To The Moon

Trading options may be a good choice if you're expecting investment returns beyond stocks, funds and bonds.

We have invited three Tiger friends to share the charm of options with you! Welcome @Bonta、@Wayneqq、@Michane

@Bonta

Hi, Bonta here. I am currently in my early 40s and is working in construction industry in a senior management role in Singapore.

T: Does your nickname mean anything special to you?

My nickname is actually derived from an anime series “Full Metal Panic Fumoffu”.Bonta-kun which is also my current display pic is the mascot for the series.He can only communicate by saying “Fumo” or “Fumoffu”.Hence, no one can understand what he is saying.

Unfortunately, this feels exactly like what I am saying when I discuss about options with my friends. They do not really understand what are options no matter how hard I explain or illustrate. Hence, you will notice that I do try my best to explain about options in layman terms.

T: How did you become interested in investing?

Back in 2007, when I was doing internship.The seniors who were in 50s then, gave me the advice that we can’t depend solely on working income to retire.

The sharing had a great impact on me then.Fortunately or unfortunately, I came across an advertisement on options investing that can make you become a millionaire quickly, promising super scaled returns.Being young and gullible, I attended the introduction course, paid money for the beginner course.The course emphasized on buying options to bet on direction and to improve the success rates through technical analysis and charting.However, the more it continued, no matter how closely I kept to the strategies and the trades that were shared, losses continued to mount until eventually my account was wiped out.

During that time, I finally realized that I had been on the wrong track. The lesson was painful.I decided to do my own research and reading up and not to depend on others for “Advice” or “confirm 100% sure win strategy”.I spent most of my time in the library, Borders and Kinokuniya then, and went through the available books that I could get my hands on.

T: Why return to the options market?Have you considered the value investing system?

Warren Buffet struck me the hardest on his investment philosophy and approach.This time round, I only buy dividend stocks that are undervalued. The approach worked, I started to accumulate a sizeable portfolio through monthly DCA of at least 30% of my salary and my bonus. Dividends cushioned my portfolio during crashes, and as the shares are undervalued, capital appreciation happened over time. This portfolio formed the foundation of my investment and I had built it up over the duration of 10 years, always buying but seldom selling. I loved the passive nature of the dividends that kept on coming in.

Then COVID-19 came along. I caught COVID-19, during that time I realized that if something happened to me, my dividend portfolio is still not sufficient to replace me to provide for my family’s expenditure. I couldn’t afford to wait for my portfolio and dividends to slowly grow.

During that time, my best friend was asking me about options. He knew that I had the knowledge, and asked if I could guide him. He told me options commissions had already dropped significantly, I restarted my options account.

T: Why do you choose Tiger?

During last year, there is a concern amongst Alibaba investors.What if Alibaba becomes delisted in USA.$Alibaba(BABA)$

I decided to do my own research on the what if scenario.In the event of delisting, $BABA will either become OTC or will get converted to $9988 in Hong Kong.My broker then does not have Hong Kong Shares, as such, if the delisting took place, I would have to do a transfer to another broker with Hong Kong Shares.I started to look around for solutions that can solve this issue.

I was looking for a broker that can trade USA options, and also have access to Hong Kong Shares.I realized through my colleague’s recommendation that Tiger has both Hong Kong and USA Options. With that in mind, I decided to start my Tiger account.

T: Have you established an investment strategy that suits your needs?

I have 2 separate portfolios.

The first portfolio comprises of undervalued companies which provide dividends.This portfolio, I perform DCA and hold them for long term. Unless stocks fundamental changes or stock prices is getting expensive, I do not sell them.These shares are meant for legacy planning, hence, I do not intend to sell them.

My second portfolio comprises of optionable stocks.It comprises either undervalued companies or ETFs.The aim for this portfolio is to provide monthly cashflow through selling options.Time frame is dependent on market conditions, shortest time frame is weekly to a few months.

T: Since you began trading options, has your interpretation changed?

When I first started options, it was due to greed and wanting to get rich soon. (Young and dangerous then)

After I had gained experience and restarted options, my motivation is to obtain a supplementary income, if possible, replace my income, so that I will no longer be dependent on my primary income. This will give me the freedom to spend more time with my loved ones and to pursue my interests, if I choose to.

T: What is your most commonly used option investing strategy? How are the earnings?

My most commonly used option investing strategy is selling cash secured puts.

Basically, I will replace my conventional stock buy order, with selling put options at the price that I wanted to buy the stock initially, then I will wait for the assignment if it comes.If assigned, I will get the stock at a discount compared to conventional buy order.If not assigned, I will sell the put option again and wait again.For this strategy, you will define the earnings rate at the time of execution.

In general, I am achieving 3-5% monthly return of capital on an average basis.

T: Can you tell us your most unforgettable investing story

I was involved in the May 6 2010 flash crash in the stock market.The market plunged suddenly and without warning. All my stop losses were triggered, but as the market crashed so fast, my stop losses were assigned at extremely poor rate.

I can’t remember the exact %, but the assignment was several times of my stop loss when filled. I lost around 20k USD in 1 night, even though I had set up all the necessary stop losses.After it happened, my mind was blanked out for a few days. I developed a healthy fear for the markets, and hence the decision to only focus on Undervalued dividend stocks which I will no longer need stop losses as I intend to buy and hold only.

T: How do you do stock investment research in your everyday life?

In general, I go through financial websites like Motley fool, CNN, Bloomberg, yahoo finance for stock investment research.While driving, I will listen to youtube with regards to financial news.With regards to company valuation, I will cross check with Simply wall street, Tip ranks and Reuters.

Lately, I have been following tiger community and news for financial related news.The financial information and news are timely and serves as a 1 stop portal.

T :Lastly, what would you like to say to your fellow Tiger friends?

Everyone’s character and temperament is different.Hope that Tiger friends is able understand more on the various investing styles and choose the one that’s the most suitable for them.They will be able then, to gain more while doing less.

To end off, invest safely everyone!

@Wayneqq

Hi, I am wayneqq. I am in my early 40s and I work as an engineer doing research and development in electronics. I like photography and taking photos of natural landscape as can be seen in my profile picture. I am true blue Singaporean, born and raise here in HDB heartlands and grow up average like any other child.

T: Can you share with us your investment story

The old adage my parents taught me was study hard, get a good job, work hard, save as much as possible, and you will lead a good life and retire rich. As I grow up following what I was told, I begin to doubt that. I seen people who worked hard all their lives, but still remain poor and people who hardly work, but happen to grasp seemingly mundane opportunities became very rich. This was when I start to pay attention to how these average people became so successful. The first book I was introduced to was Rich Dad Poor Dad by Robert Kiyosaki. The ideas espoused in the book blew my mind away.

I began to dabble in stocks about 8 years ago in 2014 but had no idea how to go about doing it. OCBC bank was having a promotion for their Blue Chip Investment Plan (BCIP), so I signed up for it and started to DCA into REITs after I read up a bit of what DCA is and what REITs are. I collected regular dividends and continue to DCA in since then, but I was really passive until after the stock market flash crash in 2020 due to covid-19 and subsequent lockdown that spur my interest again in stocks.

T: Why do you choose Tiger? Which aspects did you find most attractive?

I had attended VI college and was introduced to options. I was looking around for a platform to do options. My brother introduced me to Tiger broker when he overheard me talking about options. He told me the sign up was very fast, the interface was nice, the commission was low, it has access to many markets, and he was also using it for options. As I was paying an arm and leg for the commission for using banks to buy and sell stocks, and this sounded really good, I immediately sign up.

T: What are your investment preferences?

I am more of a long-term investor. I will hold stocks for years so I tend to look for companies with solid fundamentals and the potential for growth or at least stay relevant for 5 to 10 years. I use options as a tool to hedge my entry and exit for my stock positions. As I am in Singapore, I have a larger part of my portfolio in the Singapore Market, specifically in REITs. Unfortunately, Singapore market does not have options, so I will buy and sell stocks directly. Most people group stocks into defensive, growth, value etc. I prefer to look at them as individual companies instead of such big groupings and I will look at how they compare against their peers (if any) and whether they have the right product and strategy to still be around in 5 to 10 years.

T: What do you think you know about options trading?

I did not know much about options until recently. Prior to me attending VI college, I was told not to even touch any type of derivatives because they are very dangerous. After attending VI college and understanding more about options and how to use such powerful tool, I knew I just had to try it, and I never look back since then.

T:Why do you like options trading?

Options are very powerful tools. They allow me to reduce my risk of my stock holding and give me regular cash flow while I wait to add to my position or divest from my position. This cash flow is tax free and is on top of any potential dividends the stock will pay out, and the returns from selling options can easily be double digit percentage compared to dividend yields and bank interests.

T: What is your most commonly used option investing strategy?How are the earnings?

My commonly used option strategy is Selling Put and Call options, specifically Selling cash-covered puts and covered calls. Sometimes, the simplest strategy is the best. Typically, the returns are high single digit to double digits percentage per annum.

T: Can you tell us your most unforgettable investing story?

Although many people say that as a long-term investor, you should not be concerned about short term fluctuations. However, knowing technical analysis is also very important. Establishing a position based on valuation is important, but knowing stock trend at the point in time can give so much added advantage to the entry or exit price. There are so many instances where I know that the price is below value and I entered a position, only to see the price drop further because I did not understand enough TA to notice the bearish trend. This is worse for options because all the gains and losses are magnified.

One recent example is Alibaba. It was oversold and was on the rebound. Unfortunately, I sold a call option when it was just on the rebound. Then the price went up from 85 to 120 in a few days. The option premium went from 0.70 per share to 2+ per share. If I had known TA and waited for a few days, I would have made 300% more in a few days.

T: Do you have any new insights on recent market fluctuations?

The market will continue to be very volatile with so much uncertainty. The fed is determined to tame inflation. This means that they will continue to increase interest rates and reduce their balance sheet. This will put downward pressure on the market, especially on companies who do not have positive cash flow. Coupled with the uncertain situation in Ukraine, and the supply chain issues caused by covid, we can expect more ups and downs.

T: Could you give us investment advice for our new tiger friends?

Do not buy into any stock or do options based on hearsay or recommendations from anyone. Always do your own research. Google is your best friend. Use it to look into the company that you have an interest in, how they make money, how they plan to expand, what is the market they are targeting at, and who their competitors are.

Seeking Alpha is a good site to go to for analyst’s thesis on companies. Understanding financial statements, looking at earnings report, earnings calls, company announcements, and knowing who is who in the company management are also important to understand the company products and direction.

T: Lastly, what would you like to say to your fellow tigers?

Stay safe, stay invested, do not FOMO and buy or sell just because everyone is talking good or bad about it, keep sharing, and make more friends here

@Michane

Hello Tiger brothers and sisters!I’m a Singaporean in my late 30s and currently dedicating half of my time working at a friend’s dessert shop for 6 months. My username is also a name which I gave myself as an English name. I happen to think of it, because it is unique and I wanted to give people a “chance”. Also I would love to have something that starts with a “Mi”. Hence, this name “Michane” is borned!

T: Can you share with us your investment story

I have been trading just after a year since I started working in my 20s, as I believe it would be wise to start investment since young. However, I stopped halfway as I realised later on that I was quite bad at applying what I learnt from those stock seminars which I attended, leading me with a portfolio of losing trades instead. Then, almost 10 years later I got married and my husband showed me how to trade with confidence and so I took the courage to trade again.

T: Why do you choose Tiger?

I chose Tiger because I find it quite user-friendly. There are lots of opportunities for writing post and articles, and chances to earn Tiger coins or win commission cards to offset our trades! The chance to win commission cards is a great perk and very attractive to me. I can also reach out to our friendly customer service whenever I need help!

T: If you would like to introduce a feature to Tiger Friends, What would you introduce?

Tiger is quite reliable too with regards to news feed and some news come quite fast. So dear Tiger friends, whether you’re a newcomer or not, don’t just rely everything on Google!

T: You started trading options for what reason?

Last year, I left my job to relocate overseas with my husband for his outstation contract and during the second half of the year, I became a day-trader. However, recent market situation has further fueled my interest to delve into Options-trading. Now that both of us are back in Singapore, I have also turned into a short-term value investor. And Options-trading allows me to continue investing at my comfortable pace.

T:Why do you like options trading?

I love the flexibility of Options-trading! Base on the market trend and the stock position that you are holding, you can choose the strategy best to work around losing trades or just to profit from the Option trade itself. Chances of returns can be pretty high, although this comes with higher risks too.

T: What is your most commonly used option investing strategy?How are the earnings?

My most commonly used option strategy is sell PUT. I have been doing it since February. It’s a 100% win for now and my earnings from it so far is just over $100, as I only trade 1 Option lot each time and letting it go expire! To me, sell PUT is the best stategy to average-down a stock that you find “stuck” in a portfolio for some time.

T: Can you tell us your most unforgettable investing story

After some years in the trading world, I would prefer to trade Options. Apple is one of my favourite stocks to trade using Options. My option-trade list has expanded to include Nvax, Tesla, Palantir and Globalstar as well.

My most unforgettable investment is my 2nd NVAX buy CALL trade end of last December. I had it at Strike price $157.50 with expiry selected as 23rd January 2022. I was dumbfounded with the unexpected twist of fate for the vaccine stock. Many investors were losing trust with NVAX due to multiple delays in its vaccine shipments and US FDA approval. So the stock dipped from $159 in December until almost half on 23rd January 2022 and my 1 whole Option lot of it had to expire worthless. It became my first loss with an Options trade too. I was lucky to have profits previously from my 1st NVAX buy CALL, and this became an offset for most of the loss from my 2nd trade.

T: Do you have any new insights on recent market fluctuations?

We know that recently the market has been going crazy with the ongoing virus, war and also US Fed has already started its measures to raise interest rates and that has “cooled” the market quite abit. Let’s just say that April would be a bad month for trading but we could always play around our strategies with Options trade.

T: What would you like to say to your fellow Tiger friends?

It does take some courage to do Options trade, however more important is the courage to take the first step in doing so. You will come to realise that a whole new world of trade opportunities is waiting for you!

I would also like to wish all Tiger friends many safe and happy trading days ahead! Last but not least, I hope you will get inspired to start Options-trading like me pretty soon.

How do you define options trading?Please let me know in the comments.$Tiger Brokers(TIGR)$

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