SMSF Investment StrategiesSharing Simple Strategies for Self Managed Super Funds
Options for Stock Investors Training Pilot
Update (12 April 2012): The pilot has been completed and our training and mentoring program is now “live”. Please visit our “Low Risk Income Strategies” website for more information.
We have finally completed the last of the training videos and our Options for Stock Investors training program is now ready for pilot testing. We would like to invite our blog readers who wish to learn the options strategies that we have successfully used in our SMSF to be part of our pilot testing team. Our strategies focus on how to use options for managing risk and generating extra income from a stock portfolio.
Risk Management
- Learn how to protect your entire stock portfolio in market corrections
- Learn how to use put options to provide a guaranteed stop loss
- Learn how to protect unrealised capital gains
- Learn how to hedge stocks that do not have options
- Learn when to hedge and when to remove your hedge
- Learn different ways of managing risk using both put and call options
Income Generation
- Learn how to generate extra income from your stocks by selling covered calls on stocks which have options
- Learn to generate extra income from cash in the bank while waiting to buy stocks at a discount by selling put options.
Many thanks to my dearest husband Kingsley who has sacrificed his weekends (and Top Gear viewing time) to help me produce the training videos and to fix up the training website. Thank you to all readers who have written in to enquire about the pilot program since I first mentioned it in my Learn, Do and Teach post. From the feedback received, I realise that I need to clarify 1) what the pre-requisites are for doing this training program 2) what is expected from pilot students and 3) how much it will cost.
Pre-requisites
The only pre-requisite is that you are already a stock investor i.e. you know how to buy and sell shares and you understand the risks of owning shares. We teach both risk management and income strategies in the program. If you are only interested in the risk management strategies, there is no recommended minimum trading capital as all you will need is a small amount of money to buy put options to protect stocks that you already own. However, if you would like to learn to trade the income strategies, we do recommend that you start with a minimum trading capital of $30,000 because of the high commissions involved in trading options in Australia. If you wish to do covered calls on a $30 share like CSL, you only need $3,000 to buy 100 shares to sell one option contract. You may receive $100 in options premium from selling one call contract but the minimum commission is around $35-45 per trade. Hence, if you only sell one contract, most of the income received will be eaten away by commissions, which does not make sense financially. However, if you buy 300 shares and sell 3 contracts, you will receive $300 of premium so your commissions will only cost you 10-15% of the income received. We recommend a minimum capital of $30,000 to enable you to practice doing the strategies over 3 stocks with a $10,000 allocation for each stock. However, you can always start with a smaller capital if you just want to learn the concepts and are happy to treat commissions as part of the cost of your education.
What we expect from pilot students
All we expect from pilot students is your time to familiarise yourself with Exchange Traded Options by reading some materials from the ASX website, watching the training videos and to giving us your feedback. Your feedback is invaluable to us as it helps us understand what students need and where the training gaps are. If you like our training program, we would appreciate a testimonial and your permission for us to use it on our website for advertising purposes.
How much it will cost
There is no cost for the online training program (i.e. ASX training and our training videos) for pilot students. However, if you wish to have personal mentoring which includes a one-on-one session per week, the cost is $1000 for 3 months of mentoring and we are offering a 20% discount for pilot students. Mentoring is a pretty flexible arrangement based on student needs and could include reviewing your current portfolio to work out appropriate strategies, reviewing your investment or trading plan, and of course providing hand holding when you start trading with real money. There is no need to travel to Melbourne for mentoring as I have found it can be done quite effectively using video conferencing tools like Skype.
There are limited places available so do let me ASAP by sending an email to Christina@lowriskincome.net if you would like to participate in the pilot test. You will be given a student ID and password once we get your agreement to our non-disclosure request.
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