Chris Rowe

Options: What Your Broker Doesn't Want You to Know

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Right off the bat, I want to say this isn't about "that dirty rotten, stinkin', bad old broker." Brokers and money managers, please know, I'm just going to slowly make readers understand the things that motivate your actions -- other than just making the client money.

One of those things includes making yourself money. Yes, you have a right to do what you can to get paid, too! It's a free market and a free country and I won't hate the players … but I will hate the game.

Options Can Buy Your Freedom

Ever since I started trading options, my life got a lot easier. And that's not only because I've been making all kinds of money doing it, but because I don't have to deal with all the stress. 

It really comes down to living the lifestyle I want to live. If your broker, your money manager, or whatever professional you rely on is keeping you from doing that, then it's time for me to step in here and "pull some cards," so to speak. 

I worked on Wall Street from 1995 to 2004, and what I'm going to tell you is not my opinion; it's fact. They will usually try to discourage you by saying options are risky or that you don't qualify to trade them. 

Investment professionals who know options, trade options -- not stock. And they want you to trade stock, not options.

Why?

1. Your investment professionals, as individuals and as corporations, are running a business and want high-profit margins. 

This means they want to get the best bang for their buck by spending as little time as possible explaining things to you, or having someone explain it to them so they don't sound foolish or make mistakes.

Options trading is just one of those things where you keep finding out more and more at every corner you turn; it blows you away and you want to know more. Ask anyone who took the initial steps of learning about options; they will probably say the exact same thing.

This puts a burden on the investment professional because you might be a Level-II options trader (i.e., you can use more-advanced strategies in your account), and given what you realized you can do so far, you start to ask lots of questions about additional strategies. (Learn more about option approval levels.)

Why open that can of worms as an investment professional?