Barney
To me it's not about whether Bill is profitable or not. He very well could be, don't know, don't care really (but would be interesting to see some live trades).
My concern is twofold,
1/the massive position size
2/massive contest risk
Lets look at the example several pages earlier where he purportedly trade 27 x 1000 share contracts = 27,000 shares of underlying, with a delta of approx 0.5 giving a total number of 13,500 deltas.
The bid ask spread is typically about 5 - 8 cents... lets say 5 cents to be generous.
That is 27,000 x $0.05 = $1,350
This means that if the share did not move and he exited, it would have resulted in a $1,350 loss PLUS commission.
It also means that the underlying has to move > 10 cents just to break even (remember our 0.5 delta)
That's a massive impost to overcome in a daytrading system.
Now compare that to Shares or CFDs where to gain the same 13500 deltas, we only need 13500 shares with a spread of typically 1 cent.
That's $135 plus commission contest risk.
The options are 10 TIMES more expensive to trade in terms of contest risk.
Daytrading sytems, if positively expectant:, are not greatly so, because you never get huge outliers.
They rely on trade frequency to make money.
Maybe Bill is a good enough trader to overcome 10x contest risk, maybe not, but are the people he teaches?
I would bet London to a brick and Mombasa to a melon that very very few can overcome this.
S you see it's not about Bill being profitable, it's about Bill teaching about the most inefficient day trading modality currently available... and charging money for it.
ASIC found that statements made by Mr Wilson, who is from Hervey Bay, and the two companies in marketing the software were misleading and deceptive. These statements included:
“Writing covered calls is the same as ‘Share Rental’ or renting out real estate”;
“Options trading is easy”; and
“Returns of 5-10 per cent per month and 60-120 per cent per year can consistently be achieved through use of Lifestyle Options – Share Rental”
Guppytraders.com (ACN 089 941 560) Pty Ltd is not a licensed investment advisor. Tutorials in Applied Technical Analysis, which is generally available to the public, falls under the ASIC Media Advice provisions. The analysis notes are based on our experience of applying technical analysis to the market and are designed to be used as a tutorial showing how technical analysis can be applied to a chart example based on recent trading data. The newsletter is a tool to assist you in your personal judgment. It is not designed to replace your Licensed Financial Consultant or your Stockbroker. It is been prepared without regard to any particular person's investment objectives, financial situation and particular needs because readers come from diverse backgrounds, with diverse objectives and financial situations. This information is of a general nature only so readers should seek advice from their broker or other investment advisors as appropriate before taking any action. The decision to trade and the method of trading is for the reader alone to decide. The author and publisher expressly disclaim all and any liability to any person, whether the purchase of this publication or not, in respect of anything and of the consequences of any thing done or omitted to be done by any such person in reliance, whether whole or partial, upon the whole or any part of the contents of this publication. Neither Guppytraders.com Pty Limited nor its officers, employees and agents, will be liable for any loss or damage incurred by any person directly or indirectly as a result of reliance on the information contained in this publication. This is not a newsletter of stock tips. Case study trades are notional but analysed in real time on a weekly basis.
I like Daryl Guppy's approach:
E.G.
Doesn't claim to be licensed and structures his business accordingly.
<ETA> Although looks as though he is now, or uses licensed guys.
What is the situation if a person writes a book on Tech analysis or whatever?
Yeah good point. Someone writes a book explaining how CFD's work, the benefits of using them over physical equities, and some basic trading strategies including entries and exits. I would certainly regard that as having the potential to influence someone to trade.
But I imagine this is where ASIC exercise their discretion. There may even be a specific section of the corporations act that deals with books & authors, however I haven't been able to find it. What about if I wrote an e-book once a week? What about one a day? At what point is a communication a "book", as opposed to a "statement of opinion"? Is there even a difference?
I had a quick look at the Oxford judgement. There is nothing in there to indicate the prosecution was for providing software.
It was to do with the courses, and several misleading statements about how much money Steven Moore claimed to be making by trading.
http://www.austlii.edu.au/cgi-bin/s...0&synonyms=0&query=title(oxford investments )
ETA: I would love to know the theory behind being able to code in C++ making you exempt from requiring an AFSL.
Then we'd have the problem of jurisdiction.
What if the author lived in NZ or Canada or USA or..... Nigeria?: :
What if the website shuckster lived and hosted in some other jurisdiction and marketed it to Aussies?
Are you suggesting that if he'd only provided the software without instruction he would have escaped prosecution for carrying on a financial services business without an AFSL?
Telesonic said:Now it's an old judgement (1999), but it mentions Policy Statement 118 regarding investment advice and dealing through computer software and the internet. No corresponding regulatory guide exists now however...
22 In the present case there has been, first, an expression of opinion that, in specified circumstances arising from a particular kind of market analysis, trading in a particular way is likely to be profitable. Secondly, there is the provision of technical aids that assist in identifying those circumstances from day to day. The combined effect is the provision of financial product advice within the meaning of the statute.
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