TMX Options Education Day Event

Today I attended the TMX options education day event at downtown Toronto. The event is quite enlightening and really worths the whole day time I invested.

options education day

Option is a thing I want to learn and practice for years. In November 2015, I passed DFOL (Derivatives, Futures and Options Licensing Course) and got a high mark of 94. I also learned some basic option theories when I was preparing CFA all three level exams. But I didn’t have much hands-on experience. Only in 2016, I traded options a few times, and I remember one time I sold a put of MET and got excercised. As in recent 2 years my main focuses was ETF, forex and technical analysis, option learning was not a priority on my learning list. Now I plan to pick it up gradually, allocate maybe 30 minutes per day to increase my option trading knowledge.

Patrick Ceresna did most of the presentation today. Besides his expertise of options, he is an outstanding speaker. The first time I was aware of him was from the podcast “Macro Voices”, when he mentioned he is at Toronto. The second time was from last month’s CSTA Oakville Chapter event, which I attended via webcast, his presentation was impressive.

What I’ve learned from today’s event:

1, The top-down holistic view of investing:

  • Three aspects: (1)Market conditions; (2)Technicals; (3)Corporate fundamentals;
  • Five factors driven the stock prices: (1)currencies/foreign exchange rates; (2)commodity prices; (3)central banks’ policies; (4) bond markets; (5) real eastate markets.

2, In the field of investing, there is no short cuts, no substitute for experience;

3, Option is a good tool to manage risks. Risk management is still a weakness of my investing process. I should learn how to incorporate options into it.

4, There are many option strategies. But complex strategies don’t mean they are more effective or more profitable. Remember: keep things simple, be very good at a few strategies are the best choices.

5, Option can be used among all asset classes, such as stocks (including etfs), bonds, commodities (gold, oil, etc.), currencies. When one asset class’ option opportunity is muted, try other asset classes.

6, Use currency options to hedge currency risk of portfolios. USX is listed at Montreal exchange. Learn how to use it.

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Behavioural Economics Matters

This Wednesday I attended a Morningstar event about behavioural economics in downtown Toronto. It was quite fascinating and enlighting. Some personal takeaways as below.

1,  People are more IRRATIONAL than rational, not only in investing activity, but also in our daily life. The more we realize this, the higher chance we can save ourselves.

2, Don’t try to predict the markets. Don’t have strong bias before making investment decisions.

3, People + AI (or computer assisted system)= Enhanced people. Systems and rules are more reliable than people.

4, Behavioural coaching is part of financial advisor’s daily job.

I’ll pay more attention to behavioural economics topic afterwards. Read the “Nudge” first by this month.