planetwealth and options trading

Discussion in 'Share Investing Strategies, Theories & Education' started by quoll, 4th May, 2007.

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  1. quoll

    quoll Member

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    Mid Coast - South Australia
    G'day all

    Just wondering if anyone has had dealings with Planet Wealth

    Looking at options trading and other means of increasing cashflow.

    cheers
    quoll
     
    quoll, 4th May, 2007
    #1
  2. DaveJ__

    DaveJ__ Well-Known Member

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    No... Does look just like a 're-badged' Covered Call Strategy...

    If you don't know much about options then i would be very cautious...


    Wouldn't pay anything to learn that strategy! (BTW That is the same strategy as the infamous PeterSpann 'Magic Moo Cow') which has been discussed extensively on the Somersoft forum


    DaveJ
     
    DaveJ__, 4th May, 2007
    #2
  3. Redwing

    Redwing Well-Known Member

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    Is the Magic Moo Cow covered calls or a protected buy/write strategy?
     
    Redwing, 5th May, 2007
    #3
  4. DaveJ__

    DaveJ__ Well-Known Member

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    Magic Moo Cow... (also marketed as "Renting out Shares")

    Well technically it is a Protected-Buy-Write as in:

    Protected     : Bought PUT option of user-defined length(in months)

    Buy- The bought Stock (or Installment Warrants)

    Write - The Sold CALL option over the top. (usually 1month)

    You are hoping the Written CALL premium pays for your 'Expensive' PUT option with a few months to spare to get some free months of premium which is your NET profit.

    A Covered Call strategy is the same but without the Protective PUT, so yes you are correct.
     
    DaveJ__, 6th May, 2007
    #4
  5. Coach B

    Coach B New Member

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    The PW strategy is credit spreads not covered calls.

    They offer higher returns than CC but obviously with higher risk.

    A fair bit of skill, time and money management is required to manage your way out of trades that go pear shaped.

    Also a fairly strong need for technical analysis to identify potential trades.

    Can be lucrative in a rising market.

    Regards,


    CB
     
    Coach B, 9th May, 2007
    #5
  6. DaveJ__

    DaveJ__ Well-Known Member

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    "Renting Shares" is Covered calls...

    I never mentioned protected-writes, I did however mention protected-BUY-write :rolleyes:

    From their website... Sounds like writing calls for a few months to me??

    If you don't own the shars how can you 'rent them out'? Credit spreads don't own shares. Yes they are similar but they are different


    DaveJ
     
    DaveJ__, 9th May, 2007
    #6
  7. quoll

    quoll Member

    Joined:
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    Posts:
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    Location:
    Mid Coast - South Australia
    Thanks for the responses, has given me some more info. I'll keep chasing and learning, just need to find something that fits with my risk profile and can return more cashflow than a rental property.

    cheers
    quoll
     
    quoll, 11th May, 2007
    #7
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