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Have a question about option trading?
Chances are, someone's already asked it. And, we've answered!
If you have question not covered in this FAQ, you may post your question to inquiry@celestialoptions.com.
About Option
1. What is option?
In layman term, option is similar to stock warrants except that the former is an exchange-traded financial instrument. However, options work entirely different from warrants from trading point of view. (Read article on What is Option? at the Learning Center).
2. Is option trading risky?
Option trading can be as risky as you want it to be. However, if it is done in a conservative and responsible way, it is less risky than trading stocks, futures, and real estates.
3. Is an options contract similar to a futures contract?
The simple answer is no. The only thing that looks similar is that they both have an expiration date. Futures do not have calls and puts.
4. How to trade option?
Options can be traded by buying calls/puts or selling calls/puts, or any combination of calls/puts. Options can also be combined with the underlying stocks or futures for better risk-reward advantage.
5. What is the normal return of option?
Returns on option vary from 2% to 1,000% in a few days to a year depending on the types of strategies used.
6. What is the minimum capital to start?
The optimal capital to start is US$10,000 but smaller amount is possible.
7. Which geographic market do you cover?
We only recommend US market at the moment.
8. What option markets do you cover?
Basic course will cover mostly equity (stock) options whereas advanced course will cover futures options. Nevertheless, all concepts can be applied in any market.
9. Which broker will I be using?
The stock option broker recommended is an online discount broker called optionsxpress.com. For futures brokers, we recommend expressfutures.com.
10. Is online trading safe?
Online trading has become a way of life to trade any market in present days. Most online-trading sites are SSL secured.
11. Do I need to contact the broker?
Contacting a broker is not necessary but is available during business hours posted by respective brokers.
12. What is the time difference between Malaysia/Singapore/Hong Kong and the U.S.?
The U.S. Eastern-time (New York) is exactly 12 hours behind, 13 hours during winter to spring season.
13. Do I need to stay up throughout the night to watch the trade?
No, you don't need to stay up to watch the trade. You orders can be executed while you are asleep. In fact, the trading methods we recommend take one to three months to exit.
14. Do I need to study a lot to trade options?
Minimum understanding of the mechanics and methods of trading options is required. It is common for many successful option traders to adopt and stay with one or two methods. In this case, further study may be limited.
About Crossing Technique
1. How would The Crossing or The Practical Options Trading Course differ from the Basic Options Trading Course which was previously offered?
The Crossing is part of the Hit&Run Techniques. It is not the entire new course by itself. Hence, there is no major difference.
2. Is there any additional software to buy or subscribe in implementing The Crossing?
No software or service to subscribe.
3. In the Basic Options Trading Course, the main indicators used are: Bollinger Band, RSI, MACD, Stochastic, MA, Volume and Candle Sticks. Are any of these indicators going to be used in The Crossing? If the above indicators would not be used, then, what are the new indicators that shall be used?
Every technique will use different types of indicators for its unique purpose. The Crossing will use almost no indicator. That's the beauty.
4. How soon can a student start trading based on The Crossing or how many of previous students have started trading based on The Crossing or after completing The Practical Options Trading Course?
Anyone can start trading immediately as long as there is a trading account open. I have a feeling that most, if not all, will start immediately. There is almost no learning cure required.
5. Does The Crossing requires one to scan through all the stocks which normally takes hours or is there a method found in The Crossing that would minimize that time to as minimum as possible?
About scanning, so far there is no scanning tool available. This is probably the inconvenient part of the method. As a matter of fact, I don't think there is purpose built scan for all other trading methods! Furthermore, one will require a real-time data to scan it. This will not come free and someone will have to build the formula for it. However, we do have a way to find it, albeit more time-consuming. This is my current way of doing it as I don't subscribe to real-time data myself. Nevertheless, I am considering it.
6. How much time does a student need to spend per night implementing The Crossing?
The amount of time required differs from individual to individual. But it is still limited as nobody can look at all charts of the U.S. stock markets. Again, you don't need that many trade signals.
About Celestial Options
1. What is the background of Celestial Options?
Celestial Options is founded by Foong Mun-Keong, president and option strategist, and Danny Ng Siew L'Leong, an investor and fund manager.
2. How is Celestial Options different from others?
We acknowledge the power of time value decay (TVD) on option. Naturally, our strategies centered on the sell-side of the option trading or strategies that wholly or partially offset the detrimental TVD's drag on our position. It is also our objective to cover strategies that we are familiar with and battled tested. Each strategy is then studied and analyzed in detailed including the adjustment of trade to turn the loss in the prior position to profit again. Celestial Options does not sell any "mandatory" proprietary software or tools; however, it does recommend powerful software that is complementary to the course.
3. Does Celestial Options offer direct investment - as in a fund - to the public?
No, Celestial Options does not publicly offer and market any fund. All requests for direct investment are answered on private basis. You may call us at +603 7665 2005 for details.
4. Can Celestial Options provide assistance and guidance to invest in the U.S.?
You will be guided and introduced to U.S. brokers as part of the basic course program.
5. Is there follow-up guidance after the course?
It is part of the course program to offer free-of-charge, three-month follow-up guidance and assistance in placing trades and in applying course knowledge to trade. Upon expiry of the three-month period, you may subscribe to the service for a small fee.
6. Is there an alternative to learn option trading other than attending the course?
It is recommended that all novices be familiar with the terminologies and mechanics of option before trading. By merely reading published materials may not be sufficient to begin trading successfully without firstly having to lose some money. If you are unable to attend the course due to time constraint, you may attend an online webconference which Celestial Options will soon introduce as an alternative to learn option trading. Send an email to inquiry@celestialoptions.com to obtain course details and schedules.
Questions Unique to Malaysians
1. Are Malaysians allowed to invest abroad?
Under the Exchange Control Policies of Malaysia (Section II Capital Account Transactions (b) Investment Abroad by Residents), residents, other than commercial banks and approved merchant banks, are required to seek prior approval from the Controller to remit funds in excess of RM10,000 or its equivalent in foreign currency for overseas investment purposes. Approval is based on a set of transparent criteria.
2. What is the maximum amount of remittance before a remitter is required to declare it in Form P?
The threshold to complete Form P for payments has been increased to RM50,001 from RM10,001, in line with the policy of gradual and progressive liberalization of the financial sector by Bank Negara.
3. Are Malaysians allowed to repatriate profit and capital back to Malaysia?
Foreign direct investors may repatriate their investments, including capital, profits, dividends and interest.
4. Is there any income tax levied on remittance received in Malaysia for investing abroad?
According to the 2004 Budget released in the Dewan Rakyat at 4.00 pm on 12th September 2003, remittance of fund in Malaysia from overseas investment will be exempted from income tax with effect from year 2004. Check with your tax consultant or IRD official for details unique to your own tax circumstance. |
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