Author Archives: Eric K

The Terrifying World of Options Trading

Talking with my millennial peers, I’m amazed by how many of them are afraid of or uninterested in the stock market. Although majority of them are too young to have lost their shirt in the 2008 collapse, parental influence has likely deterred them from taking interest in one of the greatest wealth-creation engines in the world; the markets. If their excuse isn’t fear based, it’s they think they lack the capital to get started and/or don’t have the time to invest in investing.

Unlike a lot of my friends, I’ve always been mesmerized by the stock market. At first impression, what could be easier than making a living by moving some numbers around on the computer for a few hours a day? My life long dream was to try day trading. My first stock purchase was back in 2001 when I was 14. I was deep into the card game, Magic: The Gathering and decided to spend my allowance buying shares of Hasbro to support the game I loved. My mom took my allowance and bought shares through her broker. It was around 16 dollars a share at the time… fast forward 16 years and it’s worth around 96 dollars a share! Although no one could have predicted Hasbro’s performance, the feeling of supporting a company by investing in it, and then profiting from that investment, has stuck with me into adulthood.

Fast forward to 2015. At this point in my life, I was a regular cube-jockey on the 9-5 grind. I decided to open a trade account with TradeKing (now Ally), and dumped my tax return into it. I knew I wanted to trade and invest, but I had no idea where to start or how to grow my pitiful account. Using the screener and research tools provided by tradeking, I researched as much as I could and eventually came across the website It became my hub for trade ideas and market news. After reading everything I could get my hands on, I started trading cheap biotech stocks. I had a few winners, but mostly losers. My problem was I wanted to trade, not buy and hold and hope for an eventual profit. Call me a degenerate gambler if you must, but day trading is what keeps my focus. I didn’t have access to enough capital to buy and hold a diversified portfolio while trading, so I was constantly buying on news and was often too late to the party to make big gains, then selling for a loss when I saw a new opportunity on the horizon. After losing a lot of money, I knew I had to change my strategy. I eventually stumbled upon an options chain and was as confused as I was intrigued.

Without getting too deep into jargon, options are a financial instrument that derive their value from an underlying asset. Since I’m not an expert in finance, I’m going to use the investopedia explanation:

What is an ‘Option’

An option is a financial derivative that represents a contract sold by one party (the option writer) to another party (the option holder). The contract offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security or other financial asset at an agreed-upon price (the strike price) during a certain period of time or on a specific date (exercise date).


Options are extremely versatile securities. Traders use options to speculate, which is a relatively risky practice, while hedgers use options to reduce the risk of holding an asset. In terms of speculation, option buyers and writers have conflicting views regarding the outlook on the performance of an underlying security.

Read more: Option
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Options are a completely different animal compared to stocks. A 1-3% move in the underlying stock could dramatically impact the value of an option. I was instantly addicted to the swings. Unfortunately, even though I had done some research, I was eaten alive. I had a few lucky up swings and a lot of unlucky down swings.

Thank God I never traded using margin or credit; only what little cash I could afford to risk. Although the thought of magnified returns was very tempting, I was smart enough to know I was too inexperienced to deal with that much risk. With every loss came a lesson, and I knew if I kept researching and trying new strategies, I’d eventually improve. Unfortunately, my losses combined with a few of life’s curve-balls caused me to put my dream of day-trading on the back-burner.

Fast forward to 2017. Life eventually calmed down, my bank account continued to grow, and I went back to trading. I made the mistake of jumping at one of the first biotechs I saw running up. Huge mistake; I sold for a loss. Instead of going deeper into biotechs I decided to stick with options. I knew I needed to start somewhere, so I took what little knowledge I had and came up with a plan:

Due to my low account balance, I’m forced to follow the US Pattern Day Trader rules. That means I can only intra-day trade the same security 3 times in a 5 day period until my account has 25k+. It sucks there are no real ways around it, but it helps keep me selective and patient.

To get a better idea of what I’m doing, I started trading SPY options on paper. Eventually, I subscribed to to practice virtual trading. Although it helps, you don’t feel the same rush you get from live trading so it feels more like a chore. I still highly recommend paper trading for novice trader because it provides you with stats you can analyze.

Using technical indicators, primarily MACD and RSI, scouring message boards, and paying attention to the market sentiment, I eventually began making 1 trade a day, 3 days a week. To develop consistency, I came up with a list of rules to help me avoid stupid mistakes:


  • DBG- Don’t be greedy! Know your exit points and stick to them.
  • Be careful when buying options before 3 five min candles have developed. 
  • Never try to catch a “falling knife”
  • Use a stop loss if more than 60% of account is in play.
  • Don’t listen to pumpers/dumpers in media. Try to find the trend for your edge.
  • Watch RSI, MACD, MAs, and/or bollinger bands to help find decent entry/exit points. 
  • Don’t hold options overnight unless expiration is 3+ months.
  • Mostly avoid short term OTM options.
  • Ask yourself, “Would an idiot do this?”
  • Be patient.
  • Don’t Chase; those moves are done and the easy money has already been made.

Scalping spy options, 1 trade a day for 3 days a week for 4 months, I double my account size.  I made a few trades that were home runs and guess what happened? I got cocky, greedy, and started breaking my rules. Instead of sticking to what worked for me, I started trying new strategies and chasing the home-run trades. Within two weeks, I gave back 4 months worth of gains. I was eaten alive, but being a resilient and introspective kind of guy, I knew I needed to pull myself together and go back to basics if I was ever going to make it in this twisted game.

I began researching trading psychology and using order flow as an edge; I recommend Sang lucci/ wallstjesus’ Trader’s Hierarchy of Needs video series for a quick crash course in both. I created spreadsheets to calculate my trading stats to see if I could identify the sticking points that were causing me to lose money. I went back to paper trading a couple times a week. Going back to basics allowed me to get over the tough losses because it helped rebuild my confidence. As soon as I went back to trading off my plan, I started making money again.

Although I don’t necessarily recommend my path to anyone who doesn’t have the desire to trade, I do think it is important for everyone to understand the basics of financial markets. Although the market can giveth and taketh, it is a wealth creation engine. Even if you don’t care about trading, understanding markets and securities can help you invest to meet long term goals or help maximize your 401K. Do yourself a favor and take an interest in putting your money to work. If you do want to trade, I’m proof it is possible to make a small but steady profit with less than 1k in the account. Just find what works for you and stick to it.





Path of Exile Lab Runner

The OPOP Lab Runner

People always wonder how to make easy money in Path of Exile. Out of the various ways to generate an income, I enjoy profiting from the Uber Labyrinth. I forget who originally designed the build, but I caught wind of it while watching the poe streamer, blasting_cap.

The build capitalizes on Pathfinder flask abuse, Queen of the Forest, and stacking evasion to increase your movement speed by incredible amounts. Unfortunately, since this is a poison based build, I’m not sure how it will fare in 3.0, so consider that before investing.

To kill Izaro, use Blade Vortex and poison him by activating your flasks. He will melt. Hardcore players beware, this character is evasion and life based and is within 1-shot range. I wouldn’t recommend this for hardcore leagues.

My items are good enough for the basic build, but far from min/maxed. You can still see all the core unique items to make the build by checking out my thread on the poe forum here.

Check out the skill Tree

If you’re unfamiliar with Path of Exile, I highly recommend giving it a chance. The game is completely free to play and has a fantastic community behind it. Check out their website and download the game.

Path of Exile: Ascendancy Cyclone Marauder Build

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Tier 11 Academy Boss

I’ve been playing Path of Exile since open beta, and I gotta say Cyclone is one of my favorite builds. It is able to do nearly every map mod and boss. Since the new expansion dropped, I dusted off my lvl 90 character and checked out the Ascendancy classes.

I went with the Juggernaut Ascendancy class since it gives the build a sweet movement bonus, extra damage, and additional benefits for using fortify. Check out my passive tree here.


With an Atziri’s Disfavour or equivalent endgame weapon, this build has pretty sweet DPS. Using Herald of Ice and Herald of Ash for enhanced clearing:


Path of Exile is a free to play game. Check it out here

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Infinity Plus One

I don’t know if you keep up with theoretical physics, but there are some crazy theories about our universe out there. Some have me thinking about infinity. People a lot smarter than I am say the craziest thing about infinity is how big it really is. Even if you don’t enjoy following the science, you’ve probably heard of the infinite monkey theorem that states even a monkey spending an infinite amount of time hitting random keys on a typewriter will produce the complete works of Shakespeare.  My basic understanding of the theory is this; it supposes, given a random sequence of letters that continues for infinity, all possible combinations of sequences will exist. Since all possible combinations will exist, the combination that spells out Shakespeare’s complete work will exist in it’s appropriate order.  Expanding from there, not only will there be Shakespeare’s work, but every other work of literature ever written and every combination in between.

Now take infinity and add parallel universes and you basically got the Many-worlds interpretation (MWI):

The fundamental idea of the MWI, going back to Everett 1957, is that there are myriad of worlds in the Universe in addition to the world we are aware of. In particular, every time a quantum experiment with different possible outcomes is performed, all outcomes are obtained, each in a different world, even if we are only aware of the world with the outcome we have seen. Vaidman, Lev. “Many-Worlds Interpretation….” Stanford Encyclopedia of Philosophy. Stanford University, 24 Mar. 2002. Web. 14 Jan. 2016.

How crazy is it to imagine for every decision we’ve ever made, there could be a parallel universe in which we’ve done something different? If we apply that same concept of infinite time from the monkey theorem with the concept of an infinite (or near infinite) number of parallel universes with alternate outcomes, it becomes quite the set of possibilities; however, if we’re really living in a multiverse in which all possible combinations are playing out in parallel space-time, we can all comfortably assume there is at least one place in time in which we are meeting our own mortal demise mid-coitus.

American Dream – Free Form Piece

There are two types of people in this world… those who admit they love talking about themselves, and those who lie to our faces. Everyone in this day in age is obsessed with themselves. Social media is more pervasive than ever and as prevalent. It is literally woven into our clothing, marketed to us as watches and glasses and whatever other gadget and gizmo they can throw at us, as long as they can manufacture it cheap enough for mass consumption. I’m not saying social media caused this self-infatuation, or is to blame or anything like that; I’m simply using it as a means to make my point: If a picture is worth a thousand words, and your social media is album after album of selfies, I’m willing to bet you talk about yourself ahhh lot. People are absolutely obsessed with themselves whether or not they admit it. If I can look at your digital footprint and see a trail of vice and personal obsession, finding example after example of shameless, validation-seeking self-promotion, it stands to reason you too are completely obsessed with yourself just like everyone else. We all are and the evidence has never been more clear. From our data comes a narrative depicting who we want to be and what we want to see and what we think will make us better in some way, shape or form. Our rampant self obsession is likely a huge factor in, what seems to be, an explosion in social justice expressed online in near sometimes sickening fashion, all the way up the spectrum to the large number of social movements which include real-life displays of activism attempting to derail malformed institutions designed to keep people down. So is all the self obsession bad? Of course not. It is what drives us all to the highest and lowest points of our own plebeian human experience. We all know what is possible because there are people out there doing it; living the way we wanna live and doing the things we wanna do as we just sit here mustering, coping, and working to find a way to stop being a wage-slave. Find people that make you happy, and find people that make you money; it makes it a lot easier to validate your self obsession regardless of what choices the data says you’re making. It’s the American Dream.

Think about it…

The Title says it All
Why is it so hard to gain support for creating a standard of living in this county? These things should be funded and regulated. Healthcare brings tons of jobs and education with it; it should be encouraged to flourish, not whither on the vine. In the parlance of our times, this just seems like another manifestation of radicalism carried out at the highest level.

America is hailed as a “free country,” protected by its Constitution and government’s checks and balances, and propagated by the spread of democracy and capitalism. In my opinion, we all need to give ourselves more credit towards two freedoms inherent to the bonding trait of our shared human experience:

1. Humans are capable of simultaneously holding conflicting positions about an idea, and that’s OK.
2. Humans deserve the right to make choices that benefit them, to a certain extent.

Regardless of our individual choices, we as people are easily capable of holding conflicting positions about ideas. I’d argue from this ability, we’ve developed moral constraints like laws and ethics, or in this instance, an ability to draw-the-line. For example, we have age restrictions woven throughout out modern social and political environment like voting, driving, sports, religious confirmation, sexual consent, education, student bodies, presidential candidates, drinking, senior-citizenship, adulthood… At age 18 you’re considered an “adult” by American standards. We indisputably treat children differently from adults because we concede they have an indescribably limited life experience from which to draw understanding, and because they are physically incapable of taking care of themselves until they’ve matured. If we can concede to those premises, it doesn’t seem like a stretch to say we can  draw the line as to when a human is incapable of making choices for him/her self. This means it is ok to believe the result of conception is a human, but still disregard its choice to a certain extent because it is literally, physically and mentally incapable of making choices.

If we can concede humans deserve the right to make choices that benefit them, to a certain extent, and if we have already conceded humans can draw the line and disregard ones choice on the basis of him/her being physically and mentally incapable of having one, being pro-choice is ethical and is congruent with the ideological framework of a “free county.”

Understandably, this could be considered a summation of one of the many pro-choice arguments. Honestly, it is sad we still need to fight for this basic standard of living in the year 2015, when so many other industrialized nations have successfully nationalized healthcare in the same, successful way they have education. America is supposed to be “…the land of the free and home of the brave,” so why are we fighting so hard against freedom of choice and our ability to create and uphold a basic standard of living that benefits everyone? Think about it… ‪#‎StandUpForYourStandard‬