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by ReallyAnonymous
2073 days ago
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Options trading is all or nothing. Yes, it's a way to multiply your profits, but it also multiplies your losses. AAPL stock, from the release of the iPhone until now, has been an amazing investment. Some amateur analysts would beat the professionals in predicting quarterly reports. Then greed set in. https://fortune.com/2013/03/04/the-rise-and-fall-of-andy-zak... Just imagine if investors in his fund had just bought the stock instead of options (calls). Similar situation as above. Don't invest what you can't lose. Slow and steady and living below your means wins the race. USA tax laws favor investment income over labor income. If no wage income, first $75k of qualified dividend income is federal tax free. Most qualified dividends pay 2-4% so you need $2 million dollars to get $6k post tax dollars a month. |
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Gist of the story is that an amateur law student was amazingly good at predicting AAPL earnings every quarter. Graduated, and started his own hedge fund.
Publicly advocated buying options because AAPL could only go up bc profits were increasing. That's also what he did with investors' money. Options expired worthless. All $$ lost.
AAPL price did not follow increase in earnings in straight line.