References for a 17 year old looking to get into Day Trading?

Originally Posted by HgaleK

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Ah, yes, because a covered write is the same thing as purchasing a controlling share of a company with strong fundamentals and ensuring that it's managed to success?
Easy tiger, the Buffett comparison only concerns your walk in the park 15% annual returns. Say you put in the SF minimum of $100K now at age 20, by the time you reach WEB's current age, your net worth would be a mere $440 MILLION. And since getting 15% IRR is so EASY, my advice is to reach for something more challenging. A 20% per annum return (moderately easy, right?) would take you where few men have reached. Why not drop out of college now? Even if striking out on one's own is not your thing, fund managers would lust after your investing skill like they do after NY museum board seats.

I've known plenty of people who wrote options and got slaughtered when the market changed. I don't think the real risk of writing options is truly understood by most amateurs.

I can see certain times where I think it would be helpful to buy options in my own portfolio, but I continue to avoid it. It's not conductive to a growth/dividend portfolio to use options because you spend your dividend gains on them, in my opinion.

Over the length of time that I have been investing I've met plenty of people who were big into options, one being my uncle who trades them professionally. He cuts his losses without haste and is in cash at the end of every day, he also strictly buys them. I don't know how well he does on a percentage basis, but he makes a decent living.

I've also met the gunslinger types that think that everyone is an idiot who is not writing options and they're usually up in smoke as soon as the market changes.

Originally Posted by whacked

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Easy tiger, the Buffett comparison only concerns your walk in the park 15% annual returns. Say you put in the SF minimum of $100K now at age 20, by the time you reach WEB's current age, your net worth would be a mere $440 MILLION. And since getting 15% IRR is so EASY, my advice is to reach for something more challenging. A 20% per annum return (moderately easy, right?) would take you where few men have reached. Why not drop out of college now? Even if striking out on one's own is not your thing, fund managers would lust after your investing skill like they do after NY museum board seats.
Are you unfamiliar with the huge change in the way that trading works at the institutional level? Between the volume and regulations, it's not possible to simply scale up retail investment work.

I've known plenty of people who wrote options and got slaughtered when the market changed. I don't think the real risk of writing options is truly understood by most amateurs.

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Limited return, unlimited risk assuming that they aren't covered by owning the underlying, or not protected against by another option component. A naked write of any sort is incredibly dangerous and quite simply shouldn't be done.

Yep, agreed on the naked options. Give me and honest idea of the time frame you are using to calculate your returns.

Originally Posted by Tony Romo

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You realize he's trying to make money...? How much could he realistically make with just a little bit of money let alone even $10k...

if the OP had 100k he wouldn't be looking to invest it, it seems he would just keep and use it for university, after all that what he's trying to make the money for

Day trading is much like Vegas, every one claims to make money. Unfortunately, the reality of trading is not that rosy. Whatever. In the U.S., if you want to trade stocks and go intraday you need more than $25K in your account (regulation T). With 10k the amount of intraday round trips will be limited to 5 a week.

By the way:

Covered writes will NOT return 15% annually.

Options are much riskier than the average mutual fund.

And no, you can never fully hedge an option.

Originally Posted by AnotherOne

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Day trading is much like Vegas, every one claims to make money. Unfortunately, the reality of trading is not that rosy. Whatever. In the U.S., if you want to trade stocks and go intraday you need more than $25K in your account (regulation T). With 10k the amount of intraday round trips will be limited to 5 a week.

By the way:

Covered writes will NOT return 15% annually.

Options are much riskier than the average mutual fund.

And no, you can never fully hedge an option.

I don't see it claimed anywhere that you can fully hedge an option. The same goes for the stock the one chooses to buy and hold. If you're going to hedge it, you're going to be buying an option, and it's going to run you a premium for that luxury. Otherwise you're looking at unlimited risk by being long in a stock.

Originally Posted by phreak

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I would totally +1 the poker idea if this were 2006 or if the OP is not in the US
I am the one who first mentioned poker. I should have clarified my thoughts on this. The OP will be going to college. I would suggest home games which are not raked. If you are a poker player can you imagine playing with college kids? My conscience wouldn't let me.

Originally Posted by popbot

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"There are thousands of people smarter than you, working harder than you, with more tools than you have, analyzing every bit of data on every stock in every market. You are not special. You do not know anything."


Perfect.

True, no one has outright claimed that you can fully hedge an option. I included that point only to emphasize the risk of structuring options. By the way, a covered write (long the stock short the call) is the same than selling a put. That puts you in the insurance business: fairly profitable but you need a good amount of capital (>$100,000). This is basically the anti-Taleb strategy.

Maybe the OP could write a book about how to make millions on the stock market. They seem to sell well.

Originally Posted by Steve Smith

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I am the one who first mentioned poker. I should have clarified my thoughts on this. The OP will be going to college. I would suggest home games which are not raked. If you are a poker player can you imagine playing with college kids? My conscience wouldn't let me.
I would suggest <NL50 6max online tbh. Even on the US sites, players can average >$15/hr with some study/coaching. And ime it is much easier to get better online as opposed to live due to the sheer mass of hands played and stat tracking. For solid online winners, live NL is basically printing money with zero variance.

Originally Posted by AnotherOne

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True, no one has outright claimed that you can fully hedge an option. I included that point only to emphasize the risk of structuring options. By the way, a covered write (long the stock short the call) is the same than selling a put. That puts you in the insurance business: fairly profitable but you need a good amount of capital (>$100,000). This is basically the anti-Taleb strategy. Maybe the OP could write a book about how to make millions on the stock market. They seem to sell well.
I'm familiar with synthetic positions . I was referring to writing calls against long term positions, not a short term buy-write. The books aren't where the money is. The books are used to generate interest for the real moneymaker- seminars.

The irony is strong in this one. What do you know about owning and running a business? What do you know about starting a business? A friend of a friend loaded off of some genius startup of his?

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I don't understand. Are you seriously saying a painting business for a 17 year old is hard to start? And are you implicitly comparing it unfavorably to the difficulty of learning how the financial markets work? I can only assume you are not, as that would be patently absurd.

Which is why one shouldn't try and trade like a financial institution. It doesn't work.

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This is a non sequitur.

Get into shorting OP.

Find some good stocks, like Halliburton, Cooper Industries, Humana....and just SHORT THE **** OUT OF THEM.

It can make me, I mean you, rich.

"Which is why one shouldn't try and trade like a financial institution. It doesn't work. "

Not trading like a financial institution is probably pretty good advice if that means rebalance only a few times a year, stay away from derivatives, buy low volatility/beta stocks, etc.