New option traders can make many mistakes when they first start trading options. Here is a quick list on what to do and what not to do as you come into the options market for the first time. Are Options Good for Beginners? “Fish see the bait, but not the hook; men see the profit, […]
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Warren Buffett had an interest in being rich from an early age. He said he read all the books about finance from the Omaha public library by the age of ten years old, and some twice. He tried many small business ventures as a kid selling chewing gum, collecting glass Coca-Cola bottles to return for
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Net worth is calculated by the total value of every asset that an individual owns subtracted by all their liabilities. Net worth can vary greatly over someone’s lifetime based on where they are in their financial journey. College graduates can even start out with a negative net worth as they have a degree but no
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There are fourteen primary levels of wealth that are each distinct in their experience both mentally and financially. Most people can look at this list and identify where they are in their financial journey rather quickly. Two keys to personal finance is to number one identify where you are, and number two set goals for
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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
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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
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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?
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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
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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
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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
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