Chris Rowe

Another Reason to Trade Options

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THE AMERICAN NIGHTMARE

I want to introduce you to Bob O'Shea, a 50-year-old ex-retiree from New York City. He started an entertainment company with only $50 in the bank when he was 20 years old, and built the business brick-by-brick through good economies and bad.

Over 30 years, he dealt with hundreds of employees -- some good relationships and some awful. Through blood, sweat, tears and endless sacrifice, he built a solid company. At the end of his long ride, another company offered to buy him out for $80 million in cash. Bob still owned 60% of it, so his take was $48 million.

That's what I call the American dream.

In this economy, retirement and family time sounded just lovely, so he sold without blinking! His attorneys settled the deal and wired $48 million to his bank account. What could go wrong?

As he was driving his 12-year-old Buick home after closing the deal, Bob's mind was racing. He thought to himself: "Should I stick the cash in the stock market? Bonds? Commodities are doing pretty well lately. I wonder what gold's trading at these days?"

Then he slowed the car down, strapped on his seatbelt and checked his side- and rearview mirrors.

"Let's calm down," he thought to himself. "There's no need to be risky here since I can probably make a couple million a year just on the interest. Let's be smart and just keep the cash in the bank for a few months where it's safe, and then we'll decide what to do with it."

He drove past his bank, which I'll call "ShmindyShmac Bank."

"Ah, there it is. I should definitely go negotiate a better interest rate next week," Bob thought.