What It Takes To Be a Successful Investor

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Professional options traders are a different breed.

We take a statistical, mathematical, rational approach to the marketplace. We add another layer of probability and risk control that could not be possible with stocks alone.

We make bets on things like volatility and don't always care which way a stock or ETF moves. Everything we do is at least partially hedged, which reduces the need for Maalox, Prozac and most importantly heavy drinking, which many of my stock-trading buddies rely on almost daily.

If this sounds interesting to you, read on. It's entirely possible for you to learn to trade options as well, and manage at least a portion of your portfolio in this manner.

I try my best to teach my strategies to anyone willing to listen.

Why?

Because it is important to me that options become a part of the everyday conversation. They are so incredibly valuable, yet many investors do not want to invest the time to learn how to use options effectively.

It could be because options have been wrongfully portrayed as risky and highly speculative - this is 100 percent false.

I use a methodical approach to trade options. There are SO MANY shady options operations out there - let's call them the pretenders - just trying to bring people in with a gambling mentality. I can't tell you how many options-based newsletters I have come across that take an irresponsible approach to options.

This is not how we do things here.

The pretenders only give those of us who use options in a responsible manner a bad name. The so-called guru who only trades straight calls and puts and has no clue how to create a spread based on statistical advantages; or more importantly, how to effectively use risk-management techniques that are vital when trading options.

So how do we do things here?

My two options strategies consist of credit spreads coupled with straight calls and puts. They work in harmony. I pick my spots carefully.

Patience is the key ingredient to my success and I will never stray from that approach.

I never force a trade.

My goal is the bottom line and the bottom line is to make money over the long-term.

Many of my subscribers over the past decade have read all of the above before - but it bears repeating to drive the point home and get my message and mission out to new readers.

This discipline is why my options strategies have been successful and will continue to be successful.

Today, I turned on the TV and listened to the talking heads. Then I sat in a call and listened to more talking heads - and they all say the same thing.

They all try and guess which way the market is going to move next.

I don't care which way the market moves. This is the beauty of options. I pick spots based on high-probability set-ups and then I move back to cash once the trade is complete.

While Wall Street is in panic mode the diligent options trader is waiting patiently in cash, because cash IS a position. One day investors will learn this simple, yet effective, method of investing.

Yet many people seem to want to hear a guy in a suit talk about the markets, discuss topics they read in the WSJ and learned at graduate school. They want to listen to the same people and techniques that led them to heavy losses during every market downturn.

But how many of these talking heads actually make money? How many liquidate their positions and move into cash? How many even know how to use options to hedge their portfolios? Not many.

If you indeed agree with my sentiment, come join me. Allow me to teach you how I use options to make money over the long-term. Allow me to get you excited about using options in your portfolio.

And most of all, allow me to help you make money over the long-term.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

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