Being Early is just as bad as being Wrong.
If you don’t already know, being early can sometimes be worse than being wrong. With options specifically. Theta can eat away at your profits even if you’re right on the direction of the trade. Many will roll their positions to extend the time they have to be right. But this is essentially doubling down and doesn’t always go your way either, or there’s not enough premium to even begin rolling. This brings me to the topic of Structured Notes. Even more recently the Catapult Notes… Which I just learned was even a thing. I’m going to link out to the company offering this type of product here. What’s a catapult notes you ask? I honestly have no idea, my best guess is that it’s a mix between a buffered ETF and a structured note on the S&P500. And I guess it only trades at 18 month intervals, but can get called away at 12 months.. I’m not sure still trying to wrap my head around this one. Now don’t forget, this website/blog does not provide financial or tax advice. And we never will. Please reach out to your financial advisor or tax advisor for serious questions about the instruments referenced in this blog. Think of this blog as more of a traders journey if you will. A perspective into the unknown.. A dim light at the end of a very long tunnel. The one thing I find so vastly interesting about this dying melancholic industry is the vast deep sea of mystery that seems to just never end. It really is possible to learn something new everyday in finance.
I’m a big fan of two quotes I heard once upon a time. “What’s old is new again,” and “money is as old as the hills.” These always feel so relevant when learning about industry. Although the things immediately in front of us will often change with technology and the times, many core concepts will always be the same. For example wire transfer, ETFs, digitalization, uranium, structured notes, i-bonds, biotech. All relatively new right? Well let’s think of some things that are not so new; bonds, commodities, trading, raising capital, corruption, debt, speculation, swap agreements, diversification, derivatives. It’s said that the Dutch East India Company was one of the first public markets where people could actually trade stocks and bonds in the 1700s. Even before that companies would issues stock certificates to raise money for larger sailboats. Which would then sail across the world to look for spices. If the ship made it back the treasure would be divvied up to the stock certificate holders. Humans have been working together, for better or worse, since the beginning of time. There’s a lesson in this somewhere, but I don’t have the answers your looking for.. All I can say is I hope you stay along for the ride and enjoy the journey.
