Posts

Establishing Terminology

I have received some feedback and words of encouragement.   Thank you! What are Calls and What are Puts? Options can be slightly complicated.   Click the link for investopedia's definition:   calls and puts .   Call Option - The way I think about it, is that if I own a call option, I have the option to buy the stock at a certain price. This specified price is called the strike price.   If you're speculating that a stock will rise in value, you can buy calls at a fraction of the stock price and sell the option when the stock price has risen.   Wow, that's great, why doesn't everyone do that versus buying stocks?   Because options have another very important component that stocks do not have: Expiration.   An option can expire worthless, and it can be a very risky endeavor to see your account go from $1000 to $0 on expiration day.   If I own a put option, I have the option to sell the stock at a certain strike price.   Th...
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How Do I Invest

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A few friends have asked me how I approach investing.  This post is the first of hopefully many to come. How I think about my Investments Investing to me is about making my money work hard while limiting the risk.  For those new to investing, it is a generally known fact that to reap the benefits of higher returns, one likely will take on higher risk to get that higher reward.  For me, I have a strong dislike for risk and I have seen the ups and downs of the market, those cycles do make me uncomfortable. I would be, what you'd call risk adverse.  But I also don't like to see my money languish in the bank, getting anywhere from 0.5% to maybe 2.0% in annual interest.  So what is the balance?  For me, I like a little bit of risk, but not too much risk, and I enjoy trading options, what should I do? Here are my goals:  1)  Don't Lose Money  This is a Warren Buffet goal that I've borrowed.  I like the simplicity of it and I fully a...
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