Everyone Is Getting Rich Trading Options!
If you ever stay up late at night, or watch TV early on the weekends, you'll often see infomercials on how to get rich trading. Many of these involve options. Two that come to mind are Optionetics and Options Made Easy.
You'll often see free seminars packed with people curious how they too can work two hours a week and make millions on the side. They throw in the proverbial retired sixty five year old woman who just learned what an option was weeks ago and now trades them one hour a day. She is giving her testimonial of course in front of her new ocean front home in Florida with two nice German cars in the driveway. And what is that in the background? Oh, that's her new yacht.
You see this woman, we'll call her Margaret, just learned at a seminar that you can actually make money when the market goes up and down. Apparently this little nugget of information alone nets her 5k a day. OK, time for a quick pan over back to the packed full seminar. Often you'll see an attractive young woman who appears to be reporting live from the seminar floor as if she is giving everyone an injury update during a Monday night football game.
Amazingly, everyone she interviews is just overwhelmed with excitement with what they have just learned. And I mean everyone. There is not one skeptical person in the house. You would think these people are being re-united with lost loved ones they haven't seen in years. Nope. They just learned that when you buy a straddle, you don't care where the stock goes, up or down. Everyone makes money.
Don't tell these people the economy is slowing down. In fact, these seminars alone might be the reason we have seen such an increase in real estate prices all over the country from California to Florida. I always wonder if I'm not seeing the exact same people on all these infomercials. Some of them look familiar from the "buying real estate with no money down", and "how to make millions buying and selling on Ebay" infomercials.
So what gives? Is this really an elaborate hoax played on the unsuspecting public? Are these people paid actors giving a performance that would make even Robert Deniro proud? Or perhaps there is some truth to what we are seeing but there is some slight of hand being performed. You know, the way Michael Moore can make a documentary based on facts with no facts actually being presented.
One thing is for sure. People are making money trading options. I don't know if the people at these seminars are, but they sure seem happy. And that's what it's all about right, being happy? If money is just a means to becoming happy, well then I guess these people are already there. They have reached their goal. Whether or not they have made a dime trading options or they are just happy to get out of the house and be in a room with 500 other people searching for the same answers, is really irrelevant. They have found their holy grail. That is starring in a television infomercial. Now we return you to your regularly scheduled infomercial already in progress.
You'll often see free seminars packed with people curious how they too can work two hours a week and make millions on the side. They throw in the proverbial retired sixty five year old woman who just learned what an option was weeks ago and now trades them one hour a day. She is giving her testimonial of course in front of her new ocean front home in Florida with two nice German cars in the driveway. And what is that in the background? Oh, that's her new yacht.
You see this woman, we'll call her Margaret, just learned at a seminar that you can actually make money when the market goes up and down. Apparently this little nugget of information alone nets her 5k a day. OK, time for a quick pan over back to the packed full seminar. Often you'll see an attractive young woman who appears to be reporting live from the seminar floor as if she is giving everyone an injury update during a Monday night football game.
Amazingly, everyone she interviews is just overwhelmed with excitement with what they have just learned. And I mean everyone. There is not one skeptical person in the house. You would think these people are being re-united with lost loved ones they haven't seen in years. Nope. They just learned that when you buy a straddle, you don't care where the stock goes, up or down. Everyone makes money.
Don't tell these people the economy is slowing down. In fact, these seminars alone might be the reason we have seen such an increase in real estate prices all over the country from California to Florida. I always wonder if I'm not seeing the exact same people on all these infomercials. Some of them look familiar from the "buying real estate with no money down", and "how to make millions buying and selling on Ebay" infomercials.
So what gives? Is this really an elaborate hoax played on the unsuspecting public? Are these people paid actors giving a performance that would make even Robert Deniro proud? Or perhaps there is some truth to what we are seeing but there is some slight of hand being performed. You know, the way Michael Moore can make a documentary based on facts with no facts actually being presented.
One thing is for sure. People are making money trading options. I don't know if the people at these seminars are, but they sure seem happy. And that's what it's all about right, being happy? If money is just a means to becoming happy, well then I guess these people are already there. They have reached their goal. Whether or not they have made a dime trading options or they are just happy to get out of the house and be in a room with 500 other people searching for the same answers, is really irrelevant. They have found their holy grail. That is starring in a television infomercial. Now we return you to your regularly scheduled infomercial already in progress.
posted by John at 9:10 AM
12 Comments:
Hello! Finally got connected.
By golly.
It looks like this works.
I don't know how you did it Charlie. I tried to create a user account and I wasn't sure how you could do it without going through the process of setting up your own blog. Obviously it was easy for me because I set up the blog. So what did you did to finally get it set up?
This comment has been removed by a blog administrator.
Here is what I think transpired.
I went to the first link(set up your own blog).
I filled in a user name and password.
I went no further.
I enterred the afore mentioned user name and PW.
AND
I was in.
There has to be an easier way.
Looking at a simple trade.
I like energy stocks however I like current yield and am not excited about buying them at the current price.
Specifically - don't mind getting a 5% return if I acquire the stock.
Looking at Exxon Mobil(XOM).
Sell the July 50 put for say $2.00.
Commision $1/contract
Would accept being put the stock at $48.
Would accept the yield of 16+% I see OptionVue suggests.
This being done in a retirement account no tax considerations.
Am I missing something?
Details found using trade finder.
My overall trading goal is +15% return after tax.
XOM has delivered a compound 20.4% return for the last decade. it's dividend goes up almost every year. you don't even need to fool around with options to enhance this one. it could easily be a core holding in a retirement account for the next decade or two.
selling puts to purchase at a lower price is a decent strategy - especially if you think the current stock price is over-extended. but what happens if the stock goes to 55 or higher by July. you've pocketed the put premium but missed out on the appreciation and a couple dividends as well.
if you think the price is too high right now you could buy the stock and use a collar to protect your downside while still giving some upside appreciation.
michael
how come you never see an infomercial that shows how to get rich slow. i'm in no particular hurry - i'd just like to be there someday.
Regarding the XOM trade. Maybe combine what Mike is saying and also sell the puts. Say you own 1,000 shares of stock. Put a strangle around half of it. Sell 5 front month puts and sell 5 out OTM calls.
If you lose half the stock then you just keep selling the puts underneath till you get it back then sell another 5 calls. This way you always have 500 shares of stock to collect the dividend and participate in the upside and also at the same time generate income on the option premium.
I don't like collars because the credit is too small and you eliminate all your upside. I don't think you need too much downside protection anyway in XOM. Like Mike said, that stock is a great stock to own over the next two years.
Well, it looks like Monday will be DDay for APPX. Stock has been halted and is up $5. Hard to believe somebody did not know something.
I am posting this message on all the forums so just bear with me here. In order to make sure we have some type of continuity on the flow of posts. The best way to post is simply to post under the latest article. I think this will make things easier since we don't have a regular message board. If people post under different articles, I'm worried that responses might be ignored. If you have to, you can make reference to a previous post and under which article it was if it's a follow up. I hope this helps things run smoother.
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