Watch out for these guys!

[Krusty the Klown]

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]

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]

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]

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]

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]

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]

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

 

[Krusty the Klown]

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]

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]

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]

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]

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]

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]

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]

"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]

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]

:jerry:alcohol::kiffer:

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

 

[Timmy]

:jerry:alcohol::kiffer:

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

You tipped it!

 

[nunthewiser]

You tipped it!

And its running like the wind

 

[lukeaye]

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.