Couldn’t Resist the Picture, But It Makes A Point
Up to 100 emails arrive in my inbox daily, and I’m reminded of some education that is available courtesy of http://www.tradewins.com/options/ Which has a cornucopia of trading materials. I make no recommendations, nor do I pour scorn on these. We all have to find our own way.
The Harshest Education Comes From Losses
It’s all too easy to get started with trading stocks or spread bets. I have met so many people who have tried trading stocks as there are no barriers to entry. I have yet to meet any who make serious coin from stocks. I have met many who have lost a bundle on stocks who tell me ‘options are risky’. Until I ask “What do you know about options?”
A World of Difference and a Level Playing Field
It’s easy to know plenty about stocks-it’s all public domain. Eventually. There’s a huge difference between information on stocks and the calculations on options. We have an up-to-the-minute analysis, as opposed to selective ‘news’ on stocks which is always out of date. There is, however, one reliable metric about stocks…. the amount of tax paid. You cannot know that in any meaningful timeframe. Trading thus on old information cannot possibly mean it’s a level playing field. It is why we trade options -we can do the same calculations as the market makers. The rules are the same for both parties.
Gauging probabilities from a position of understanding, beats blindly (at best partially sighted) buying of stocks. Though QE has ensured the 25% of GDP gifted to the banks has been a help for the one trick pony market. You have to wonder if this is connected to the impending pensions meltdown.
Yes I got burned trading stocks based on the ‘fundamentals’ it’s an industry that serves only the fund managers-yet still they cock things up. Almost £400 billion in QE-we don’t even know the real figure-this really gets me angry. Banks, like politicians, are there to serve, not to dictate. The economy has never been so skewed, and like an athlete on banned substances, performance looks great, until it gets found out. That is simply my opinion- maybe things are going great- car sales are up, but so is household debt.