There are two kinds of options: call and put:
 

l          A call option gives the buyer the right, but not the obligation, to buy the underlying instrument to the seller of the option at a definite price within a specified period of time.  Calls are purchased by those who think the underlying instrument may go up in price.

l          A put option gives the buyer the right, but not the obligation, to sell the underlying instrument to the seller of the option at a definite price within a specified period of time.  Puts are purchased by those who think the underlying instrument may go down in price.

Just like you can go long (buy) or short (sell) the underlying instrument, you can go long or short options. Options can be complex because we have four choices.  See the “Potential Underlying Position” table below. 

Table 1: Potential Underlying Position

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Summer is almost over and excitment is about to begin, the Lucky Speculator will start its first trade on the first trading day in Sep, the 9/4!

To start and to begin with, I will trade some high risk stock options on 9/4.  Why options?  The idea here is leverage!  I don't need to pay full share price to gain control of the stock, beside with only 25K, the shares I can buy with full price is very limited.  So instead, I can control the share by buying the right to buy or sell them.  Anyway, if you don't know what stock options are, don't worry, my next blog will be titled "Options 101: What is option?".  Make sure you come back and read it before 9/4 so you can follow what I am doing. 

Fow now: some of my speculative picks are:

• Symbols: PLA Options Chain: http://finance.yahoo.com/q/op?s=PLA
• Symbols: MNKD Options Chain: http://finance.yahoo.com/q/op?s=MNKD
• Symbols: NFLD Options Chain: http://finance.yahoo.com/q/op?s=NFLD
• Symbols: CIEN Options Chain: http://finance.yahoo.com/q/op?s=CIEN

Some info on Playboy Enterprise Inc. (PLA)  We all know what it is right?   The company was founded in 1953 and the HQ is located in Chicago, IL.  Playboy Enterprise Inc. and its subsidiaries, operates as a multimedia entertainment company and the company is expanding it's online, international businesses, licensing, along stabiling its domestic tv operations.  Most recently completed 2nd qtr served as evidence of the succes of the expanding effort.  Mgmt is actively controlling costs, the higher quarterly earning registered by the Entertainment segment reflected the $4.3 million cost saving.  I will pick the option, set the target, stop-loss on Monday.

MNKD and NFLD are bio-tech companies and have one product line which has not yet pass FDA phase III trial.  Google the company to read more about them...

CIEN is a Hanover based company that specilize in researching and making fiber-optical cables technology.  Do you have FiOS?  If not, do you want to get it?  

That's it for now.  Stay tune!

know yourself, know your purpose.

The key here is to understand my own psyche and know why I want to be a trader.

I want to be a trader because:

1. I am a risk taker and I love the excitement!
2. Trading is something that I haven’t really been doing well at it and is something that I really want to be good at it.
3. I want to achieve the total financial freedom (thru trading and/or thru the building of www.LuckySpeculator.com?) 

My objectives are:

• My main and primary objective in wanting to be a trader is to learn all the things I need to learn to become a good trader, write down the experience of trying to be a pro to build the content for www.LuckySpeculator.com.  Then share all the content with everyone who is interested to be a good trader.
• My second objective is to turn the $25K into a million.

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I thought putting together a trading plan would be an easy job but I was so wrong!  After all the readings I have done surrounding the subject in the past few days, I soon realize that creating a trading plan is not a trivial task! 

For anyone who is serious of becoming a professional trader or even just a good one, then a good trading plan is a must have.

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So I continue on my quest searching for good reading materials to help me to create a good trading plan for the LuckySpeculator.com project.  And in the process of doing so, I came across the following quote that I would like to share...

“Luck is what happens when preparation meets opportunity.” - Seneca

“I feel that luck is preparation meeting opportunity.” - Oprah Winfrey

then these two quotes reminded me the movie Titanic and what Caledon Hockley character said in the movie: "a real man makes his own luck" or something like that.

Well, I guess all of the above can help to explain why I feel lucky all the time...  First of all, what can I say... I am a real man! :) and second and utmost important, I am always prepared!  :)

There is an old saying in business: "Fail to plan and you plan to fail."! 

So I took a one-day options trading class few weeks back and one of the thing we did in the class was the option trading simulation.  Before the simulation, the class did an example trade and knowing me; I went all out and max my allowed trading limit and at the end of it, when I expected to win the most, I lost!  

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"It is generally agreed that casinos should, in the public interest, be inaccessible and expensive. And perhaps the same is true of stock exchanges." - John Maynard Keynes

What is the difference between gambling and trading?  Quiet a question, isn't it?  So, on my quest to find answer, I an IT geek, of course googled it on the web and the results are somewhat interesting!  Here are some of the results:

Stock Picks 101- The Difference Between Trading and Gambling

http://ezinearticles.com/?Stock-Picks-101--The-Difference-Between-Trading-and-Gambling&id=523858

 

Summary: The “Stock Picks 101- The Difference Between Trading and Gambling” article basically points out the major difference between traders and gamblers is that traders have more clearly defined risk management.  And unlike traders usually evaluates the worst case scenario and the worst case risk in a situation, gamblers seem to be far focused on the reward totally ignore the risk that they might lose it all. 

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New Plan!

I have been doing some thinking since my last post... instead of just blew away $25,000 in the market before many people knew about this little trading project and LuckySpeculator.com just died shortly after... I decided to divide this project up into 3 phases in hope to get bigger audience to know about this project before the real exciting part begin so that the LuckySpeculator.com can live long after the trading project ended...

So, the 3 phases are:

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As in the movie 300, the beautiful Queen says to the King Leonadies before he headed to the war against Persian: "come home victory or come home on a shield"… well, that is exactly what I am going to do with this project even thought my queen didn’t exactly tell me what Leonadies’ wife said to him, especially when I told her that I will be taking $25,000 to the market and possibly lose them all… but at last and for once, I did put my family pants on and is taking the money to the market!   

So, what’s the exit strategy of this project or what’s the end goal for this project?  Well, the exit strategy or the end goal of this project would be either I made the one million from the initial capital or lost all of the initial capital.  That’s right!  ALL OR NOTHING BABY!  And THAT is the exit strategy of this game!

No hedging!  Only all out speculating!

So, friends are asking me when I will start my first trade as a lucky speculator, I guess they just can’t wait to see how I lose my $25,000 J

Well, be patient my friends, LuckySpeculator.com is not really ready yet.  For one, I think I might need to put up some kind of disclaimer to make sure I am not legally exposed...  so I googled for some disclaimer and below are some of what I found, make sure you read them before you start reading my blog:

1. Disclaimer 1: This is not investment advice. Do your own homework before investing in anything.
2. DISCLAIMER 2: The contents of this blog shall not be construed as giving rise to liability of any kind whatsoever (in particular but not limited to tort and contract). Neither the authors of this blog nor LuckySpeculator.com shall be liable for any damage sustained, suffered or experienced by anyone for anything related to anything in or omitted from LuckySpeculator.com or links to or from it. The venue for resolution of any dispute related to this blog shall be the planet Uranus and the laws applicable, both procedural and substantive, shall be the laws of the planet Uranus  
3. Disclaimer 3: This is not investment advice. It is merely what one knows nothing is irresponsibly doing with his own money.
4. Disclaimer 4: Trading stocks involves risk; this information should not be viewed as trading recommendations. The blog articles and charts provided here are not meant for investment purposes and only serve as technical example.

Here are some text I stole from fool.com and modified for my blog, LuckySpeculator.com:

The LuckySpeculator.com does not guarantee the veracity, reliability or completeness of any information provided on LuckySpeculator.com or in any hyperlink appearing on our site. No one could read through the thousands of messages/comments I receive each day, check out all the hyperlinked web sites, and research each one for accuracy. That isn't why I’m here. Nor am I here to give you hot "tips," to make "buy" or "sell" recommendations, or to tell you what to do with your money. I’m here to share my personal investment and finance decisions only, and to have fun.

You are responsible for your own investment decisions. The LuckySpeculator.com will not be responsible for any errors or omissions in articles or postings, for hyperlinks embedded in messages, or for any results obtained from the use of such information. The LuckySpeculator.com will not be liable for any loss or damage caused by a reader's reliance on information obtained in our area, or in a hyperlinked area. If you don't accept this responsibility for yourself, then you should not use The LuckySpeculator.com.

If you ignore my advice to do independent research of industries, companies, and stocks, choosing instead to trade solely on information, "tips," or opinions found in this blog, you have made a conscious, willing, free, and personal decision to do so. You have also probably made a mistake.

As cyberspace develops, the freedom and openness from which we all profit can make us the target of touts, hypesters, and frauds. These people could infect my blog, just as they infect other parts of the world. Please proceed with caution and do your homework. And remember: when you access one of these hyperlinked web sites, you're leaving my area so be wary of those who post hyperlinks to strange web sites.

 

YEAH!!!

After 4 hours of hard work, LuckySpeculator.com is now finally online.  So, what is LuckySpeculator.com?  Well, it's a blog site I created for myself to write about my daily trading activities!  Should be fun :-) 

As a Lucky Speculator, I will start up this blog project with $25,000 USD and log every trades I make from now on, the decision and reasons behind the trade and share my own market view, etc...  So you can see every step I take on my way to become a millionaire. :-D