Victor

Sydney, Australia

37m
answered Formula for how to distribute a loan payment between multiple loans such that the remaining principal accrues the least interest?
1d
reviewed Approve suggested edit on Which scenario is better for getting rid of mortgage insurance faster?
1d
comment Online brokers with a minimum stock purchase lower than $500
+1 - great answer !
1d
comment Online brokers with a minimum stock purchase lower than $500
With $20 in and $20 out in brokerage that is already 8% of the min. $500 trade - this means your stock needs to go up 8% just to pay your brokerage before you start making actual profits. Why would you want to go smaller than this and increase this percentage even further. By the way CMC Markets has the cheapest starting brokerage at a min. $11 per trade (less if you are a frequent trader).
1d
reviewed No Action Needed What is a clearing bank, in specific, what does RMB clearing bank do?
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reviewed No Action Needed Why is paying mortgage interest considered by some to be beneficial?
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reviewed Close All possible combinations for commodity spread
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comment Am I understanding buying options on stock correctly
@keshlam - "Options, if not exercised, are a guaranteed loss of the full investment." - No they are not, you can sell them back on the market before they expire. "That rationale only applies if you believe the stock will collapse seriously." - you don't have to believe it, but they do - remember the GFC ? It sounds like you know very little about the financial markets going by your answer and comments, so I don't think you should be giving advice to others. You clearly don't understand options, so you are correct in one thing - you should not be touching them !
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reviewed Approve suggested edit on Add > 5,500 (excess contribution) to Roth IRA for temporary investment?
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comment Where can one graph portfolio performance over time?
Vectorvest does but it is not free.
2d
comment Am I understanding buying options on stock correctly
@keshlam - options can be less risky than shares if used correctly - if you buy options you have a limited downside for a potentially unlimited upside. Fear and greed are both bad when it comes to investing, and they are what get most people into trouble.
2d
comment Where can you find dividends for Australian Stock Market Shares (ASX) for more than 2 years of data?
Like I said in my answer you could join an online broker for free, as most would have this kind of information.
2d
comment What does it mean that: "Home loan must be secured within 90% of the value of the property"
You should have this as an answer Joe.
Jul
21
comment Am I understanding buying options on stock correctly
The problem is not options, options are just a tool like leverage, and if used correctly both options and leverage are very useful tools. The problem is with greed causing people to try to use leverage, options and other similar tools to get rich overnight !
Jul
21
comment Am I understanding buying options on stock correctly
@gnasher729 - ???
Jul
21
comment Am I understanding buying options on stock correctly
@MSalters - 10 option contracts is the equivalent of 1000 shares. Each contract is for 100 shares. FX are considered the most liquid markets and they can move around quite a lot. If you are trying to say that the market is appropriately priced that all participants agree to the current value, and that this value will not change over time. Well this situation does not exist. If the price never moved you would be better off leaving your money in the bank !
Jul
21
comment Am I understanding buying options on stock correctly
@MSalters - if using options as a hedge, you are using them like an insurance policy on your underlying investments. In this case where the underlying price has not gone down, one has the choice of letting the option expire worthless, sell the option before expiry or roll it over to a new series. If trading the options for profits you can sell the option at a time when the underlying price has moved up (if a call). If you are suggesting that the underlying price does not move at all throughout the life of the option, then there is no liquidity in this stock - so why would anyone trade it?
Jul
21
comment Am I understanding buying options on stock correctly
Actually everyday investor can write (sell) options as well as buy them. Market Makers provide liquidity in the market for both buyer and sellers.
Jul
21
comment Am I understanding buying options on stock correctly
@quantycuenta - If you buy 1000 shares in a $10 stock your outlay is $10,000, and your potential loss is $10,000. In fact if the stock price falls by just 10% your loss will be $1000. If on the other hand you bought 10 option contract priced at $0.50 your outlay and maximum loss would be $500. Both options would provide a similar gain if the stock price went up. So your risk (for the same gain) is greatly reduced in buying options instead of the underlying shares directly.
Jul
21
comment Am I understanding buying options on stock correctly
I agree with most of your answer except you didn't include that you can buy or sell (write) options. Also if you are buying a Call Option you are limited in losing the option premium which in most cases would be much less that what you could lose if you bought the shares directly.
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