I've been wanting to learn to trade options, but I couldn't figure out how it differed from "buying on the margin" and "short selling." So I thought it might not be risking only the money in the account and could mean debt or theoretically infinite loss. This is helpful to see everything at once and distinguish out "covered options."
When trading options I only have covered options for the same reason. I also like the idea of selling cash covered put options to get stocks cheaper while getting paid to wait from the premiums.
So im stumble across your channel seems very underrated. Do you think gold is really good hedge to park my money during recession/market bubble crash? Or should i just stick to cash for a while to buy the dip after the bubble crash?. I earn most of my money from crypto, and i have pretty low experience on what to do during crash/pandemic. Also i never trade stocks. (I think both gonna go correction during crash). Any detailed opinion greatly appreciated and could change a family lives on the other side of the world. Sorry for bad english
Another good point that you didn’t mention is that with blue chip stocks the margin borrowing percentage is 70% , example in Canada royal bank and Endbridge 70% margin usage allowed , other stocks are only 50%. IMO margin shouldn’t be used for high VOL.
Thoughts: when you combine different investments (classes with different risks & correlations), then the overall risk adjusted return likely drops. This is the basis of Modern Portfolio Theory. See: efficient frontier, MPT, Sharpe Ratio...Diversification accounts for about 88% of your returns, costs matter too.
Great video. What do you think about this idea? Lately I’ve been thinking about taking out margin on a small percentage of the value of my investment account say 20% use the extra 20% that’s on margin to buy the S&P 500( which is what most of my investment is in already. Would an average 10% return on the money cover the fees on the margin and give me a couple percent gain over the long run or would the return not cover the margin interest? Just things I’ve been thinking about lately.
Most brokerages are changing 10-12% right now so if someone had a 10% return that would actually be a net loss. I stay away from margin as it adds even more risk and reduces long term returns in most cases.
The bank was bought out and the majority of the issue was with a run on the bank and the underlying treasury assets being less due to increase in interest rates. The Fed opened a window to trade the treasury asset for full face value to keep the banks solvent long enough to be bought out so not exactly the same as being FDIC covered.
I've been wanting to learn to trade options, but I couldn't figure out how it differed from "buying on the margin" and "short selling." So I thought it might not be risking only the money in the account and could mean debt or theoretically infinite loss. This is helpful to see everything at once and distinguish out "covered options."
When trading options I only have covered options for the same reason. I also like the idea of selling cash covered put options to get stocks cheaper while getting paid to wait from the premiums.
awesome!
Very informative! Thank you very much sir.
Very nice video thankyou for all your hard work
Thanks for watching!
You're really clear in the explanation! compliments!
Is there any way I can get in touch with you?
Thanks, i'm young and you're helping me understand about money.
Thank you! Very informative.
I like your channel, always useful information for usual people..
Glad to hear that!
So im stumble across your channel seems very underrated. Do you think gold is really good hedge to park my money during recession/market bubble crash? Or should i just stick to cash for a while to buy the dip after the bubble crash?. I earn most of my money from crypto, and i have pretty low experience on what to do during crash/pandemic. Also i never trade stocks. (I think both gonna go correction during crash). Any detailed opinion greatly appreciated and could change a family lives on the other side of the world. Sorry for bad english
Any take on small caps? S&p 600, etc?
Big bro type vibes, thank you.
Another good point that you didn’t mention is that with blue chip stocks the margin borrowing percentage is 70% , example in Canada royal bank and Endbridge 70% margin usage allowed , other stocks are only 50%. IMO margin shouldn’t be used for high VOL.
Thoughts: when you combine different investments (classes with different risks & correlations), then the overall risk adjusted return likely drops. This is the basis of Modern Portfolio Theory. See: efficient frontier, MPT, Sharpe Ratio...Diversification accounts for about 88% of your returns, costs matter too.
Great video. What do you think about this idea? Lately I’ve been thinking about taking out margin on a small percentage of the value of my investment account say 20% use the extra 20% that’s on margin to buy the S&P 500( which is what most of my investment is in already. Would an average 10% return on the money cover the fees on the margin and give me a couple percent gain over the long run or would the return not cover the margin interest? Just things I’ve been thinking about lately.
Most brokerages are changing 10-12% right now so if someone had a 10% return that would actually be a net loss. I stay away from margin as it adds even more risk and reduces long term returns in most cases.
What about silicon bank. Large ( over millions) account holders were made whole by middle lower class taxpayers through FDIC?
The bank was bought out and the majority of the issue was with a run on the bank and the underlying treasury assets being less due to increase in interest rates. The Fed opened a window to trade the treasury asset for full face value to keep the banks solvent long enough to be bought out so not exactly the same as being FDIC covered.