by Ken Trester 07/03/08
Around the office, everyone's abuzz with how their fantasy baseball teams are performing, and many have already taken in a few "real" games. The 162-game season will undoubtedly be full of highs and lows for the players -- both real and fantasy -- which is a lot like options trading.
The old Wall Street adage "never be afraid to take a profit" does not exactly apply to options. Even though, particularly in volatile markets, we sometimes need to take the money and run, my overarching goal for you is to hit home runs -- not singles.
In general, you can't afford to nickel-and-dime your way to profits with options.
Like any good coach, I tell it like it is. I don't think you'll hear this from many other professional options traders: Most options expire or lose most of their value.
My winning average (and my subscribers') is about 50% (compare that to the worldwide average percentage of winning options trades, which is only about 10%), and my goal is to never take more than a 50% loss on any individual position.
But, we're not here to take losses, and there is a silver lining -- no, make that a golden lining. Trading options can be highly lucrative, but you need to use my strategy.
Leverage Your Options Investments
Learn how to properly wield the power options provide to keep your trading account in-the-black.
Trade Options with 'Fun' Money
Options can be so inexpensive, it's hard to remember that you're playing with 'real' money.
A Little Risk, A Lot of Happy Returns
While stock investors spent $18,000 on a position in DPTR and got a 20% return on their investment, we bought its options and made a whopping 140% gain on a $1 investment!
Options Prices Can 'Jump' in the Night
Options don't trade overnight, but strange things can happen to their prices between today's close and tomorrow's open.
