Saturday, October 9, 2021

A shot on a bird

今天我们不谈感情, 只谈钱💰
Money money money 💸💸💸

I have been reading and watching a lot finance related article and short video. Getting to know the global economy situation and at the same time, trying to learn how to play option. 时时提升自己。

Trading option is risky and the strategy is not easy to understand. However, the basic concept of option is still self learnable and is not difficult if you have some knowledge on how to play call/put warrant. The difficult part is the strategies. 打仗,谁都会,要打赢,需要策略。

There was a saying that, if you don't invest, you get nothing. No pain no gain. If you invest in stock, unit trust, ETF or any other funds, you have the opportunity to improve your financial situation but it will not make you rich. Warrent buffet, as many people know, is famous of playing stocks; god of stock. If he only play stocks, he wouldn't be able to be as rich as what he had achieved as of today. He is indeed a master player of option too. Option after all, is good to use it as an hedging tool, a way to position your risk against your investment. 投资,要大胆一点。

Back in year 2020, January, I started with nothing (financially). When a person is on a downside of life, it will likely to bounce back higher, if that person is strong enough and have enough determination to be succeed.
This happened the same way to me and it really turn out to be a good one. I made some good results. However, as usual, without a proper discipline, failure will come. I hit a lose of about 50% of what I had gain, just few months after I completed the first successful journey. That is really a big bang on my head and I realise I lose my discipline again. 坚持,是世上最难的事。

I have then stopped playing call warrant as I realised that is not a good play during a bad market. I return to the classic stock and picked a good company. As I am naturally a high risk taker, I again, show hand on one of the stock. Some may see that it is too risky, or some may comment that we should not put all eggs in one basket. I have my own view on this. Firstly, if you are not financial freedom yet and if you do not have many commitments, I suggest that you may want to consider investing in something that can provide higher return. The risk level of course will increase but you have the opportunity to open up a door for yourself to move on to the next level. Do a proper risk management and the worst case is you lose all your money. You are not losing your life. At the same time, you will gain experience and the most important thing is you experienced failure. Failure is something that everyone cannot avoid in life. Experienced it in your early life will certainly provide you a better skill set to handle your upcoming challenges. 人生,必要时,放手一博。

It is now come close to 2 years since I re-started my investment road. I think I deserved a round of loud applause to myself, as I have up-to-date gained about 50% realised profit and if adding up also those with on-paper unrealised gain, it turn up to be about 85% profit in less than 2 years. However, the gain may not only limited to monetarily, I have also learned a lot in terms of handling life during hard times, especially on focusing and disciplined. Life is meant to be a learning session. 学无止境。

On this day, I have started to invest in Dow Jones. I am not starting big as investment always come with patient. Success will not be happended in a day. Starting with small amount, invest, learn, and grow along the way. Option is the next on my agenda. Let see if I am able to grow this fund size. Patient is the key. 你可以按耐不住地去喜欢一个人,但不能再投资上按耐不住。

My intension of this article is to give a summary of what you should be prepared before you start playing option.
1) understand the basic of option, on how it works. This includes calculation on premium, breakeven price, delta, theta, etc.
2) identify the stock you want to open the option position. Pick a stock that has many transactions. This will avoid you fall into a situation that you not able to sell the option and forced to pick up the execution.
3) be prepared to lose all. You need to have the ability to accept failure. If you can't do that, you are already emotionally failed to be succeed.

I am writing this not to encourage reader to start investing, but to make you understand what you really need in your financial life. If you are happy to live with the existing income, then don't risk anything and continue to stay as it is. Personally, I am investing not purely just after money. Money of course is one portion of life that you need to provide you with a better living condition. The bigger part of me investing is to proof to myself, I am capable to be successful. I am keen to help more people in the world and wish everyone has an equal opportunity to live happily on this lovely earth. 每个人都应该平等滴。

I see a white bird on a blue sky, flying higher and higher. 蓝蓝的天空,有只小白鸟。
Are you ready to fly me to the moon?

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