Bravo, Chris!
On Fri, Apr 30, 2010 at 7:17 PM, TheOptionClub <chris@theoptionclub.com > wrote:
I see...
First, I do not support or oppose any particular options strategy or
trading strategy. What I try to encourage is an intellectually honest
evaluation of strategies and trading methods. What Kurt and I have
debated over the last few years is 1.) the synthetic equivalence of the
married put and the long call option, and 2.) the renaming or
mislabeling of established options strategies. As a result of that
debate, Kurt has acknowledged the synthetic equivalence of the married
put / long call and has in later revisions of his "Blueprint" identified
each of his options positions with traditional naming conventions.
Kurt is still an advocate of his particular brand of married put.
Fine. To each their own...
One aspect of what Kurt Frankenberg has done with his Radioactive
Trading plan that I have always applauded is the attention paid to risk
management. That is the real foundation of what he is doing. Not the
DITM married put. In fact, if you watched this week's presentation I
highlighted the fact that these DITM married put positions carry a
rather low delta which may not be what you want if you're intent is to
get bullish. But, I also addressed the idea that by using call options
instead of married puts it is important to avoid the temptation of
committing an equal amount of capital to the calls as you would the
married put which would result in becoming over leveraged. That goes
back to risk management.
The last few months I have also had Charles Cottle the "Risk Doctor,"
John Summa, Ph.D., from OptionNerd, John Brasher from Call Writer, Mark
Espy from Market Tamer, Mark Sebastian from Option911, and Dan Sheridan
speak to our group. Dr. Summa trades options on futures, which I do
not. I do not trade covered calls they way John Brasher trades them. I
do not trade Mark Espy's "Wheel of Profit." I don't perform weighted
vega calculations before opening calendar spreads as Mark Sebastian
encouraged. I'm sure there are difference between the way Dan Sheridan
and I handle things.
What do these speakers and Kurt Frankenberg all have in common?
The commonality between each of these speakers is that they have
something to add to the debate. A temptation that plagues retail
traders is the desire to follow a single messiah or a prophet. The idea
that we can find "THE" course, "THE" mentoring program, "THE" one
missing ingredient to our success, often compels us to seek out and
follow a single voice...a single idea. It's convenient, if nothing
else. The trouble is that what works for one trader likely won't work
for another.
Why?
We're wired different. Our lives our different. We have different
needs, goals, aspirations, etc. My life is very different than John
Brashers', or Dan Sheridan's, or Mark Sebastian's, etc. I need to find
an approach that fits me, my personality, my lifestyle and schedule, my
financial goals and current capital structure, etc.
Kurt Frankenberg feels really, really good about owning stock that's
protected by a DITM put option. I look at the position, see the low
delta in contrast to the definitively bullish trade bias and wouldn't
want the position in my account. Looking at and trying to weight vegas
on calendar spreads would drive me batty. I'm not suited to it. Mark
Sebastian thinks we're all crazy if we don't!
Who's right?
That's why we have the open forum. It's why I have an "open door"
policy when it comes to the presentations. It may come as I surprise
but so far this year I have invited no one to speak to our group. All
of this year's speakers have asked if they could speak to us. I welcome
them when the do.
If I started censoring posts here so as to only allow posts that I
agreed with, this forum would die off. It's presently the busiest
options trading discussion board on the Yahoo! Groups network and I
think it's probably one of the better ones on the Internet in general.
A lot of different ideas get posted here, but that's what fuels the
debate and what makes for a robust education.
I also do very little to censor speakers, but I think that's why we're
fortunate with the number and the quality of presentations that we get.
The value is that a lot of ideas get laid on the table in front of us.
We are then free to discuss, debate, and study the merits of those
ideas. Some people may find that a particular speaker resonates with
them and may want to pursue those ideas further. Others may find that
very same speaker to be completely off putting.
I decided years ago that I'm not going to decide for anyone here what is
appropriate for them to see or hear. I'm parent to only one person in
this world and she is not a member of this group...not yet, anyway. The
rest of you need to decide for yourselves what makes sense in the
context of your life, your finances, your goals, etc. I can help fill
the table before you with many ideas and trading concepts for you to
sample and consider. They won't all be to your taste. They may not be
to mine, either! But then that's what makes all of this so interesting
to talk about.
Christopher Smith
TheOptionClub.com
--- In OptionClub@yahoogroups.com , "srj3inc" <faltu0@...> wrote:
>
> that you invited him for a presentation where once you were the one
who was opposing the view of the strategy. RAT is nothing more than a
marketing gimmick of a long call was the point of discussion.
>
> surprised that by inviting him, you indirectly supported the
strategy.
>
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The goal of TheOptionClub is to provide a forum for members to work together for the purpose of furthering our individual understanding option trading. All messages and postings, and any materials circulated are provided for discussion and educational purposes only. No statement contained in any materials from TheOptionClub should be considered a recommendation to buy or sell a security or to provide investment, legal or tax advice. All investors are encouraged to consult a qualified professional before trading in any security. Stock and option trading involves risk and is not suitable for most people. There is no guarantee that any information provided is accurate and, may in fact, be wrong. It is understood that the participants in TheOptionClub have varying backgrounds and degrees of experience in option trading, and that regardless of experience each member is considered a student. As such, any information distributed through TheOptionClub should be considered with a critical mind and not relied upon as an authoritative source.
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