MidWeek Commentary

HI Financial Services Commentary 07-24-2018 MY STORY

HI Financial Services Commentary 07-24-2018

 You Tube Link:   https://youtu.be/0g7B6oJDZJ0

What I want to talk about today?


Let me tell you about my story and the way I Invest money in the stock market:

I sold business thinking I had 4 years of savings – 2.5 years

Trading education – Optionetics, Investools, Wade Cook, Spread Trade Systems, Safe Option Strategies

Prior to education I spent 5800 hours making money but giving it all back

I learned to collar – I’m NOT always right so when I am wrong I can make up some of the downward movement in stocks by using the put option as insurance

My wife thought I was crazy because…..?the stock market is like gambling !!!!


I collar trade because if I am wrong and a stock does NOT move higher I can make up some of the drop in it price

BUT I wanted to make “trading” a business and I found out that spread trading is too volatile for everyday people AND I found out adjusting doesn’t always mean you make a profit. 


My collar trading rules:

You don’t always have the stock, long put and short call on at the same time

You can create exploding collars with a leap short call, protective puts and strangles or straddles

Rule of 300 but would prefer to have 1000 share of stock ownership always

Because how easy is it for a stock to lose 10%, 20% or even 25% – Pretty Easy

1000 shares that cost $10 like Ford it cost you = $10,000

SO if you protect at $10 a share with a long put and the stock drops to $9 how many shares can I pick up?

10% – 100 shares, 20% – 200 shares,


Let’s work those number with 300 shares – 10% drop 30, 20% drop 60, 35 drop 95 shares

I DON’T always guess or know the tops and bottom of stock movement


Collar trading allows me to be wrong and still protect stock ownership

It is protection in a 2008 type of market, flash crashes, headline risk,

IS going to be trade war/tariff protection

We haven’t had a 10% correction in over 8 years going on 9 and we are overdue for a significant correction

 I started in 2006 a Registered Investment Advisory Service – Collar trading for middle American

In 2008 I made between 8 – 18 % ROI while most lost 45-50%

If you lose 50% what return do you need to gain it back – 100% ROI

When I don’t beat the market (S&P 500) I should be adding more share to your portfolio without asking for more investment

I can dollar cost average without asking for more funds to be put into the account


I want to do that – Get licensed (Series 6, 63 and/or 65/66, and 7)  Health and Life

You get a huge background check by the FBI/SEC and they have access to all of your financial account/info

You are now civilly and criminally at risk of being sued and charged with a felony as well as being fined, account frozen and licenses dismissed by the SEC

YOU can never satisfy everyone all the time


If you are trying to time the market you are playing a losing game

With that understanding any and all algorithm NEVER work

How much is now computer programming trading? Where you can have huge runs on sell orders

What is a stop loss?  – Is a price trigger to place a “MARKET” order that whatever the price is, is where you sell the stock


Things I learned when Investing:

Almost nothing works on my time table

I will spread trade within the collar trade meaning – Long puts bill become put calendars or bull puts

Short calls are turned in to bull calls

Protective puts are helpful in bullish markets

I hate capping profit potential with short calls

I love being able be like Warren Buffet and add more shares without having to ask for more money

I like knowing that a crash will not lose half my money

My probabilities of significant stock price movement happen around earnings and by protecting 2-3 months to avoid volatility crush keeps timing out of the equation


Bear Stearns = BS

139 years increased its dividend

$109 and the ATM price to buy long puts as a second order was $100 for a cost of $17

How much could I lose?=$26 dollars total  

A week later I add $80 long puts for $27 a contract  

AT $40 I add long puts for $19 a contract

They were frozen/liquidated and sold at $3.65

Exercise the $100 long puts for $100 per share

Following day bought BS at $3.65 and exercised @ $80 a share

Following day bought BS at $3.65 and exercised at @40

For about a 28% ROI on a company that went out of business



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