Am looking to get into some trading. I have previously traded ETOs quite unsucesfully and with a bit of a scare.
I was mainly writing credit spreads (Selling say a $10.00 call and buying a $10.50 call as protection) and vice versa with puts. Whilst not winning many and having no money management stratergy what so ever, the following happened;
I was in a RIO position some 5+ years ago and they announced a share buy back. As I had sold a call, I was liable for basically the balance of the value of this buyback. I still remember when my broker called me up telling me I was up for about a $50K loss! As a uni student at the time, i laughed, then cried, then rolled into the fetal position.
A letter latter to the broking firm (blah blah, I pay for full service brokerage, and I was never warned about this buy back) they covered my buy back obligations.
Anyway, I am looking to get back into some trading with about $10-$20k in my war chest.
So what product/market should I choose?
Options - I had been frustrated previsouly with lack of liquidity and the feeling of being taken advantage of by Market makers. Whilst i realise their benefits with selling calls over stocks, buying puts for protection etc, are they worth trading?
ASX CFDs - I beleive these to be more 'transparent' then other CFDs offerd by other providers. I've read a few threds about stops being hit out of the blue, and other 'funny' goings on. So I beleive if I chose CFDs, these would be the way to go.
Futures - I have only just began my readings on futures, but beleive that this really is a day trading, whatch the screens second by second kind of sport.
Mini CFDs - I was all excited when I first read about ABN AMro minis, however I beleive that the spread between bid and ask can be a bit 'funny' at times. Also, as it is a 'warrant' product, I beelive it truly is only intended to benefit the issuer (ABN AMro).
I am looking into getting a margin loan facility (I have another thread enquriing about this) but this would be more of a long term adventure.
If anyone has had experience with some or all of these afore mentioned trading instruments, I'd love to know your words of wisdom, hear your stories, etc.