It all requires research though. I wouldn’t just blindly buy bonds, RE, or other investments without research.
What do you think of hoarding CASH as the most effective hedge?
The only problem is that cash does not earn much these days, it actually looses money if govt prints more of it.
If an investor does not want to leave cash uninvested, then a hedge must be hound that is less risky and less costly than cash.
Waste. You can at least do CD or short-term bonds. The issue is decent dividend stocks have higher yield. I honestly don’t get who’s buying bonds at today’s interest rates.
What is a good option strategy to re-enter this activity (option trading). My coworker started option trading business and I traded (iron condors) with him for about 9 months about 10 years ago But, due to being busy at work, and not having fun with someone else’s strategy, I gave up. I felt I was simply following someone else’s order, and not brining to table any of my own understanding. I stopped. The real reason I stopped is a trade I entered accidently. I entered a trade by mistake thinking the options are expiring next week. Next day I realized the options are not expiring for two more weeks. Every night I slept preying my options do not get called. My prayers were heard. options expired useless. I made good money on it but went through lot of stress.
Hedge against what? A single stock or a bear market?
For stocks, there is no need to do any hedging for consolidation (< 10% decline) that last a few days/ weeks. It will eat into your return as pointed out by @marcus335 To reduce your stress, can hedge against correction (>10% decline) that last months. Definitely go into cash if you feel a bear market is coming. If every assets are dropping in value, your CASH is appreciating
Don’t like iron condor (IC). Small gain, large loss. A strong trend can wipe out many successful trades. IC is particularly risky when market is about to correct (> 10% decline) or the underlying is a highly volatile stock. Some1 manage to popularize IC trades, I think about 5-8 years ago, before that never heard of.
Regarding IC , i was told it is good when market is moving sideways. But now I understand why it is not good because market rarely goes sideways for long.
What are good option trading strategies?
KISS. Long calls for uptrend, long puts for downtrend. Fast open and close. Other types of option position tends to be a little hard to get in and out with the price you like.
Aggressive goes for weekly and near-month.
Conservative goes for far-month and LEAPS (is a cool replacement for underlying). I have a buy n hold mindset so I bought mostly LEAPS calls.
If implied volatility is too high like 40%+, better to go for underlying directly.
Do your trading platform has paper trading? Think and Swim of Ameritrade has paper trading where you can practice trading.
I traded real when i was trading Iron Condor. But, I am planning to do small size real trades after paper trading for few months. Paper trading does not give exposure to emotional aspect of trading. So, has limited training value.
I subscribed to that service for about 18 months. I learned a ton. I don’t have time to trade as frequently as his method requires, but I still use a bunch of the rules. The 10-day stop is from his rules. Also, the alignment of ascending or descending 200-50-10 day moving averages is from his work.
I’ve become very against paying for time premium. It makes it so you can be right about direction but lose money if the move isn’t bigger then the cost of the time premium. That means I buy deeper in the money calls and end up with 3-4x leverage vs the stock movement. It also means avoiding the disaster trades of 50%+ loss.
Sound like swing trading. May be of interest to @pandeyathotmail should he interested in swing trading (multi-day to multi-week).
My comments on hedging are from a position (multi-month) trader’s to short-term (less than 1 year) investment perspective. Is why I use LEAPS and ignore consolidation (<10% decline). For swing traders, need to care about any consolidations for multi-day swings and more than 3% consolidation for multi-week swings.
I don’t do such computation. Just check my LEAPS calls are around 3x leverage.
On this forum, there is wealth of information and years of cumulative learning. Can we have a thread to discuss Trading topics like , Timing entry and exit , Pricing, portion sizing etc, so that we do not loose the information. As it is, the information is buried in several threads. We discuss these topics in various threads and I am sure I will loose them after few months (unless i save them somewhere).
Start it!
Reasonable suggestion. 5G and cloud computing are gloves in hand, perfect match, could be huge gains for a few years for these big five. Should I sell all my Austin rentals to buy them?
Should I wear my pessimists hat? I have no great expectations from 5G technology! It is not a disruptive or earth shattering technological leap as far as I can see. But, discount my view with the fact that I am not a sophisticated investor and lack vision to see how some new technology can be usefully deployed. A good idea would be for someone to come forward and tell what is the USP of 5G?
If what you said is true, why is Trump goes on a Tariff war vs China and Huawei over 5G tech?
5G = very very very fast speed = VR/ AR is possible at reasonable cost. This open up many apps that is not possible now.
good point!!
If true 5G is around, it booms the internet speed, even 10x of current bandwidth (instead of 100x) is far better growth for data analysis, cloud infrastructure…etc
True 5G is big transformation that will close most of the malls including all movie places like AMC theaters and other shopping malls.
T-mobile has 5g but my iPhone 11 doesn’t