Published: 17 Nov, 2006 22:34 PT
I really worked hard the night before. I read through the 115-page Expo catalog, twice. I read all the exhibitor bios, and marked all the booths that I wanted to visit on the map. Then there are the 80 pages of seminars, presentations, and workshops - over 200 of them over the 4-day span. I carefully planned the ones I wanted to attend, and entered them into my Outlook calendar, then taking a second pass to make a decision between conflicting ones. I focused mostly on the ones related to options, but still I am amazed at how many seminars featured options strategies.
Day one was supposed to be a light start. First seminar starts at 11:30am, one that I am looking forward to nonetheless. The topic was "Option Strategies You Can Use: Intermediate to Advanced". The speaker was Dan Passarelli, from the Chicago Board Options Exchange. He had 6 different sessions, half of them I was planning to attend.
I really like the way Dan presented his material. I'm glad he didn't spend too much time on the real basics, but the quick intro on option pricing and time decay was appropriate for the audience. The seminar covered most of the techniques from buying and selling Calls and Puts, to credit and debit spreads (vertical, horzontal, calendar, diagonal), to the more sophisticated Butterfly and Iron Condor. The pros and cons of each and their Profit & Loss profiles were discussed. There was also a great discussion on Historical and Implied Volatility, the Volatility Index (VIX), and how volatility can be used to help track market sentiments of the underlying stock.
Most of the material was not new, but I like the way Dan presented the material and it was enjoyable. I got to chat with him a little after the seminar, and that proved to be the best part. I'm going to look forward to more of Dan's presentations.
There wasn't anything terrible exciting until about 3pm, so I decided to skip the "Software Round-up" Panel Discussion, which is essentially a panel discussing the various features of differnet software platforms, their respective areas of strength, as well as the unique things one product does that others can't quite do yet. Instead, I went for a quick lunch and spent the time roaming the exhibition halls.
The exhibition hall wasn't that big, but I wanted to spend enough time at each booth to really understand what each company does and how they differentiate from each other. I spent about an hour there, but it was hardly enough to cover about a dozen booths. I had about 50 or so companies I wanted to visit, so there's a lot more to cover in the next couple of days.
There was a 2-way contention at the 3pm timeslot. I had to choose between "Credit Spreads and Debit Spreads", and "The Science of Setting Stops". I opted for the second one, as I felt I could value more from that talk. It turned out to be a good one. In the first half of the hour, the presenter was using examples to illustrate the importance of having a set of exit criteria before entering a trade, and to have the discipline to follow thorugh and take action when these criteria are met, especially on the downside. The discussion covers hard stops, as well as the extremely useful trailing stops that have been made widely available to the individual trader with the advent of online trading. The second half was reserved for discussing sensible stop levels based on different types of investments that carry different levels of risk, and progressively unwinding a porfitable position to capture profits and reduce exposure. Suffice it to say that there was a lot of chart reading as well. Setting the stop prices depends on the type of investment and varies based on the investor's sentiment about the investment, the volatility of the instrument as well as risk tolerance. However, the bottom line is the need for discipline to set stop levels and stick with them.
I spent some more time on the exhibition floor before I wrapped up the day with a training serssion entitled "Forecasting and Speculating with Options", which involves reading stock charts and option chains to pick potential trades and entry timing. It was a Fidelity-sponsored session so I got to see some of the cool option tools that are available in the Active Trader Pro platform.
Day One turns out to be nice and light. And I made a note of a few key takeaways.
1) I spoke with the people at the registration desk, and they told me that there were over 9,000 registrants for the Expo. From what I observed, the demographic of the attendees are older (40 and up), and predominantly male. Many of them are hard-core traders, as evidenced by the fact that many gather in the resting areas and trade away with their laptops full of level 2 screens flashing green and red.
2) There are a lot of very sophisticated tools available to the individual trader that I was not previously aware of. And as such, these hard-core individual traders are expecting more and more out of their tools. It's no question that just a few years ago most of these technologies were only accessible by the pros, and some of these tools were not even available to the pros a decade back.
3) It seems like the technology for automated trading systems is becoming mature. I am personally very fascinated by the idea of automated trading, mostly because it is always-on, can react quicker than any human being, and most importantly, it takes the emotions out of trading. Those close to me know that I have been itching to try it out as soon as I feel that the technology is stable enough, and I think that day is not far away. A few companies are offering rather sophiticated platforms for rule-based automated trading, and a couple of more niche firms are building dedicated hardware solutions for turn-key automated trading systems for the individual trading, if you can believe it.
4) The cost of trading has really come down, and I have been seeing commissions for stock coming down to as low as $1, and options for as little as $0.65 per contract. And all this with no minimums and low initial deposit requirements. I think this will be a key factor to lure me towards automated trading.
So that about wraps up Day One. Day Two would be an intense day with over 8 hours of seminars and workshops booked into my Outlook calendar. I doubt if I can cover all that but I'll try.