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Buy to open: Buying an option contract to establish a new position, becoming the buyer of the option. After becoming the buyer, you have two ways to close the position: one is selling to close, and the other is holding until expiration and deciding whether to exercise based on the situation.

Sell to open: Selling an option contract to establish a new position, becoming the seller of the option. After becoming the seller, you have two ways to close the position: one is buying to close, and the other is holding until expiration and deciding whether to exercise based on the situation.

The four steps of option investing.

1️⃣ is expectation, understanding your own view on the market—whether you expect a big rise or a big fall, or whether you don't expect a rise or don't expect a fall;

2️⃣ is strategy selection, in the options market, once you have an expectation, you can find a corresponding strategy, for example, expecting a big rise corresponds to buying a call option;

3️⃣ is opening a position;

4️⃣ is closing, for positions opened by buying, you can hold until expiration, or you can close the position by selling to close. — "3-Hour Quick Start to Options"

Contract elements: include expiration date, expiration month, settlement method, strike price, contract unit, etc.

Contract pricing: consists of intrinsic value and time value. Factors affecting option value mainly include stock price, strike price, volatility, remaining term, risk-free interest rate, dividend yield, etc.

Contract classification: If exercised immediately, making money means in-the-money, breaking even means at-the-money, and losing money means out-of-the-money. —《A 3-Hour Crash Course in Options》

The Five Major Uses of Options:

- Risk Transfer: When investors hold the underlying stock and worry about losses from a price drop, they can buy put options for insurance, locking in a minimum future selling price. If the stock price falls, the investor can still sell the stock at the agreed-upon price.

- Big Results with Small Capital: Using a small amount of capital to leverage a long position on the US dollar and a short position on the Japanese yen, achieving the effect of "big results with small capital."

- Harnessing the Wind: During their holding period, investors can leverage the power of options by selling call options to enhance returns on their stock holdings.

- Multi-Dimensional Warfare: Whether the market surges, crashes, or moves sideways, as long as we have our own expectations, there are corresponding option strategies to help us achieve the desired returns.

- Precision Strike: The more precise and insightful your view of the market, the more money you can make through options. — "3-Hour Crash Course on Options"

What are options:

- Option: A contract that represents a future right;

- Call option: The right to buy something in the future.

- Put option: The right to sell something in the future.

- European option: The buyer can only exercise the right on the expiration date.

- American option: An option where the right can be exercised on any day before expiration. —《3-Hour Crash Course on Options》

The core of profitable trading lies in:

The patience to wait,

The courage to open a position,

The guts to go heavy,

The fortitude to hold,

The decisiveness to $Rocket Lab(RKLB.US).

The older I get, the more I feel that each day is precious, and the more I can ruthlessly "declutter". Looking at the things around me, my behaviors, and the people I know—if they don't add value to my life, I decisively "declutter"; if they do add value, I pursue them decisively, and the more, the better. —"Simple Wealth"

Money and debt have two functions: a medium of exchange and a store of wealth.

. Debt is one person's asset and another person's liability.

. Debt is a promise to repay a certain currency (e.g., USD, EUR, JPY, MXN, etc.).

. Holders of debt assets believe that debt can be converted into currency and then into goods and services. Therefore, they are highly sensitive to the relative changes in the loss rate of the currency's purchasing power (i.e., inflation rate) and the compensation rate for the loss (i.e., interest rate).

. Central banks can only create the currency and credit they control (e.g., the Federal Reserve can only provide USD and USD-denominated credit, the Bank of Japan can only provide JPY and JPY-denominated credit, etc.).

. Central banks and free-market borrowers and lenders are interdependent, and over time, they typically create more and more debt assets and debt liabilities.

. The larger the total debt, the greater the challenge for central banks. Central banks need to balance pressures from different directions to prevent debt imbalances and avoid the economy falling into deflationary or inflationary depressions.

. In a debt crisis, policymakers (i.e., those who control monetary and fiscal policies) can usually balance these opposing forces because they have the power to redistribute the debt burden, but sometimes the balancing effect is not ideal.

. Central banks often alleviate debt crises by massively printing more of the currency in which the debt is denominated. While this stimulates investment asset spending and the economy, it also weakens the exchange rate (all else being equal).

. If a country's exchange rate falls more than the decline in its currency's interest rate, holders of debt denominated in that currency will lose money. If investors believe that a country's exchange rate decline cannot be compensated by high interest rates, it is very unfavorable for the country's exchange rate trend. — Big Debt Crises

The recovery of economic vitality and capital formation is often slow (even in a harmonious deleveraging process), usually taking 5~10 years (hence the term "lost decade") for real economic activity to reach previous peak levels. —"The Big Debt Cycle"

Characteristics of a bubble:

(1) Asset prices are high relative to traditional standards.

(2) Market expectations that current high prices will continue to rise rapidly.

(3) Widespread bullish sentiment.

(4) Use of high leverage to finance asset purchases.

(5) Buyers purchase assets well in advance (e.g., increasing inventory, signing supply contracts, etc.) for speculative purposes or to hedge against future price increases.

(6) New buyers (previously uninvolved in the market) enter the market.

(7) Stimulative monetary policy further fuels the bubble (while tight monetary policy causes the bubble to burst).

—Debt: The First 5,000 Years

1. Buying stocks is buying a company.

2. The most important thing about a company is its business model, and being able to understand the moat of this business model and the cash flow it will generate in the coming years.

3. Don't do what you don't understand.

—"Duan Yongping's Core Views"

Proletarian workers earn money by selling their time, while capital investors make money by 'lending' their right to use money in exchange for the debtor's promise to repay the principal and interest, business ownership (which we call equity or stocks), or other assets (such as real estate). —Debt: The First 5,000 Years

Once the debt-to-income ratio reaches its limit, the aforementioned process reverses. At that point, asset prices fall, debtors struggle to repay, investors become cautious out of fear, sell off debt, or refuse to extend debt. This, in turn, leads to liquidity issues, forcing people to cut spending. Since one person's spending is another's income, reduced spending inevitably leads to lower income levels and diminished creditworthiness. Falling asset prices further squeeze banks, while debt repayment amounts continue to rise, leading to even greater spending cuts. Companies lacking credit and cash reduce expenditures, causing stock market crashes, heightened social conflicts, and rising unemployment. The vicious cycle reinforces itself, making it difficult to reverse the economic contraction. Excessive debt burdens must be reduced. During recessions, central banks can lower interest rates and increase liquidity to ease monetary policy and improve the ability and willingness to lend. However, during depressions, since interest rates are already at or near 0% and cannot be lowered further, conventional policy measures can no longer increase liquidity or capital. — Debt: The Big Cycle

During the upward phase of the long-term debt cycle, despite people being heavily indebted, lenders can still freely provide credit. This is because the upward phase of the debt cycle is self-reinforcing: increased spending leads to higher income levels and rising asset values, which in turn enhance borrowers' ability to borrow, further increasing procurement and consumption expenditures. Almost all market participants are willing to take on more risk. New financial intermediaries and instruments are often not subject to regulatory oversight and protection, making them more competitive, capable of delivering higher returns, assuming higher leverage, and providing loans with greater liquidity and credit risk. Due to abundant credit, borrowers often overspend, creating an illusion of prosperity, and lenders become complacent due to the favorable conditions. However, this phenomenon is unsustainable. The growth rate of debt cannot forever outpace the funds and income available for repayment, so debt problems will inevitably arise sooner or later. — "The Big Debt Cycle"

In most cases, short-term debt cycles cause small-scale booms and recessions in economic development, while long-term debt cycles lead to major booms and depressions. —《Big Debt Crises》