Recently, I had an important chat with a stock-option manager who is still seeking for the mysterious formula to yielding dependable returns with option investing each month. He mentioned some things which were so obvious to me and brought up many past memories.
The thing in particular that really stood out to me was when he alleged "Non-directional option investing doesn't mean we will produce a return on investment in every direction. It really means that we produce a return if the asset doesn't move in any direction. Another way to look at it, it's really a directional strategy, sideways." This is very true, and most schools say that it's easy to manufacture returns with options simply because we can produce money for every direction the market goes. This is true in some points of view and false in others.
Investors using Condors as their main strategy understand what I am saying here; especially if you are investing in the Iron Condors which most schools and written materials preach. If you are investing with this option spread this year, you most probably aren't earning much. This is because that the Iron Condor is just as directional as the other option spreads only that it's direction is sideways. To most, it's just as difficult to forecast a non-move in the market as it is to forecast market that will be moving.
Over the last few months I have had many phone calls from option traders losing most of their trading capital with Condors and Credit spreads. They all have said one thing in common: "I was making great returns at first, and then one day, I lost most of my money." I've heard this tale many a time.
This is precisely why I don't preach the normal style of Iron Condors. If you are a couple days from expiration, and the RUT is right up against the sold contract, subsequently you are investing in the same manner as the average investor does. I'm speaking of the one who has very little investor education, and because of this, shortly you'll be telling your buddies a similar story. However, it's a very different story that you'll be telling your wife! You smile today at this, but you won't be showing your pearly whites during a time when it happens in your own trading. Another serious problem with this aggressive style of investing is that the anxiety level can be so elevated that it really destroys your well-being on a daily basis. Many of you reading this know what I am talking about.
Well, we've addressed this aggressive trading style at San Jose Options Mentoring. We've redesigned Condors and Credit Spreads. Our technique gives the underlying more room for the price fluctuation, giving us breathing room in our trading as well as in our lives. We find the less adjustments we have to make, then the more we bring home at the end of the month.
Our safer method of trading speaks for itself, but we have also developed another method that is very exciting to share with you. For most option strategies we trade, we now have a way to lock-in the profits and stay in the trade to make more. This is a great technique to use as an investor.
Furthermore, if we ever have a Condor move against us, then we have developed yet another technique which gives us a free bonus trade! So, even though we may have a bad month once in a while, at least we get an excellent, free trade from it where most traders just take the loss and move on.
So, finally I'd like to say that whether we have a winner or a loser, we have some excellent adjustment tricks that will be sure to greatly improve your personal trading skills. - 23309
The thing in particular that really stood out to me was when he alleged "Non-directional option investing doesn't mean we will produce a return on investment in every direction. It really means that we produce a return if the asset doesn't move in any direction. Another way to look at it, it's really a directional strategy, sideways." This is very true, and most schools say that it's easy to manufacture returns with options simply because we can produce money for every direction the market goes. This is true in some points of view and false in others.
Investors using Condors as their main strategy understand what I am saying here; especially if you are investing in the Iron Condors which most schools and written materials preach. If you are investing with this option spread this year, you most probably aren't earning much. This is because that the Iron Condor is just as directional as the other option spreads only that it's direction is sideways. To most, it's just as difficult to forecast a non-move in the market as it is to forecast market that will be moving.
Over the last few months I have had many phone calls from option traders losing most of their trading capital with Condors and Credit spreads. They all have said one thing in common: "I was making great returns at first, and then one day, I lost most of my money." I've heard this tale many a time.
This is precisely why I don't preach the normal style of Iron Condors. If you are a couple days from expiration, and the RUT is right up against the sold contract, subsequently you are investing in the same manner as the average investor does. I'm speaking of the one who has very little investor education, and because of this, shortly you'll be telling your buddies a similar story. However, it's a very different story that you'll be telling your wife! You smile today at this, but you won't be showing your pearly whites during a time when it happens in your own trading. Another serious problem with this aggressive style of investing is that the anxiety level can be so elevated that it really destroys your well-being on a daily basis. Many of you reading this know what I am talking about.
Well, we've addressed this aggressive trading style at San Jose Options Mentoring. We've redesigned Condors and Credit Spreads. Our technique gives the underlying more room for the price fluctuation, giving us breathing room in our trading as well as in our lives. We find the less adjustments we have to make, then the more we bring home at the end of the month.
Our safer method of trading speaks for itself, but we have also developed another method that is very exciting to share with you. For most option strategies we trade, we now have a way to lock-in the profits and stay in the trade to make more. This is a great technique to use as an investor.
Furthermore, if we ever have a Condor move against us, then we have developed yet another technique which gives us a free bonus trade! So, even though we may have a bad month once in a while, at least we get an excellent, free trade from it where most traders just take the loss and move on.
So, finally I'd like to say that whether we have a winner or a loser, we have some excellent adjustment tricks that will be sure to greatly improve your personal trading skills. - 23309
About the Author:
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