How many of you beat 15% this year?

[jay santos]

My Vanguard 500 Index Fund was up 15.8%.

Every year the number of mutual funds that beat the S&P 500 gets smaller and smaller.

Put your money in an index fund and forget about it.

[Indy Coug]

23.32% return with my diversified 401k holdings: 5/18/2006 to 5/18/2007

[Colly Wolly]

GS. I have almost doubled my money in the last year.

[UtahDan]

GS. I have almost doubled my money in the last year.

Me too. $1 + $1 = $2

[FMCoug]

I've averaged about 8% / month over the past 6 (since I got into options trading). We'll see if I can maintaint that over the long haul.

[Indy Coug]

I've averaged about 8% / month over the past 6 (since I got into options trading). We'll see if I can maintaint that over the long haul.

If you could maintain that over the long haul, everyone would be doing options trading.

[ewth8tr]

23.32% return with my diversified 401k holdings: 5/18/2006 to 5/18/2007
26.38% for my 401K between 6/3/06 - 6/3/07

It helps that my employers stock has risen over 45% in that time period :)

[jay santos]

If you could maintain that over the long haul, everyone would be doing options trading.

Options and day trading: the pro's take from the rookies and give to the brokers.

[FMCoug]

If you could maintain that over the long haul, everyone would be doing options trading.

Yes and no. Most people can't stomach the risk with options and/or aren't willing to invest the time to learn the correct strategies. The lion's share of $ in the market is in mutual funds / 401k / passive investments.

[jay santos]

Yes and no. Most people can't stomach the risk with options and/or aren't willing to invest the time to learn the correct strategies. The lion's share of $ in the market is in mutual funds / 401k / passive investments.


So most people aren't willing to invest the time to learn the correct investing strategies in order to double their money every 9 months? Sign me up. Is there some kind of newsletter I should subscribe to?

[FMCoug]

So most people aren't willing to invest the time to learn the correct investing strategies in order to double their money every 9 months? Sign me up. Is there some kind of newsletter I should subscribe to?


Sadly, yes. And there are many newsletters willing to take your money if you think it's that simple. ;)

If you're serious, I'd recommend "Options as a Strategic Investment" by Larry McMilan as a starting point. Though I suspect you're being facetious and don't think it's possible.

FWIW, my primary strategy is the same one Warren Buffet used when he first started.

[Indy Coug]

There's no way investment strategy can yield a 100%+ annual return over the long haul. I triple dog dare you to provide any reputable source to verify this can be done.

[FMCoug]

There's no way investment strategy can yield a 100%+ annual return over the long haul. I triple dog dare you to provide any reputable source to verify this can be done.

Not sure what you'd consider a "reputable source". But the fact of the matter is it's being done. Sure, there are a lot more losers in the game than winners, but there are winners.

[jay santos]

Not sure what you'd consider a "reputable source". But the fact of the matter is it's being done. Sure, there are a lot more losers in the game than winners, but there are winners.

If there are more losers than winners, then how do you think you're going to win more than average? Are you smarter than everyone else? Do you have access to more information? Luckier? Lot of smart guys with a lot of resources trying to do the same thing you are.

[FMCoug]

If there are more losers than winners, then how do you think you're going to win more than average? Are you smarter than everyone else? Do you have access to more information? Luckier? Lot of smart guys with a lot of resources trying to do the same thing you are.

Not necessarily smarter, but the lion's share of retail options trading is people who really don't know what they are doing and might as well be in Vegas. Here's an interesting article from Forbes on the subject:

http://members.forbes.com/forbes/2007/0604/152.html

To a large degree, the article agrees with you. However, they do discuss covered calls and protective puts towards the end and how they can be used to boost your returns. The primary strategy I use is a combination of the two.

Lots of people lose money in options because they attract the same type of "get rich quick" types as MLM, etc. But if you're serious about it, understand options pricing, the greeks, the Black-Scholes model, etc.; and not try to hit home runs every time at the plate, you can be successful.

[FMCoug]

Lots of people lose money in options because they attract the same type of "get rich quick" types as MLM, etc

Just thought of an example. I once attended an options trading seminar and got in a discussion with the guy next to me regarding covered calls. He said he didn't like them because the return was too low (only 5% or so per month). Perfect example of the retail options trader who has been sold the bill of goods by the seminar / dvd / newsletter providers that you can make enormous returns trading options directly.

These are the people that eventually lose it all and give options a bad rep.

[jay santos]

Just thought of an example. I once attended an options trading seminar and got in a discussion with the guy next to me regarding covered calls. He said he didn't like them because the return was too low (only 5% or so per month). Perfect example of the retail options trader who has been sold the bill of goods by the seminar / dvd / newsletter providers that you can make enormous returns trading options directly.

These are the people that eventually lose it all and give options a bad rep.

When it comes to investing, if you think you're going to get a return more than 1.5 x market average, you're in a get rick quick mentality, and IMHO you lack understanding of the market. You're talking 10 x market return vs 20+ x market return. You're in la la land as far as I'm concerned.

[FMCoug]

When it comes to investing, if you think you're going to get a return more than 1.5 x market average, you're in a get rick quick mentality, and IMHO you lack understanding of the market. You're talking 10 x market return vs 20+ x market return. You're in la la land as far as I'm concerned.


Okay. Have fun with your index funds. I guess I prefer la la land as the trades I closed this morning put me up 12.5% for the June options expiration period, and there is still two weeks left.

[jay santos]

Okay. Have fun with your index funds. I guess I prefer la la land as the trades I closed this morning put me up 12.5% for the June options expiration period, and there is still two weeks left.

Ask yourself this...

when you went to the options seminar, did you wonder why the guy or company teaching the seminar was giving away their secrets to you for peanuts compared to what they would make sitting home employing said options strategies?

[FMCoug]

We're obviously going to have to agree to disagree on this. You obviously think I'm lying about my returns ... so be it.

[jay santos]

We're obviously going to have to agree to disagree on this. You obviously think I'm lying about my returns ... so be it.

I don't think you're lying about your returns. I just don't believe you can sustain it long term, and if you're talking about returns that are in the 10x market value area, your risk level is such that you could lose it all quickly.

[FMCoug]

I don't think you're lying about your returns. I just don't believe you can sustain it long term, and if you're talking about returns that are in the 10x market value area, your risk level is such that you could lose it all quickly.

Fair enough ... time will tell. Clearly options is a high risk, high reward strategy. And this is certainly not my only avenue of investing.