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9 Comments

  • Hi Dwight,

    I hope you are well? I’ve come across your business on the propertyinvesting.com forum and would like to learn more about your business.

    As you may know, we help thousands of clients and companies every year to transfer money overseas. In essence we offer sharper exchange rates than the high street banks and have much lower transfer fees.

    I would be keen to speak with you and discuss the potential for us to partner with you and help your clients when investing in overseas property.

    Perhaps you could advise a suitable time for me to contact you and introduce myself?

    I look forward to speaking with you soon,

    Regards

    Jon

  • Thanks Dwight for your honest account of the covered call strategy. I would like to know more detail about how much time it takes & whether you think it’s worth pursuing. Thanks again

  • Thanks Mara,

    You don’t need a lot of time buy you do need to be diligent. I haven’t been diligent so there are months where I leave my stock and don’t write a call and then it drops, so I wait for it to go up, and it doesn’t, so I wait….and then the month is over and I haven’t made any income and the stock may or may not have gone up.

    It takes some focus (No pun intended) and I’ve been too caught up in house reno. I haven’t made it work for me yet. I’m not giving up, but I’m not gong to post articles pumping it up either because I currently have no track record to back that up.

    The strategy is sound enough, limited upside, limited downside…so relatively “safe”. You cannot really “blow” your dough so to speak. It jsut takes careful management and an eye for detail.

    Cheers,

    Dwight

  • Correction Dwight, the covered call strategy has UNLIMITED downside, limited upside. Although this is never mentioned by the likes of Fokas who’s marketing pitch intimates that trading is easy.

  • Thanks James,

    yes, you are correct. If you simple write a covered call you take a small cash gain now and the share could drop to zero.
    I always buy a PUT to mitigate my losses, hence my “limited” downside. The trading is not easy, although the concept is simple. Making any momney takes discipline and sticking to a system. If you get greedy and try to maximize returns and not buy a PUT you will very likely come unstuck.

    Cheers,

    Dwight

  • Hi Dwight, the cost of the put would offset much of the income earned from writing the call in the first place.Then you have brokerage and bid/ask spreads further eroding those returns. The reality is you can only earn a return higher than the risk free rate by taking some degree of risk. There is no easy money in the stock market.

  • Yes,

    again I do agree with you James. Buy spending money on a PUT you decrease you return. I would always advise to do so and limit your possible loss. Greed can kill you if you don’t have a plan in place to limit your downside. I also agree that a covered call or “collar” strategy involves a level of risk. To gain an income worth bothering with you often have to allow a certain degree of possible loss. The strategy is simple but not actually “easy” in prtactice. It is not a money making machine by any means. I have yet to master it.
    Cheers,
    Dwight

  • Cheers Dwight. Let us know how you go.

  • Hi Dwight,
    Caught your interest in Sharelord in a browser search. I’m not a Stock Exchange Guru so my terminology may be wrong, so bear with me. I have just closed my S/Lord account after a brief and unsuccessful attempt. To put my situation in context, I was introduced to S/Lord by a couple that were full time trading and were now living almost entirely off the funds generated by their S/Lord portfolio. After meeting them, I spent almost two years talking to them, attending the seminars and learning what I could. I move slowly with stuff I don’t know a lot about! Finally I decided to do it and spent the $6,000 dollars on the training and mentorship and then the $6,000 funds for trading. I created 3 contracts over about 3 to 4 months, none of which were text book (ie “unusual” things happened such as sudden price plummet 2 days before the contract expired etc) and I ended up breaking even or losing a small amount. If you include the cost of training, then I lost 50%.
    My decision to pull out was because of two factors:
    1. I was not getting the profits that were posted by the S/Lord team. I spoke to the person who put me onto S/Lord and who had lived off it for a couple of years. He told me THEN he made his money by directly working in the US market and placing his contracts at exactly the right time, which meant staying up at night for the open of the US market and reading the rise and fall of the stock. He could get a couple of % improvement on the price which was enough to make it profitable. The profits at the time I first spoke to him were around 5 to 7%/mth. When I signed up, they were down to 2.5 to 3.5%/mth. I was sold a product that purportedly took 1 day per month or something like that, the reality was very different.
    2. I pulled my money out as I couldn’t afford to “Learn” from my mistakes at the time.
    I don’t know if S/Lord has changed. I still receive their stock suggestions and seminars on email. I believe it is a system that does work, not as simply and low-contact as they portray it, but it does work. In a booming market with profit up around 5% per contract per month, and $100k + trading account, the risks are lower, you can afford to spend your money to learn. At the time I was doing it, I believe my S/Lord mentor was honest and tried to help, it was a good service and I had a lot to learn. I don’t know what they’re like now.
    Hope this helps anyone who is looking.
    Michael

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