1. www.appod.com David Hsiao蕭正則
Master in Math/Computer Science from Minnesota State University
Mainframe System Programming
Micro computer, Client-Server, Web Application
Microsoft Certified Solution Developer(MCSD)

2. Show Me The Money
Time, People, Money
We will focus on Money

3. What is takes to make 1 Million
You need one million, not really!
Rule of 72

4. Top 1%
$424,413(income)
$380,354(19% of top 1% is from wage)
$343,927(19% drop from 2007)
Paid 27.6% Federal tax
Own half of country’s stocks, bonds, mutual funds

5. Investment Like(If I don’t see or Don’t know then it does not happen)

6. It happens to People(Bank, Mutual Fund, annuity,fee,Paper lost,Tax liability no control, etc)

7. Most Stock Trading Strategy(Masses)
Buy Low sell High
Buy and Hold
Buy more when lower
Chapter 11 !!(Don’t buy)

8. Trading Strategy($100 challenge)
Risk Management – 10-70%
Profitability – 1-4%+ Per week
Simplicity – Easy to understand and execute
Consistency – Time, frequency

9. The winning strategy Stock Movement(up, neutral, down)
Time(Option)-Own right(Long), Owe Right(Short)
Leverage(Option)-10-50% at risk
KISS(Keep It Simple and Stupid)
Insurance(use option)- Net cost is always lower than current price
. Make it->Master it-> Matter it

10. Dividend X-Dividend Date(Buy before X-D to get Div)
Sell Put or Call can benefit from it
Relates to Option
Hold Call position and exercised right before X-divididend date, you have to pay the dividend!!
Qualify for dividend if have ownership the day before X-Dividend Date

11. Major Exchange NYSE - 3112 AMEX - 1614 NASDAQ – 2553
7279(some ETFs, stock only about 6700)
ETF(optionable), Mutual Fund(end of day trade)
Option – 1876 symbols(include about 100 ETFs, etc), (Year)
400,000+ records(Put and Call)
Watch out for non-standard option(ns)
Data-> Information -> Opportunities

12. Stock, Option Count Exchange callorput Count OptionCount
Symbol WIthOptionCount
SymbolInExhange
AMEX C
1,510
NasDaq
50,541
NYSE
83,482
135,533
1782
3241
54.98% P
2,034 91
486
18.72%
54,359
1429
2716
52.61%
82,490
138,883
274,416
3302
6443
407
(Symbol Not in Exhange)

13. How to Profit Data(Data Mining) Information Opportunities(Aanlysis)
Proper Execution
$$$

14. Day Trade What is a day trade/round trip?
A day trade occurs when you buy and sell (or sell and buy) the same stock or option position during the same trading day. A trading day includes all pre-market, normal trading hours, and extended session hours. Selling a position held overnight and reacquiring the position the following day is not considered a day trade.
FINRA provides that a pattern day trader is any account that executes four or more round-trip day trades within any rolling five-business-day period, provided the number of day trades represents at least 6% of the total trading activity during the same five-business-day period.
If you are flagged as a pattern day trader, you'll be subject to restrictions, including a minimum equity of $25,000 at the start of any day in which day trading occurs. Pattern day-trader accounts that fall below the $25,000 minimum equity requirement and day trading will be restricted to closing transactions only for 90 days, or until the equity is brought up to $25,000.

15. Why Option(Spread) Protection – small investment, large position
Leverage – own more than you can afford.
Profit – it means more profit or more protection
Retirement Account- settlement date, limited margin account, can not use incoming money!
. Not enough cash to buy 100 shares of stock
Brokerage firm does make error, unnecessary alert, can not clear box, can not exercise LEAP(Paired),.

16. Sell Put or Call(From Seller’s point)
Put – Good when stock is Up
Call – Good when stock is Down
Risk?
Leverage?
More Profit: Close positions right before Expiration Date(if your options will be exercised). Keep enough cash so that you can buy back the sell position!

17. Option Strike Price – Buy or Sell at price
Bid(Premium) – Price buyer is willing to pay(low)
Ask – Price Seller is willing to pay(high)
(From buyer’s point of view)
Call – benefit only when stock is up
Put – benefit only when stock is down
Expiration Date- When contract is not valid
100 shares- 1 contract
Non-Standard ***
Pay more when the trend is the same intention as the buyer(pay more or less for the premium)

18. Cover Call Option Simplest one
Good for people with company’s stock option
Good for stock with dividend
Good to get stream of income
Need to buy at least 100 shares

19. Vertical Spread On Call(Diagonal Spread)
Good leverage
Preserve Cash
Risk management
Bullish on market
Average return 2%+ a month
Buy LEAP(Long) Call and Sell short Call
Sell price is higher than Buy price
The Middle person(Right hand in Left Hand out)

20. Advantage of Using LEAPs
Less costly than purchasing stock; remaining cash can be used to generate additional cash
A declining stock will have time to recover
Low time value of deep I-T-M LEAPS make option ownership similar to stock ownership where intrinsic value changes dollar-for-dollar
DisAdv: No divident, hard to sell(Close) LEAP call

21. Why VS On Cal And Put Conflict of Interest Stock does not change much
Generate Income instead of idling the money(keep in cash position)

22. Basic(Why VS on Put) Weekly premium*4 usually is higher than monthly
Easier to find good news or bad news?
Stock react strongly to bad news than good news
More profit to bet on down than up
Stock can go down to 0 but has a limit to go up
Good News can go down, bad news always down
(WD- good revenue, profit but future in doubt)

23. Vertical Spread on Put Good leverage Preserve Cash Risk management
Bear market or stock
Average return 1-2% a week
Buy LEAP(Long) Put and Sell short Put
Sell price is higher than Buy price

24. Why Vertical Spread
Protection – On Put, LEAP is protection, the lower the better
Leverage – The LEAP can cover the short. No need to keep cash in case ..
You can get more shares(2-10x) than your cash can afford. So little profit is feasible trade

25. Vertical Spread Call Example

26. Vertical Spread Put Example 1
Close before expired:$30.2-$ $2.12=$1.62($1.62/$25.7=6.3%)
$ $ $ $ =$
$ /$ =6.1%
Exercised:$80-$55-$25.7+$2.12= $1.42($1.42/$25.7=5.525%)

27. VS Put Example 2