3 Tips on Proper Planning for Traders

Your trading plan for 2018 is vitally important to your improvement as a trader.

A great plan can help you fulfill your potential. A poor plan can be self-sabotaging.

Here are three pro tips on proper planning for traders:

#1 Set two types of goals. While it’s fun to daydream about hitting big Performance goals. It’s the Process goals that will allow you to actually accomplish your performance goals. Spend A LOT more time on Process goals than you do on performance goals. You should review and journal about your Process goals each day. Maybe a few times per day…

#2 Realize that you may not know what is realistic in terms of performance goals. If you set unrealistic performance goals, you may feel like a failure when you are actually making good progress. Many traders abandon a great path to Consistently Profitable Trading because they don’t have someone to reaffirm that they are actually on the right path.

#3 Have an objective and impartial view of your trading strengths and weaknesses. Self-diagnosis is rarely a good idea. Not with health problems and not when you are deciding how you can fix your trading challenges.

For the rest of January, we are offering 2018 Private Trade Plan Consultations for a greatly reduced rate.

Click here to learn more about these personal consultations and the six ways they can benefit you.


SMB Training Blog

Dating Tips

From a Facebook friend: a helpful list of 10 things to talk about on a first date. Some excerpts:

  • How do you work to dismantle sexism and misogyny in your life?
  • What is your understanding of settler colonialism and indigenous rights?
  • Do you think capitalism is exploitative?
  • Can any human be illegal?
  • Does your allyship include disabled folks? (pro tip: don’t ridicule the wheelchair-bound diner at the adjacent table, though it might be okay to condemn wheelchair-bound sex criminals)

The good news is that there is a correct answer to each of these questions!

Philip Greenspun’s Weblog

New iOS App Trading Tips & Highlights

Options Chain

Options are a big part of the OptionsHouse experience. The Option Chain on the mobile application offers a way to quickly build an option spread of your liking or create a simple option trade. You can quickly scroll through the expirations and choose the one(s) you would like to view.

Make trade selections by tapping on the prices in the Bid and Ask columns of the Calls and Puts sections. As you build out your spread on the Option Chain, you can view your selected options locked to the top of the chain. You don’t have to constantly scroll through your various selections to double check that you have selected the correct contracts for your trade.

You can also customize your Options Chain experience by changing the settings. Control how many strikes you see, whether or not you want to see non-standard expirations, centering the near value, or even controlling what data points you want to see such as Volume or Delta. View those data points for calls or puts by tapping on Calls or Puts right below the expiration selection bar. Once you finish building out your spread, complete your trade by tapping on the trade icon in the bottom navigation bar. Inside the trade feature, you can make more edits to what you have selected in the Options Chain or just quickly finish your trade.

Positions

Keeping track of positions in your portfolio is important to any trader. When viewing positions on OptionsHouse mobile app, you can customize and quickly scroll through real-time streaming data points for your positions. There are also indicators attached to your positions such as ‘Open Order’, ‘Dividend’, or ‘Expiring’ to give you a quick glance at the status of your various positions.

You can also choose how you view your positions by grouping your strategies or changing which data points you want to see for your positions. In addition to changing which data points you see, you can change the order you see them in.

There are also several trade actions you can make in positions. You can add to a current position, close it, or roll an option by either going into the Position detail by tapping on a positions, or tapping on the Trade icon for each position. In addition to viewing your positions, you can easily navigate and see your order history and balances when looking at your positions.

        

Positions on mobile allows you to quickly glance at your portfolio so you can see your account value and the performance of your holdings in the market. It is also easily grouped with Balances and Orders which gives more detail on your account status and order history.

Trade

When opportunities in the market arise, you often want to seize them as quickly as you can. On OptionsHouse mobile, you can quickly build your trade by using the various trading features on the app.

Select a strategy (e.g. Iron Condor) from the strategy picker for a pre-defined spread template. You can then edit to suit your preferences or if you’re not comfortable with using a pre-set strategy, then you can build a custom strategy by adding legs and building your trade manually one leg at a time. You can edit each leg by tapping on it to open it in edit mode and then save the changes. You can also edit more than one leg at a time.

After building your trade, if you don’t want to execute your trade right away, you can save and view it anytime in Orders. Orders which can be found in Portfolio on the bottom navigation or by going to the more menu and navigating to Orders. In Orders, you can execute or modify the trade at a later date at your convenience.

In addition, there are other selections that you can make along with your trade in order to enhance it such as price types and term selections. Price types for single leg orders can be Limit, Stop, Stop Limit, or Market. For multi-leg orders, you can select Limit Debit, Limit Credit, or Market. You can also tap on the ‘Bid’, ‘Mid’, or ‘Ask’ buttons in the Price section to change the Limit Price. In the Term section, you can change the duration and also select whether your trade is All-or-None.

Trading is an integral part of OptionsHouse mobile experience. For ease of use, you can prepare your trade on various parts of the app and have it be built on the Trade Screen for quick execution. For example, you can build out a spread on the Option Chain, close or add positions in Positions, or execute an order in Orders. Once any of those actions are selected, the trade is built out for you on the trade feature. From there, you can edit your trade as needed or just go ahead and preview. If the trade is satisfactory then just confirm and you are done!

The post New iOS App Trading Tips & Highlights appeared first on OptionsHouse.

OptionsHouse Blog – OptionsHouse

Tips for tutoring 8th grade math

The 8th grader that I have been tutoring in math has been assigned to “advanced geometry” for next year. This is apparently the highest classification available in the local high school. Her father brought me a bottle of Champagne and said that all of the credit for this was due me. Of course it would have been rude to contradict him so I gratefully accepted credit for my student’s hard work.

Now that I have demonstrated the ability to claim success in this domain it is time to share what I have learned.

Basically the American K-12 math curriculum is so dull that it takes an almost inhuman effort to stay awake and focused while solving the pointless and repetitive assigned problems. As with flying, the crew concept improves performance. One crew member (the student) solves the problems while the other crew member monitors and offers reminders to (1) slow down, (2) write everything down, (3) make the smallest change to an equation at a time (e.g., don’t add 4 to both sides and divide by -3 in one step; that’s two operations and therefore one should rewrite the equation twice). The student will be trying to escape the pain and boredom by doing multiple steps in his or her head. This leads to errors that wouldn’t be made if the steps were simpler and the result of each step written down.

A lot of these problems are basically arithmetic, despite the fact that the subject is called “math”. The school expects exact answers from a calculator, but of course it is easy to be way off by pressing the wrong key. So I worked with this 8th grader on estimating techniques so that if there were a huge discrepancy between the mental or pencil/paper estimate and the calculated result it would be noticed before handing in the work.

In a competitive and lucrative marketplace for textbooks I would have thought that a great book full of real-world examples would be out there, but apparently our local school system didn’t find one. I’m wondering if the way that we’re teaching math actually is the right way. Can that be true? Just tell students “this is an abstract subject and if you want to get a good job one day you need to do everything we assign”?

Related:

Philip Greenspun’s Weblog

Maui tourism tips

If you want to spend most of your time on a hotel’s beach or at a hotel’s pool, I recommend the Wailea area rather than Kaanapali, which is more crowded and less relaxing, though better for long walks on an actual beach. The price differences are negligible. The Four Seasons Wailea is considered the best hotel on the island by experienced Maui tourists and if you factor in the square footage of the rooms and the lack of a “resort fee” tacked on, the price may actually be less than what other hotels charge. If you book through WhataHotel.com you’ll get a free room upgrade and an included buffet breakfast (about $ 100 for two people otherwise).

[We learned that the hotel bar is at its liveliest on Monday and Tuesday nights and that local women enjoy coming there to meet visitors, a mixture of corporate convention attendees and folks willing to pay $ 800 per night from their own pockets. We asked why locals would bother driving down from Lahaina, considering that Hawaii has a surplus of single men and is 9/50 when states are ranked by male:female ratio. “Women say that there are plenty of guys, but they want someone with more ambition and a better career,” was the answer. (What happens if the bar encounter turns into a pregnancy? About $ 72,000 per year in tax-free cash under Hawaii’s child support guidelines.)]

If you want to be on the go, I suggest staying in an off-the-beach hotel or condo near downtown Lahaina. If you can walk down to the marina there you’ll never be bored. You can use the money that you saved from not staying in a resort to take a submarine ride, a day trip to Lanai, a snorkel trip to Molokini, a whale watch, etc. You can enjoy the crazy huge banyan tree every day (planted only in 1873; one look at this tree and you’ll realize what awesome job security a landscaper has in Hawaii).

Staying in Wailea and want to snorkel around Molokini? Go through the surf to get on the Kai Kanani. Their sunrise trip is usually nearly empty so you can wait for a morning when the wind and waves seem light and then drive directly to the boat to hop on at 6:15 am. The nearest competitors will require you to drive in a car for about 30 minutes and then drive back down to where you started in the boat for about 30 minutes.

All of the helicopter tour operators are in a row at the main airport (follow signs for “heliport”) so maybe stop in and pick a tour after you get your rental car. I suggest going as early in the morning as possible and on a day when the winds are forecast to be calm. Wind+mountains = turbulence. It won’t be unsafe but it might be uncomfortable. Even if I weren’t a helicopter nerd I would suggest a helicopter as the best way to see Hawaii. A lot of the most beautiful areas are inaccessible by road.

Every local’s favorite burger joint: Cool Cat Cafe in Lahaina.

If you need to cover a wall with a tropical flower painting: Anna Keay.

If you love old maps and high-quality reproductions of old maps: Printsellers in Lahaina.

Note that Maui is not immune to the “vog” pollution coming out of the volcano on the Big Island. If you insist on blue skies and clean air, check the volcano activity level and consider booking on Kauai or Oahu instead.

Philip Greenspun’s Weblog

Kona tourism tips

Don’t expect Caribbean-style clear blue skies when you’re next to an active volcano. For my entire six-night stay the air was hazy and tinged with brown and people had slightly irritated throats from the vog. My host noted that there was an organic farm right next to the volcano: “do they wash out the sulphur and bits of glass that come out of the volcano before they sell you your organic lettuce?” A woman who has lived here for a few years said that she always woke up with a metallic taste in her mouth (as did I) while her husband, a longer-term resident, said that he was immune to the vog.

The smoothest coffee that we found was pre-ground medium roast from Kona Cafe, available at Long’s Drug.

Best tourist experiences:

  • looking at the flowing red lava in the crater after sunset from the Jaggar Museum
  • morning snorkel trip to Kealakekua Bay on the Fair Wind. We saw the following from the boat: manta ray, humpback whales, spinner dolphins. We saw the following while in the water: moray eels, shark, lots of great fish. The ride was smooth despite 25-foot waves pounding the Hilo side. I would recommend doing the morning cruise due to the fact that winds can pick up in the afternoon. Very friendly and helpful staff. They provide breakfast and lunch, but it is heavily Costco-based.
  • Taishoji Taiko performing at the Waimea cherry blossom festival (early February each year)
  • malasadas at the Punalu’u Bakery.
  • K?lauea Iki Trail in the national park

And of course don’t forget to take a flying lesson at Mauna Loa Helicopters!

Maybe skip:

  • Four Seasons Hualalai. Somewhat boring landscaping (my hosts’ condo complex had a lot more color). The beach is nowhere near as nice as the Mauna Kea‘s (the local architects said that the Mauna Kea is their favorite hotel in terms of design). The restaurant had a beautiful waterfront location and great service but some weak spots, e.g., you have to ask for bread to go with your $ 30 salad. Then it takes forever to show up because it is purportedly “cooked to order.” Then when it does show up your friend says “this is like day-old pita.” Then you get the bill and find that you were charged $ 5 for the day-old pita. The bread at Volcano House was 50X better, arrived without being requested, and did not show up on the bill. (We did enjoy dinner at the Volcano House!)
  • the local wine. We opened a bottle of Volcano Red that was fizzy. We brought a sparkling Maui pineapple wine to a dinner party. Taste summary: like mixing Super Unleaded with pineapple juice plus a splash of Drano.

Related:

Philip Greenspun’s Weblog

Tips Tactics and Trades for Intraday Reversals Webinar Thursday

We’re looking forward to another informational, interactive webinar this Thursday October 20th!

Tips, Tactics, and Trades:  Trend Reversals in 2016” at 4:30 EST / 1:30 PST.

In just over an hour, we’ll cover how to recognize an Intraday Trend Reversal in stocks, ETFs, and especially index futures before other traders catch on – giving YOU the advantage in your trades.

We’ll talk indicators, moving averages, volume, momentum, internals and other factors you can use for clues.

Attendees of this event with learn:

  • Corey’s “Kick-Off” concept
  • Specific indicators you can use
  • Which moving average combinations to use for better accuracy
  • Specific trade set-ups that can get you on the right side of a rapid market movement

Don’t get caught on the wrong side of a trend day! I’ll gladly answer your trend questions live using multiple real-world examples.

Join us! It’s free, there’s no sales – just actionable education you can start using now.

Thanks to Big Mike Trading and Futures.io for making this possible to the trading community!

Corey


Afraid to Trade.com Blog

Tips for getting into a Waldorf-style school

“The ‘Kidbutz’ of Topanga Canyon” (nytimes) is a story about what happens to children of separated biological parents when unrelated adults try to combine themselves into an ad hoc extended family unit. The story contains a tidbit on how to get a child into a private school:

Ms. Evanguelidi and Ms. Welch recently registered as domestic partners on Eli’s kindergarten application to increase his chances at getting into Juno’s Waldorf-inspired school. “It’s not a lie!” Ms. Welch said. “We are domestic partners. We have been for the last four years.”

(The article makes clear that the two women do not have a sexual relationship.)

Philip Greenspun’s Weblog

Join Me Thursday for a Special “Ten Tips for Trading Trend Days” Live Webinar!

I’m very excited about a special upcoming opportunity with Trader Kingdom where I’ll collect my experiences and examples and share those with you in a live educational webinar entitled “Ten Tips for Trading Trend Days.”

Pardon the purposeful alliteration but you’ll learn valuable tips and tactics for trading my favorite type of intraday environment – one that trips up so many new traders.

We’ll kick it off Thursday at 3:30 CST!

I’m also thankful to be the featured expert at Trader Kingdom for the month of May!

We’ll focus on indicators (which to emphasize and which to remove from your charts), set-ups, and strategies for recognizing and – more importantly – profiting efficiently from these powerful events.

They happen in stocks, ETFs, futures – anything that can trend can develop a trend day.

The information is free and I use these strategies whenever the market throws a Trend Day our way.

Join us live to learn how you can benefit right away from learning these time-tested, simple strategies.

Thanks to the team at Trader Kingdom and Ninja Trader for their ongoing commitment to trader education.

Corey


Afraid to Trade.com Blog

The Son Also Rises: Tips for Optimizing Your Life

Unlike most books on Big Picture economics, which might be interesting to the average person but useful only to legislators and central bankers, The Son Also Rises: Surnames and the History of Social Mobility has important life lessons for most people.

As noted in my previous posting regarding this book, Clark says that we middle-aged folks shouldn’t infer too much from the age at which our parents die. If they die young we shouldn’t spend like drug dealers and save only enough for a burial plot. If they are healthy 90-somethings we shouldn’t be saving intensively because we can in fact plan to live only three additional years beyond our conditional-only-on-our-own-age life expectancy.

What about parenting? I ran into a friend the other day at Trader Joe’s. She and her husband live in Cambridge and send their kids to an elite private elementary school so that they won’t end up in Massachusetts’s most expensively funded public school system (in which I was a volunteer tutor, an experience that I describe as “I taught third grade math… to 11th graders”). Another parent at the school asked her if she was taking the children to after-school math and music programs. She replied that she was just letting them play at home with the golden retrievers and the other parent said “So you’ve given up on them getting into Ivy League colleges.” The Son Also Rises would have been useful in this situation, with a complete chapter on “Escaping Downward Mobility.” Here are some excerpts:

For a long period, from at least 1880 to 1980, the rich and socially successful sharply limited their fertility. Their fewer children would thus each inherit more parental assets and gain a larger share of parental time and resources, than the abundant children of the poor. Yet despite a willingness to spend big in terms of time and treasure, we know that the law of social mobility exercised an inexorable pull , drawing families toward the mean.

There is strong persistence of status, but those at the top of the social hierarchy in societies such as the United Kingdom , the United States, and Sweden will inevitably see their children, on average, move down. Further, the rate of regression downward to the mean is the same for the upper echelons of society, despite their considerable investments in their children, as is the rate of upward mobility for the lower echelons, even the ones who don’t bother to turn up for the PTA meetings.

The empirical evidence that middle- and upper-class parents can significantly boost their children’s human capital and economic outcomes through expenditure on children is weak, …

This is all consistent with the idea that once parental inputs to children reach a certain basic level, which does not include Baby Einstein toys, playing Mozart to babies in the womb, or sending them to the Dalton School, parents can do nothing to improve outcomes for children. Beyond this point, social outcomes are potentially all in the genes, determined at the point of conception … [emphasis added]

In Selfish Reasons to Have More Kids, Caplan points out correctly that upper-class parents pointlessly invest too much time in the rearing of their children. In his view, genetics is what matters, so you might as well have more children, invest less in each, and enjoy being a parent more.

Or she could have just rammed the other mom with her SUV…

Should you try to work extra hard to make more money because it will help your children? Clark cites the studies of adopted children whose future income was not influenced by parental income (i.e., growing up in a McMansion because your parents enjoyed sufficient cashflow does not make you more likely to have enough income to afford a McMansion). Clark also looks at a study of the children of winners of an 1832 land lottery in the state of Georgia. Each parcel of land was worth as much as the median wealth in Georgia circa 1850, equivalent to roughly $ 150,000 today. How did the children of the winners do?

They were no more literate than the children of losers. Their occupational status was no higher. Their own children in 1880 (the grandchildren of the 1832 winners) were again no more literate. Worse, they were significantly less likely to be enrolled in school than the grandchildren of the losers. … Wealth is not statistically higher for lottery winners’ children…

Clark also reviews a study of Cherokee Indians who, starting in 1998, received substantial boosts to their income from casino profits. For children who had not been living in poverty, “there was no measurable change in any educational outcomes, including high school graduation rates…” This was despite the fact that a child who graduated high school would immediately become eligible for his or her own $ 4,000-per-year payment.

The same chapter in The Son Also Rises summarizes a study of a Norwegian county that became wealthier as a result of an oil boom compared to other Norwegian children: “The income gains in Rogaland had no effect on the years of education achieved by children there.”

[Note that the these studies may explain an apparent paradox that we uncovered in interviewing divorce litigators nationwide. They told us that the more child support that a child was yielding for a plaintiff, the worse the child turned out as a young adult. Due to the never-final nature of custody and child support litigation, attorneys inadvertently followed children longitudinally to age 18 or 23, depending on the state. None of the children were in poverty because at least one parent had enough income to be worth suing. Children in jurisdictions where the maximum child support obtainable was reasonably close to the cost of adding a child to a home (about $ 4300 per year, according to UCLA prof Bill Comanor) did better than children in jurisdictions where the winner parent could live very comfortably off the child. Example maxima for a single child are $ 4,000 per year (Sweden), $ 8,000 per year (Denmark), $ 13,000 per year (Nevada), $ 20-25,000 per year (Minnesota, Texas, North Dakota), $ 71,000 per year (Utah), $ infinity (California, Massachusetts, Wisconsin). Foreign readers: in the U.S. there is no requirement or expectation that child support dollars received by a parent be spent on the child; since the early 1990s by federal law the child of a one-night encounter will yield the same revenue as a child of a marriage.]

What if you’re not married yet? Backed up with a lot of charts and data Clark says the same thing that an Indian or Chinese grandmother would say: “look at the whole family”. Did you just meet someone who is smart and successful? Clark gives you the green light if their parents, grandparents, aunts, uncles, et al., are also smart and successful. If the relatives are “low status,” however, the person you just met likely was simply lucky and your mutual children cannot count on that luck. Here’s a more thorough explanation:

Is there anything that this book can say to people who want the best possible income, wealth, education, and health outcomes for their children? The one scientific contribution we can make is to point out that with the appropriate choice of mates, a family can avoid downward mobility forever. The chapters above emphasize that one of the things that slows social mobility is the assortative nature of marriage. People in all societies tend to marry others of similar social status.

But no matter how assortative mating may become, downward mobility will continue. For downward mobility is driven by the fact that people typically select mates who resemble them on the basis of observed social characteristics— their achieved education, income, occupational status, wealth, height, weight, and health. 8 This is their social phenotype, the sum of their observed characteristics. However, as we have seen above, we can usefully think of individuals as also having a social genotype, or underlying social status.  Their social genotype produces the observed phenotype, but with random components in each dimension. This means that the people currently occupying the upper tails of the distribution of education, wealth, and occupational prestige tend to include disproportionately the lucky, the ones who benefited from happy accidents. Systematically, at the top, the phenotype is better than the genotype. Symmetrically, concentrated at the bottom are people who have experienced bad luck and unhappy accidents. There, the social genotype is much better than the observed phenotype. The curse of the elite is that they are surrounded by imposters, possibly including themselves , and thus the marriage market for the upper classes is full of prospects likely to underperform as carriers of a lineage. In contrast, the bottom of the marriage market is full of potential overperformers. Bad luck dominates, rather than bad social genotypes. So outcomes for the next generation tend to be better.

If the way to produce children of the highest possible social phenotype is to find a partner of the highest possible social genotype, the path is clear for those whose aim in life is to produce the highest-achieving progeny possible. To discover the likely underlying social genotype of your potential partner, you need to observe not just their characteristics but also the characteristics of all their relatives. What is the social phenotype of their siblings and their parents? And what is the observed status of their grandparents and cousins? The point here is not that any of these relatives will contribute anything directly to the social and economic success of your child. As far as can be observed, they will not. But the social status of the relatives indicates the likely underlying social status of your potential mate. This social genotype, rather than the observed social phenotype, is what your children will inherit. …

a recent study in Japan examined the effects of the educational attainment of grandparents, aunts, and uncles on both sides of a family on children’s probability of going to university. Controlling for the parents’ education, there was a positive correlation between the education level of all four sets of relatives and the child’s probability of attending university.

Clark, writing from Davis, California rather than Los Angeles or San Francisco, did not reflect on the fact that marriage is not a prerequisite for reproduction, that seeking a mate via marriage is genetically irrational, and that, in most U.S. states, having children in a stable marriage is economically irrational. As explained below, a higher status mate can typically be found for a one-night encounter than for a marriage and, holding the number of children constant, state law makes tapping the income of multiple reproductive partners more lucrative than tapping the income of just one.

Here’s an excerpt from our own book:

“Women who want to make money from the system aren’t getting married anymore,” said one lawyer. “The key is recognizing that it is a lot easier to rent a rich guy for one night, especially if he has had a few drinks, than it is to get a rich guy to agree to marriage.” Another disadvantage of marriage, from a plaintiff’s perspective, is that it prevents what attorneys call “forum shopping.” A plaintiff who is married in Texas is stuck with Texas law and $ 20,000 per year in child support for a single child. A plaintiff who isn’t married and who has a good understanding of the Uniform Interstate Family Support Act (UIFSA) may be able to sue a Texas defendant under California, Massachusetts, New York, or Wisconsin law and collect millions of dollars. [A factor for jurisdiction under UIFSA is “the nonresident engaged in sexual intercourse in the state and ‘the child may have been conceived by that act of intercourse’,” which can make a weekend trip to Boston or Los Angeles pay substantial long-term dividends.]

Suppose that a woman is one of the “people who want the best possible income, wealth, education, and health outcomes for their children” about whom Clark writes. What the attorney above says regarding “rich guy” would apply equally to “high status man from family with high social competence.” Clark talks about “the assortative nature of marriage” in which a high-status man would only be willing to marry a high status woman. But the attorneys interviewed say that these assortative rules don’t apply to brief encounters. Here’s a Massachusetts attorney quoted in our book:

“There are a lot of women collecting child support from more than one man,” Nissenbaum noted. “I remember one enterprising young lady who worked as a waitress at Boston’s Logan airport.  She targeted three airline pilots, had a child by each of them, and back then [1980s] was collecting $ 25,000 in tax-free child support from each pilot.”

Informed by Clark’s book, a young woman today could get a job in or near a hospital and, after making what seemed like small talk regarding family background (“Are your parents also doctors?”; “What do your grandparents do back in the old country?”), identify fathers for her future children. Nearly every state makes it more profitable to have children with multiple co-parents, so she will want to have just one child with each man. For example, at the top of the Massachusetts guidelines, which cover up to $ 250,000 in parental income, four children with one father would yield $ 58,188 (tax-free; more than the median household income for the state) for a 23-year period while four children with four different fathers would yield $ 160,576 per year in tax-free revenue (plus health insurance, day care, and other direct expenses of the child), roughly equivalent to earning $ 250,000 per year pre-tax. Using this method instead of marrying a high-school sweetheart of average status, the mother would have a superior genetic endowment for her children. Without working, she would have more spending power than any of the defendant fathers yet without investing time or money in college. [Why more spending power? She’ll have the same after-tax income as each father, but she herself is not being tapped for child support by anyone.] Her household income will be comfortably in excess of what The Son Also Rises says is sufficient to create an environment that enables children to flourish as adults.

[If the mother were to find high-status fathers earning more than $ 250,000 per year, we found that judges in Middlesex County at least would tend to extrapolate beyond the guidelines and, in the words of Judge Maureen Monks, “Maybe there is no limit” (prior to awarding a plaintiff $ 94,000 per year in child support for a single child; see “Women in Science”). So if this young lady were to reside in Cambridge and target medical specialists she could easily find herself with a tax-free income of over $ 400,000 per year.]

Attorneys also pointed out that when seeking child support profits via a brief encounter, their plaintiff clients don’t limit the search to men who are currently single. Having a child with a married man may be more lucrative than having a child with a single man. Why? When child support is discretionary, e.g., in higher-income cases, a plaintiff can ask for 100 percent of a married defendant’s income on the grounds that the defendant’s wife can support him and any marital children while he supports the plaintiff and her out-of-wedlock child. Attorneys also told us about larger-than-guidelines cash transfers that they negotiated in exchange for keeping an extramarital encounter, and the resulting child, out of the public record.

Does anyone actually target physicians? An Arkansas litigator described some of his work with medical professionals: “When I see young doctors working with attractive nurses I think that’s just like hunting in a baited field.”

Note that despite the gender-neutral nature of the laws in most states, the above optimal strategies for producing high-status offspring (and living comfortably without working) are not available to men in the U.S. Women are able to decide whether or not to carry a baby to term. Attorneys in every state except Alaska, Arizona, and Delaware (where 50/50 custody is the norm and a high-income mother would have exposure to paying the father) told us that a woman would be able to retain primary custody, and therefore the associated child support cash flow, of a child born out of wedlock.

One objection to this method of producing high-status offspring is that children of separated parents in the U.S. tend to be psychologically damaged compared to children reared in a two-parent home. However, a comprehensive Swedish study by Malin Bergstrom suggests that the damage comes not from separation but from the American system of selecting a “primary parent” and relegating the other (secondary) parent to an every-other-weekend role.  Children in Sweden who grew up in a 50/50 timeshare arrangement with separated parents were almost as healthy and happy as children in intact families. What’s the value of having high-status offspring if they aren’t happy or healthy? The necessary tweak to the above strategy is the mother persuading the fathers to take care of the children 50 percent of the time. By Massachusetts formula, as long as she doesn’t herself work, her child support revenue will not be reduced in this event. What’s the incentive for the fathers to cooperate? They must take care of the children at least 33 percent of the time or be exposed to the judge ordering them to pay more than the guideline formula amount. If they already have allocated a room in their house to the child for 33 percent of the time the extra cost of hosting the child half the time is minimal. So as long as the fathers have at least some interest in the long-term welfare of the children (email them Bergstrom’s study!) they should be agreeable to this.

What if you reject the insights of this book and decide to wing it?

But the law of mobility tells us that the rags-to-riches path is the anomaly and the exception. The elite of any generation typically come from families only modestly less elite. On average, the fabulously rich and the extravagantly talented are the offspring of the moderately rich and moderately talented. The truly poor and completely talentless are the children of the modestly poor and somewhat untalented.

Philip Greenspun’s Weblog

The Weekend Trader – Market Update, Life Tips & More Book Reviews

In today’s post, I touch on market rhythm updates, provide a few life tips (especially for those trying to lose weight!), and also take a look at some additional book feedback from industry leaders obtained by publisher John Wiley & Sons and which will appear in the soon-to-be-published work.

In our last post, Linda Raschke provided her feedback.  In today’s post and video, I touch on the following feedback from industry heavyweights Larry Connors and James Koutoulas. My thanks and gratitude to both Larry and James for their help in past years, as well as during the current publishing effort to ensure the book is of the highest quality.

I’ve had the good fortune of watching Don Miller trade profitably in front a live group of full time traders. The methods Don teaches are solid and more importantly, as you will see here in his book, they’ve been consistently successful. This book goes further than most trading books because you get to live with Don day-by-day seeing both his actual trading along with his mind frame. If you want to learn from someone who has mastered day trading, and has successfully done so for years, then this book is must reading. Highly recommended!
— Larry Connors, Founder of TradingMarkets.com, Author of “How Markets Really Work”, and Co-Author of “Street Smarts”

A true story of sacrifice, hardship and success.  Don Miller shares his story to make 1 million dollars in one year in real time, real trading records and real life.
— James L. Koutoulas, Esq., CEO, Typhon & Co-Founder of the Commodity Customer Coalition

Don Miller’s S&P Trading Tank

Join Corey for a Webinar on Two-Timeframe Trading Tips

I hope you can join us this afternoon, January 31st shortly after market close – 4:30 EST/3:30 CST – for an interactive, educational webinar.

(UPDATE:  The links below are updated to the archive presentation you can view)

I’ll be answering common trader questions and describing how exactly to combine two timeframes to assist your trading decisions.

I’ll also show common mistakes of assessing two or more timeframes (and the “paralysis by analysis” that often develops).

Sponsored by Trader Kingdom, ICE Futures, and Mirus Futures, here is the direct link to attend:

“Two-Timeframe Trading Tactics and Set-ups”

January 31, 2012 at 4:30pm EST/3:30pm CST

Here’s a broader description of the webinar:

Join Corey Rosenbloom, CMT, as he addresses these questions and outlines how traders can capitalize on opportunities created by a conflict between two timeframes.

Topics will include how to:

  • Identify structure on a higher frame and then use lower frames to pinpoint more precise entries
  • Open-trade management in the context of a higher timeframe development
  • Confirm and trigger more efficient entries into breakout set-ups, reversal opportunities, and pro-trend retracement situations

Corey will also share specific entries of trade logic building mostly from the intraday and daily timeframes that you can incorporate into the strategies you are using currently.

If you can’t attend the webinar today, you’ll be able to receive a recording shortly after the presentation by registering.

Thanks to everyone for making this possible and I’m looking forward to it!

Corey


Afraid to Trade.com Blog

10 Great Tips for Trading Covered Calls

This is a guest post by Mike Scanlin of Born To Sell.

“Covered call” investing is a popular and conservative options-based income-oriented strategy. According to a recent Wall Street Journal article, 84% of Charles Schwab option-enabled accounts trade covered calls. Because of the downside protection granted from the call premium received, they are more conservative than their nearest cousin, the buy-and-hold strategy.

However, like all investment strategies it is possible to lose money with covered calls. There are ways to reduce your risk and stack the odds in your favor. A lot of it has to do with staying away from high risk situations, but there are also positive things you want to look for.

Here are the top 10 ways to improve your covered call investing:

1. Avoid leveraged ETFs. Leveraged ETFs, which are like normal ETFs except they use 2x or 3x leverage to magnify the results compared to an unleveraged ETF, are mostly day trading instruments not designed to be held over night. Not appropriate for covered calls. You can usually identify leveraged ETFs because they have words like “ultra” or “leveraged” in their names.

2. Avoid companies with earnings release dates before option expiration. Stocks are extra volatile just before and after an earnings release date. While that volatility can make for attractive call premiums, you don’t want the underlying stock to drop 20% overnight because of bad results or poor guidance.

3. Don’t count on the FDA. When there is an FDA announcement, biotech and pharmaceutical stocks tend to get cut in half or double instantly. In either scenario, covered calls are not the best strategy to take advantage of that kind of volatility. You will rarely get enough premium to cover the downside case and if you’re going to take the risk then why put a cap on your upside?

4. Avoid thinly traded stocks. Large volume makes for small spreads. The opposite is also true: thinly traded stocks and options have large spreads. These large spreads will cost you if you need to exit your position early or make an adjustment to your position. Better to stick with highly liquid stocks, or at least avoid the illiquid ones.

5. Avoid options with low open interest. Similar to #4 above, you don’t want to be in an option series that has low open interest. If you ever need to exit early you are unlikely to get a fair price in a series with low open interest. The series should have at least 2000 contracts of open interest, but as little as 1000 is probably okay.

6. Don’t chase highest return without knowing why. It’s easy to find the top yielding covered calls but those need to be viewed with a skeptical eye. Why are those options priced so high? Is there some pending news announcement? Or is the stock a momentum play? Or a short squeeze? There’s almost always a discoverable reason for juicy premiums and you want to make sure you know what it is before getting involved. Do some research.

7. Position sizing is important. Don’t put all your eggs (or even 20% of your eggs) into a single investment. If you have a small portfolio, limit each position to no more than 10% of the portfolio value; larger portfolios should target no more than 5% in a single position. If you can’t meet those goals then consider doing covered calls on diversified ETFs which have built-in diversification.

8. Dividends before option expiration are good. If the stock is going to pay a dividend then set yourself up to receive the dividend as well as the call premium. Look for ex-dividend dates before option expiration. Be aware, though, that if there is very little time premium remaining in the option on the day before the ex-dividend date then you may be subjected to early exercise.

9. Diversify. Don’t put all your covered call trades in the same industry sector. Spread them around to different sectors to avoid too much sector concentration and correlation. And, again, if your portfolio is on the smaller side then consider broad-based ETFs as they are a basket of stocks and remove much of the single-stock and single-sector risk.

10. Be prepared to own the underlying stock. Even the best laid plans sometimes don’t work out. If you’re selling short-term in the money or deep in the money options with the expectation that they will be called away, realize that they may not be called away. You may end up owning the stock after expiration. If you’re not comfortable with owning it then choose a different stock for a covered call.

Mike Scanlin is the CEO of Born To Sell, a web site dedicated to covered call investing. He has been investing in options for over 30 years. You can read more articles from Mike on his Covered Call Blog.

Original post: 10 Great Tips for Trading Covered Calls




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