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Tom Nunamaker

Author Archives: Tom Nunamaker

November 20, 2012

Are You Throwing Money into a Sinkhole?


Do you ever feel trading is like throwing money into a sinkhole?  Over 90% of traders lose money and are supporting the 10% (or less) who can.  Many look for education or try to learn it on their own.  Many fail.  Few succeed.

I work for Dan Sheridan at Sheridan Options Mentoring where we teach people to trade options.  It’s been a fun job and I was one of Dan’s students in 2006.  I’ve learned a LOT.

I wish when I was a student, I had a place to park my cash while I was learning. 

I occasionally get requests for recommendations for managed accounts so people can either have their money grow hands off, or generate some cash while they learn to do it themselves.

But where do you put your money?

I have a few acquaintances that do this kind of thing.  Since I get asked this question enough, I decided to put it in a post so I can refer people to this page 🙂 (programmers are lazy eh?)

On my list, I’ve known the first four for years and the one in Australia is a friend of a close friend I’ve known for about 10-years.  They are all great traders and great money managers.  If you don’t want to trade yourself, you should talk to each one and make your own decision.

While I personally know each of the principles at these managed account firms, you’ll have to do your own due diligence.

Each of these firms has legitimate traders that are trading their own accounts and are taking managed clients (as far as I know).

Without further ado, here’s the list:

  • Firm #1: U.S. based hedge fund.  Must be an accredited investor.  $100k minimum?
  • Firm #2: U.S. based hedge fund
  • Firm #3: Limited to 15 clients for now.  Requires PM account at Interactive Brokers. The trader was written up in TASC magazine.
  • Firm #4: This is for Non-U.S. clients ONLY!  Based in Switzerland with a 180-year old private bank and VERY interesting account management platform.  I think they specialize in trading Forex but I don’t their exact offer. $50k minimum
    Contact Chris for more information
  • Firm #5: Australia residents only!  Pool of Forex traders with up to 13-year profitable track record. $10k minimum

I hope you found the list interesting.  If you know of any similar firms, let me know and I can add it to the list (if I like it and I am confident they are  of very high quality).

April 3, 2012

Option Synthetics Quiz Answers

Quiz Answer

Quiz Answer

How did you do taking the quiz on Option Synthetics? In case you want a refresher, here’s an article I wrote about them that is a good summary: What everybody ought to know about Option Synthetics. We can use an easy equation to remember the synthetic relationships:

C = U + P

The relationships can be summarized in this short table:

1. Long Call = Long Stock + Long Put (C = U + P)
2. Short Call = Short Stock + Short Put (-C = -U – P)
3. Long Put = Long Call + Short Stock (P = C – U)
4. Short Put = Short Call + Long Stock (-P = -C + U)
5. Long Stock = Long Call + Short Put (U = C – P)
6. Short Stock = Short Call + Long Put (-U = -C + P)

Armed with this information, let’s go through the quiz:

1. How would you create a synthetic SHORT CALL?
That’s #2 on our summary: Short Stock + Short Put

2. How would you create synthetic LONG STOCK?
That’s #5 on our summary: Long Call + Short Put

3. How would you create a synthetic LONG PUT?
That’s #3 on our summary: Long Call + Short Stock

4. How would you hedge an out-of-the-money SHORT CALL with a synthetic position?
To completely hedge the position, use a synthetic LONG CALL at the same strike as your SHORT CALL.
Buy LONG STOCK and a LONG PUT at the same strike as your SHORT CALL.
You now have zero risk and are perfectly hedged.

5. If your underlying is near your upside expiration on a butterfly trade, how would you reduce your delta risk with a synthetic position?
If you are near the upside expiration of a butterfly, you have negative Deltas.
New need to crease your deltas. Positive delta synthetics are #1, #4 and #5 on our summary list above. Any of them should give you more positive delta. If you need a fine adjustment, use #1 or #4 as #5 (Long Stock) is +100 deltas, which might be too much, depending on your butterfly size.

6. How can you completely neutralize a 100/110 call credit spread with puts?
Create a box spread. The 100/110 call credit spread is -1 100C and +1 110C. If you add +1 100P and -1 110P you would have synthetic Short stock at 100 and synthetic Long stock at 110. This position has zero risk.

7. You are long a futures contract at $100. The contract is now at $125. How can you lock in the $25 profit without selling the futures contract over the weekend with a synthetic option position?
To lock in the $25 profit, you just need to add a synthetic short future with futures options:
-1 125C and +1 125P should give you a synthetic short future contract, which will neutralize your long future.

I hope you enjoyed the quiz. It’s good to know these relationships and practice from time-to-time with a quiz like this!

March 30, 2012

Options Synthetics Quiz

Multiple Choice Test

Option Synthetic Quiz

A friend was taking an exam to get Customer Portfolio Margin for his option trading account recently.  He showed me the exam and I noticed that 20% of the exam were questions about option synthetics!  If it’s that important to an option broker, it should be important to us.

My two youngest children attend the German school system.  There are no multiple-choice exams: they are all essay questions.  You have to show your work.  Let’s do the same thing.

Write down your answers for each question.  
Explain WHY the answer is what you say it is.  Don’t just say, ___ .  Show your work…you’ll learn a lot more.   This is an open book exam since I can’t watch you, but try to answer the questions without looking anything up.  You’ll get more out of it.

Here we go

1. How would you create a synthetic SHORT CALL?

2. How would you create synthetic LONG STOCK?

3. How would you create a synthetic LONG PUT?

4. How would you hedge an out-of-the-money SHORT CALL with a synthetic position?

5. If your underlying is near your upside expiration on a butterfly trade, how would you reduce your delta risk with a synthetic position?

6. How can you completely neutralize a 100/110 call credit spread with puts?

7.  You are long a futures contract at $100.  The contract is now at $125.  How can you lock in the $25 profit without selling the futures contract over the weekend with a synthetic option position?

 

Good luck with the quiz!  I’ll post the answers next week.

 

February 11, 2012

Thesis 1.8.3, GoWebBaby and UberMenu

Trying to Get Back to the Forest – Image from Imgur.com/2IaHG

I’ve been waiting for Thesis 2.0 to be released, just like many of you, for quite some time.  Chris Pearson finally had a great update post and announced Thesis 1.8.3 was being released!

Yeah!  I always like seeing what new toys I have to play with.

Naturally I couldn’t wait

I’ve already installed thesis 1.8.3 on a few site I manage.  Overall the experience has been excellent.  Thesis is pretty easy to upgrade as long as you DO NOT MODIFY THE CORE FILES!

OK.. now I’m upset…

GoWebBaby did the design and thesis implementation for ExperSignal.com.  I really like their design but their Thesis implementation was … how shall I say it???  Non-standard?

I didn’t realize it at first, but they Modified the Thesis core files!

Why would they do that?  (I actually have stronger words but I’m restraining myself now… calm down..)

I asked them for a list of core file changes they made so they sent me a list of two or three things.  Not TOO bad, but still just isn’t the right way to create a Thesis site.

After a little digging, I found about 5 other core files they modified.   GRRRRRRRRRR.

After a few hours of repair coding, I’m down to one or two core file changes I have to think about how to implement.  I’ll get there but I’m still P.O.’d I have to do this at all.

For the time being, I’m holding off on upgrading expersignal.com to Thesis 1.8.3 until I solve the final pieces and correctly customize thesis totally in the /custom folder.

Let’s talk about UberMenu now.

I found UberMenu on CodeCanyon and it’s pretty awesome.  My son is a composer and building a website for sound effects (sfxfoundry.com).  Spencer wanted some pretty cool menus and I bought UberMenu for him.  What’s a dad for? 🙂

UberMenu looks pretty sweet.  However, when I upgraded to Thesis 1.8.3 it totally died.  I wrote to the developer of UberMenu in hopes he has an Uber-Simple way to fix the upgrade problem.

Bottom line: If you use UberMenu and Thesis 1.8.2 or earlier, hold off on upgrading to 1.8.3 until this issue is resolved!

I’m sure it’s probably something easy like deactivating the plugin and reactivating it, but I don’t want to mess up Spencer’s menus to test it…but I do have a good backup.. hmm…. something to try!

OK.. back to fixing GoWebBaby’s induced Thesis problems…..

November 6, 2011

Royalty Free Stock Photo Web Sites Comparison

magnifying glass

We examine royalty free stock photo web sites

I took Don Crowther’sadvice last year and started to build my image library.  I was trying to minimize the cost per image as I wanted quite a few to choose from in my library.  Something crazy in my brain figured out that fotolia’s 100 images/day deal was the best value.  So I paid the $747 price and started downloading my 100 files.

WHAT HAVE I DONE?

I immediately realized I had bitten off a HUGE time commitment to find, download and file away 100 images per day.  I think I figured out I had made a huge mistake about 10 minutes into my first day’s downloads.  I ended up spending 2 hours per day for the next month downloading images!Streaming and download Kong: Skull Island (2017)

I learned my lesson

Now it’s 1 year later and I’d like to start adding fresh images to my library.  I’ve been looking at the same images for 1 year now after all.  I’ve probably only used 10% to 15% of the images in my library so I’m going to throttle back my image purchases this time.  I have three requirements:

– I don’t want to spend more than $650 maximum
– I want to keep the cost per image to $0.25 or less
– I don’t want to download more than 30 files per day. 25 or less is better.

My research

With those restrictions in mind, I started to do some price comparisons of the various royalty free stock photo websites available.  The following table shows my research with current prices as of today and how many images each website says they have.  The cells with the green background color meet my requirements of price and cost per image:

http://www.photos.com/ 2.6 million
100/week (14/day)
Images
Cost/Image
3 Months
$299
1300
0.23
6 Months
$549
2600
0.21
1 Year
 $988
5200
0.19
http://us.fotolia.com/ 15 million
25/day
Images
Cost/Image
1 Month
 $249
750
 $0.33
3 Months
 $649
2250
 $0.29
6 Months
 $1,199
4500
 $0.27
1 Year
 $2,099
9000
 $0.23
http://www.shutterstock.com/ 16.8 million
25/day
Images
Cost/Image
1 Month
 $249
750
 $0.33
3 Months
 $709
2250
 $0.32
1 Year
 $2,559
9000
 $0.28
http://www.123rf.com/ 11.1 million
26/day
Images
Cost/Image
1 Month
 $230
780
 $0.29
3 Months
 $590
2340
 $0.25
1 Year
 $1,960
9360
 $0.21
http://www.thinkstockphotos.com/
25/day
Images
Cost/Image
1 Month
 $299
750
 $0.40
1 Year
 $2,388
9000
 $0.27
http://www.photospin.com/ 2.1 million
25/day
Images
Cost/Image
1 Month
 $188
750
 $0.25
3 Months
 $388
2250
 $0.17
6 Months
 $688
4500
 $0.15
1 Year
 $1,188
9000
 $0.13
http://www.ingimage.com/ 1 million
35/day
Images
Cost/Image
1 Month
 $199
1050
 $0.19
3 Months
 $339
3150
 $0.11
1 Year
 $889
12600
 $0.07
http://www.istockphoto.com/
30/day
Images
Cost/Image
3 Months
 $979
2700
 $0.36
6 Months
 $1,862
5400
 $0.34
1 Year
 $3,542
10800
 $0.33
http://www.photosxpress.com/ 12.7 million
500/month
Images
Cost/Image
1 Month
 $550
500
 $1.10
25/month
Images
Cost/Image
1 Month
 $37.50
25
 $1.50

Results

Only rows with both price and cost per images columns in green are contenders for me. This leaves me with:

http://www.photos.com/ 3 and 6 month plans
http://www.123rf.com/ 3 month plan
http://www.photospin.com/ 1 and 3 month plans
http://www.ingimage.com/ 1 and 3 month plans

The most tempting is http://www.ingimage.com/ based on price and cost per image, which are $199/$0.19 and $339/$0.11. The problem I think is it only has 1 million images. Only http://www.123rf.com/ has over 10 million images and wins on my other criteria. I’ll do sample searches on all four contender sites, but I have a feeling 123 Royalty Free will win.

iStock Photo, Shutter Stock and Think Stock Photos had some beautiful photos, but I can’t justify the price yet. If you have a bigger budget, I would consider them.

Conclusion

There are many websites selling royalty free stock photos. It’s not hard to get great photos for your website at affordable prices. Do some sample searches on each site to see if it has photos you’re interested in. Don’t make my mistake from last year of ordering 100 images per day if you work alone.

Start building YOUR photo library. You won’t regret it.

Where do you get your photos? Leave a comment below!

UPDATE
I did several searches on the sites and found Shutterstock had the best images for my needs. I found an online coupon for a 10% discount. After I did a 1 month subscription, I noticed the auto-renew was turned on. Make sure you turn that off or you’ll get rebelled the next month!

I went to turn it off and Shutterstock offered to reduce my monthly bill another 5% so the $249/month program is now only $212.80/month. At this price, for 25 images per day, that is $0.283 per image. It’s slightly more than I wanted to pay but the selection of over 16.8 million images is amazing. I’ll write up Shutterstock later after I use it for a while.