Profitable options system. Writing Options
There were stories of traders risking too much and losing everything, and traders retiring by the age of 25 having made their fortune through skill or luck. Another great story came from my old trading company.
Learn More One day, my boss and another trader got into profitable options system fistfight in the middle of the trading crowd. The fight deteriorated to the point that these two year-old men were rolling on the ground wrestling.
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The story goes that my boss was in trouble as the other man had pinned him down and was repeatedly punching him in the face. Clearly the trading floor is not for the faint of heart.
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Others, like Pete, a trader who worked at my company, make their money quietly. Pete traded in the Enron trading pit.
Options traders, on the other hand, realize a profit can be made in any environment, even when the market doesn't trade up or down. Options contracts are flexible tools that make this possible, though some approaches are as risky and complex as they are versatile. Writing Options One way to profit from options in any market, as well as to employ even more sophisticated strategies, is by writing options. When a speculator writes an option contract, he receives a payment from an investor who purchases it. This payment is known as the premium, and the speculator keeps this payment even if the contract right is never exercised.
For years, Pete made good money simply trading Enron in a conservative manner. However, once the cracks started forming in the Enron story, Pete used the leverage of options to build a massive bearish position. In fact, he slowly made money trading it conservatively until the stock neared 35 in September The stock collapsed in the proceeding weeks, trading at around 10 by early November In fact, our boss begged Pete to lock in his big score and get long.
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But Pete kept his short position, and continued to aggressively buy 10 profitable options system 5 strike puts. Battling Yourself Trading stocks and options is a great psychological battle with ourselves.
Far too often, we sell winners too soon and let losers run too far. Just think about how great it feels to lock in a profit and get that instant gratification—yet these are the trades we should be letting run as far as possible. Even with all of my trading experience, I still fight against myself.
If so, step back and rethink your trading plan … and maybe even think back to the story about Pete, and the greatest options trade I ever saw. Share below. He uses calls, puts and covered calls to guide investors to quick profits while always controlling risk. Post navigation Free Report: How to Hedge Portfolios with Options Once considered a niche segment of the investing world, options trading has now gone mainstream.