With options trading, brokers quantify different levels of risk exposure for different types of option plays and traders must be approved for each level. The level is based on the risk that the broker is exposed to with potential open ended unhedged short options. The option trader must have a correspondent hedge to limit the […]
Option Trading in 4 Levels of Complexity Explained Read More »
In finance there is both bad debt and good debt. Bad debt is owing money on depreciating assets that have fixed payments and go down in value. Good debt is owning an asset by using debt that goes up in value and/or creates positive cash flow above the debt payment and expenses. All debt comes
5 Ways Rich People Make Money With Debt Read More »
Just like Stephen Covey found the effective habits of successful people through his studies I have found the common habits of successful traders through research. Many similarities for what creates success in any field. Let me breakdown the seven habits common in most successful traders. 1. Use A Positive Expectancy Model What is Positive Expectancy?
7 Habits of Highly Successful Traders Read More »
Options are a market of derivatives that gives traders the right to buy or sell shares of stock over a set time period at a specific strike price for the cost of the contract. The options market is a zero sum game where there is a seller and buyer for every contract until it is
Options Trading for Beginners (The ULTIMATE In-Depth Guide) Read More »
Bayesian thinking is successfully applied to professional fields requiring statistics and also to those considered outside of traditional statistics like education, computer programming, software, philosophy, economics, medicine and the practice of law. Bayesian thinking is a mental model which allows us to adapt our thinking reactively to new evidence as it arises and adjust our
Bayes Theorem, the Geometry of Changing Beliefs Read More »
There are two primary methods for investing in the stock market: value investing and growth investing. Value investors want to buy a dollar in value for 50 cents today and a growth investor wants to but a future five dollar value for one dollar today. They are different ways of thinking but both can be
Growth Vs Value Investing Read More »
According to the stock trading platform Etoro, they found that a whopping 80% of day traders lose money over the course of a year and the median loss is -36.30%. Also, 75% of all day traders end up quitting within just two years. In 1999, The North American Securities Administration Association (NASAA) reported 70% of
Why 80% Of Day Traders Lose Money Read More »
Real estate and stocks are two different asset classes. Real estate is owning properties, buildings, or homes while stocks are owning equity in a publicly traded company. Both types of assets can appreciate in value for capital gains and both can be used to create cash flow. Many factors effect which investment could be right
Real Estate vs. Stock Market: Which One Will Make Me More Money? Read More »
Home prices minus the inflation rate equals real home prices. The historical performance of home prices has to be looked at in terms of inflation adjusted returns not nominal home prices. If your house goes up 10% in one year but inflation also goes up 10% you didn’t have a 10% return, your house was
Why Home Prices Haven’t Crashed Yet Read More »
Warren Buffett believes that compared to the potential of companies and stocks that real estate is a lousy investment. This is speaking relative to business ownership as he does think money can be made in real estate especially in times of market mispricing. However, his edge is in analyzing the value of future company cash
Warren Buffett: Why Real Estate Is a Lousy Investment Read More »