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GROW YOUR WEALTH SELLING OPTIONS! WITH A THREE-PRONGED TRADING SYSTEM THAT PRACTICALLY ELIMINATES THE RISK OF LOSS! Join the thousands of option traders that are cashing in on the options trading explosion. Learn the use of stock options as an investment tool to achieve steady, consistent returns in up and down markets. Be an option seller and discover how a disciplined program of selling options will surely and definitely grow your capital over time or give you a comfortable second income source. Use my option selling system and earn 30% to 60% annual returns! ===============
THE MECHANICS OF OPTION SELLING
80% OF STOCK OPTIONS EXPIRE WORTHLESS!
Statistically, and this is a well-known fact, 80% of all options expire worthless. Most options decay to the point of no value at expiration. If 80% of options lose value at expiration, it stands to reason that those who sold them made money! This is absolutely correct! Option sellers, or option writers as they are more commonly called in the industry, make money when the options they sold are not exercised by the option buyer on or before the expiration date. The option writer makes money by patiently waiting for the option to lose its value due to time decay. As an investor employing the technique of selling options you will place yourself in the shoes of the option seller and take advantage of this statistical fact. Based on this you may therefore conclude that most of the options you sell will decay and be winners at expiration and, the premiums you collected will accrue to you as profit. Now isn’t that a beautiful statistic working in your favor?
ODDS ARE STACKED IN YOUR FAVOR!
As you know there are three ways a stock may behave. Its price may go up, it may come down or, stay flat and not move at all. The options tied to the stock follow the same actions. Of these three, the option writer is a winner in two. If you are a put seller and the stock to which your options are tied to go up in price or stay flat you will be a winner. You will be a loser only if the stock’s price drops to a level below your strike price. In many cases, even when the stock goes down in value (if you’ve written puts) but it does not drop low enough to hit your strike price, you are still a winner. For this reason many option players add two more stock behaviors for a total of five. These are: the stock or option may stay flat, it may rise a little, it may rise a lot, it may drop a little, it may drop a lot. Of these five, assuming you are a put seller, you are a winner in four and can only lose money if the stock price drops a lot. You are a winner even if the stock drops a little giving you winning odds of four out of five situations!
THE LOGIC OF SELLING OPTIONS
In their book, “The Complete Guide To Option Selling”, which is a highly recommended reading, the authors, James Cordier and Michael Gross, present a very good analogy of options selling. I would like to reprint here a slightly edited version of their write-up about the analogy of option selling as it relates to going fishing in a fishing hole loaded with catfish and bass. This may be a bit lengthy but it presents a perfect example of how the options market works and how the option seller profits from the market’s operations. It actually makes for an amusing reading as well. Here it is:
Suppose that you and I went down to a fishing hole filled with catfish and bass. You toss a fishing line in the water. The hole is primarily a catfish haven, with 80 percent catfish and 20 percent bass. I offer to pay you $1 up to $100 for every bass you pull up, whereas you must pay me $1 for every catfish you pull up. The $1 to $100 prize for the bass will depend on their weight and will command prices of $2 or $3 or $4 or $5 and so on up to a monster size that will command a $100 price. Since the bigger the bass the fewer there are in the fishing hole, I am more than willing to take $1 for each catfish while you try and catch a trophy bass. Chances are that you will pull up eight catfish and two bass and the bass sizes will more than likely be the $1 kind. You’ll pay me $8, and I’ll give you $2 back for your bass. I will end up netting a hefty $6 profit.
Soon many anglers hear about the trophy bass in the fishing hole paying high prizes for anglers lucky enough to catch one. They are especially interested in the highly touted monster bass, a few of which lurk in the dark water below and pays a prize of $10, $20 up to $100 to the angler who hooks it.
The anglers line up at my hole to pay me $1 for every catfish they catch. I generally have to pay them $2 out of every $8 they pay me. Sometimes I only have to pay back $1. Sometimes, if somebody has a “hot streak,” I may have to pay back $3 or $4. However, I almost always come out ahead at the end of the day.
Occasionally, someone will catch a trophy bass. In this case, I have to pay back $10 or $20 against my $1 bet. The trophy bass causes much excitement. The newspaper comes and snaps pictures. More anglers and some people who have never fished before see the picture in the paper, get very excited, and stuff their pockets with dollars and come running down to our hole to pursue the elusive trophy fish. This brings me even more business and makes me happy, for alas, most of them catch catfish and put dollars in my pocket.
Chances are very good that the person getting paid $1 for each catfish caught (the option seller) will have most of the money before long. But most anglers will not bet on the catfish. Most don’t want to bet on catfish. Most want the chance to catch the big or “monster” fish and bet $1 to make $3, $5, $20 or even $100.
This is an analogy of the strategy of option selling and how most brokers and traders view it. The anglers chasing the “monster” bass are option buyers. Lured by big gains, they throw their line in the water (enter a long option trade) with only a 20 percent chance of catching a bass (having a winning trade). Their chances of catching a bass that pays anything significant is even less. This is before they study the weather, select bait, and choose the area of the hole to which they will cast (analyze market conditions, fundamentals, technicals and strike prices). The fishing hole is the exchange.
In his book "The Complete Option Player" Kenneth Trester, one of the foremost authorities on options, has this to say: To the option player, option writing is the Cadillac division of the options market. The profit potentials are greater than in any other segment of the options market. The option writer can generate from 50% to a 100% return annually on his investment, and normally can do this consistently over a long period of time. Trester offers a similar analogy illustrated by James Cordier and Michael Gross but using a casino instead of the fishing hole. He says: The casino operator backs the bets of the gaming customers. He pays off when the customers are big winners; he takes in the profits when they are losers. The casino operator has a slight advantage in each game. In the game of roulette, for instance, he has approximately a 5% advantage over the gaming customer. The option writer is in a similar position, but his advantage is better than 5%. The option writer (seller) actually has approximately a 10% to 20% advantage over the option buyer. The option writer, like the casino owner, provides the option buyer with a market in which to speculate, in which to gamble. For this service, the option writer receives better odds.
For the individual who has sufficient funds and is looking for a high return with fairly low risk selling stock options may be the answer. One very nice feature of this strategy is that your capital (cash) is not actually expended in the process. It is only held by your broker as “good faith” money or “insurance” to serve as some form of ‘collateral’ as required by securities regulations. The industry jargon for this “good faith money” is “broker’s maintenance margin”. With most brokers your cash or, maintenance margin, held in your brokerage account earns interest at prevailing money market rates. This is yet another small way the system allows you to earn additional income from your invested capital.
The trading system that is discussed here is based on the strategy of using the decaying characteristic of options to the investor’s advantage. Specifically it is the selling of puts and calls with the intention of letting the options expire worthless thereby allowing the investor to pocket the option premium obtained in the sale.
HOW I GOT STARTED IN OPTIONS
My name is Daniel Mollat. I have been involved with the stock market and its derivatives for over thirty years. When I started dabbling in the stock market in my mid twenties my main objective was to find an investment system or trading strategy that would give me decent returns and yet be a safe investment for the long haul. Even at that young age I was already concerned with long term planning in my financial future being that I didn't belong to a well-to-do family and I knew I had to fend for myself in my struggles through life. I must admit that over the years I’ve encountered many disappointments and, on occasions, incurred losses as I stumbled and recovered in my learning process. My objective of finding the Holy Grail of investments eluded me constantly but I can say that in the process of my long search I gained a wealth of knowledge about the securities industry and its derivatives.
For a long time I did investments in the stock market and while I was fairly successful in this, with winnings slightly ahead of losses, the end result over a period of time was no better than if I had just left my money in treasury bills or other money market instruments.
Then I tried commodity futures trading for a while and quickly discovered that this arena is strictly for professionals who are deeply immersed in the world of commodities. Amateurs like me had no business being in commodity futures. Finally I got into stock mutual funds. For a while these were much better than direct investments in individual stocks and I was pleased with the returns. But during downturns in the economy and the stock market, mutual funds could take as bad a beating as the market. So on with my search for something better.
It was in the eighties when I discovered stock options. The wealth building properties of stock options truly fascinated me and for the next several years option trading was my main investment vehicle. During the hot market of the nineties my option’s trading activities rode the crest of success until the stock market collapse of 2001-2002. The trading systems that I successfully employed during the hot market days just didn’t work anymore and I suffered some losses during this recessionary period. I was trading mostly long positions and it never occurred to me to look at the other side of options trading, and that is, being the seller instead of the buyer of options. During the recessionary years of 2001-2002 I began seriously looking at the strategy of selling options. Since then my primary investment vehicle has been the selling of stock options.
During the past five years I have been using my option trading system so successfully that I’ve decided to share the strategy with the general public by writing a ‘HOW TO’ booklet and make it available to whoever may wish to engage in this lucrative investment system. The end result is a booklet appropriately titled: “STOCK OPTIONS: THE GREATEST WEALTH BUILDING TOOL EVER INVENTED”. I’ve written it in the form of an e-book so that it could be easily downloaded from a web site in the net.
The option selling program outlined in my e-book is the result of my own trading experience selling options over the past five years. In 2001, before I developed this trading system, I suffered heavy losses when the stock market declined by nearly 30 percent in a period of ten months. If I had then had the option selling system described in my e-book and used it during that time period, not only would I have been able to weather the storm but I would have come out winning in the end. I back tested my system to that period and you can see the results here. You can also see my actual current trading performance by visiting the Past Performance Page on this site. You will understand the effectiveness of the system when you come to the part in the e-book where I present actual trading illustrations to demonstrate the use of the three-pronged trading system.
HOW DOES MY SYSTEM DIFFER FROM OTHERS?
It is my intention to make selling options available to everyone who has some knowledge of stock options trading without the need for the individual to be knowledgeable in the fundamentals or technicals of the stock market or its derivative options. I myself, even to this day, continue my option selling activities without bothering to look into the fundamentals and technicals of market behavior.
Every book on option trading strategies have the authors recommending trading techniques based on the trader’s perception of market direction. What they are saying is that you should use the trading strategy that would work best with the way you anticipate the market’s movement. But it’s impossible to predict the market! It has been said, and I fully subscribe to this thinking, that “the stock market is a random walk down Wall Street”. As I said before, I invested in mutual funds for many years and I can tell you there are very few, if any, funds that beat the market consistently year in, year out. What does this tell you? That despite the millions of dollars at their disposal for research and studies even the most highly paid investment experts working for mutual funds cannot predict the market’s direction with infallible accuracy. My option selling system is designed for the investor to trade options in reaction rather than in anticipation of the market’s behavior. You will see the meaning of this as you follow the trades illustrated in STOCK OPTIONS: THE GREATEST WEALTH BUILDING TOOL EVER INVENTED. Even the highly paid experts in the financial world can’t predict the market with consistent accuracy, so how can you and I, non-professionals, even attempt to do so? My trading system is based not on how we foresee market direction but on the assumption that we don’t know where the market will go and we trade only in reaction to its movement not in anticipation of it.
Furthermore, of the many books and articles on option selling there is one thing that I find missing in all these materials. I have not found a book that describes in great detail what an option seller should do when the market turns against him. Notice I underline the words great detail. While all materials on the subject of selling options do mention some corrective measures when negative forces come into play there is not one that goes into a methodical and thorough explanation of what steps the option seller should take in a reversing market. STOCK OPTIONS: THE GREATEST WEALTH BUILDING TOOL EVER INVENTED addresses this very important issue with much detail and gives actual trading illustrations of what to do. In short, the e-book offers a step by step handholding experience of how to avoid taking a loss in the event that the market moves against the option seller.
How much would an opportunity like this be worth to you? Would you pay $200, $400, $700 or even thousands of dollars to hire a consultant or personal instructor to guide you and teach you the rudiments of selling options? Some would do this and become very successful after several hand holding sessions with a professional. But many of you could not afford this or, perhaps you could, but would not be willing to do so if you are skeptical about the system. While there are dozens of books on the subject of selling options none offer you such detailed step by step description of the option selling process as does STOCK OPTIONS: THE GREATEST WEALTH BUILDING TOOL EVER INVENTED. This e-book will make you an option seller and enable you to grow your capital steadily at returns of 30% to 60% annually, or you can use the system to generate a very decent second source of income.
For more information or further clarification visit the FAQ page for answers to many questions commonly asked about this system. Or if you wish to read articles about naked option writing click here.
The e-book is available at a very affordable price of
only $29.99
MONEY BACK GUARANTEE If after reading the e-book you decide it's not for you I shall refund your payment less Paypal fees of $1.47. Please allow 48 hours processing time for refund requests.
GET YOUR COPY RIGHT NOW! YOU CAN DOWNLOAD THE E-BOOK IMMEDIATELY AFTER CLICKING THE BUY BUTTON BELOW AND MAKING YOUR PAYMENT
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