeaye (23 December 2009)

wayneL said:


> lukeaye,
> 
> Can I take some options lessons from you? :




LOL.

All im saying is that he did not present anything else in this strategy. No synthetics, no covers, nothing else. Im not a genius with options and im not going to claim to be, but from my understanding, given the CONTEXT and scenario its madness.


----------



## cutz (23 December 2009)

I see where you're coming from lukeaye,

Early on in my option trading journey I was fortunate enough to have a cheap private lesson on the perils of naked puts courtesy of the ASX. 

These days I spread only.


----------



## lukeaye (23 December 2009)

cutz said:


> I see where you're coming from lukeaye,
> 
> Early on in my option trading journey I was fortunate enough to have a cheap private lesson on the perils of naked puts courtesy of the ASX.
> 
> These days I spread only.




Cheap private lesson! Ive had an expensive one hahaha, not my own but a friend selling naked puts on oil. Ill give you one guess when?


----------

