I learned end-of-life options by chance while browsing the pages of the ancient Exchange and Mart magazine in 1995. A full-page article shows how an options trader can work from home (actually in bed) using BBC teletext prices. back in the Day. Much has changed, but options have existed for centuries before the dates used to price shipping. In the 1980s, options were traded on the stock exchange and fortunes were made. Warren Buffett is an avid options trader, Nassim Taleb was the most prolific. They are not idiots like you, if you have read so far.
Investing is the word we use for a deal that went wrong! Investing is mostly passive and requires you to be upright and / or stock up for decades. As markets reach new heights and valuations stretch, you need to realize that the stock market cannot continue to grow. If you are happy with the insignificant dividends and the certainty that at some point in the future your shares will cost half as low today, then read no more. QE is no longer on the table, and that’s all that separates stocks from realistic estimates.
So what are the options? In our world, we only trade in FTSE100 options. Why? Because it is unlikely that the entire index will be arrested for fraud / sexual harassment / false accounting / toxic products, as well as for all other filth that can destroy the company’s representative in one pulse. So FTSE is the foundation on which our derivatives are based. Options are the right to buy or sell the base product (the stock market price is £ 10 per cash point), but NOT the obligation. In the same way that insurance companies collect premiums, however, options can be sold. Have you ever seen a bad insurance company? When done right, sales options can bring you a steady monthly income stream of a comfortable 2% per month. Nothing else is approaching.
So who are the buyers of options, if everyone sells them? Well, that’s the biggest part of education and the reason I’ve been trading profitably since 1999. Yes. I had failures and panic – but I had good profits in February, while the market fell by 10%, although it was a bit weak! I learned about the options from an expensive course and much of the free online training. Some time ago I met a like-minded options trader, he runs the website I contribute to every week, with real trading and general trivia about our world. It is extremely mind-boggling when you begin to understand the options and the endless combinations and 20 or more strategies we use. I love options trading and I want to reach those who are looking for income and a sensible method of risk management, but who do not know where to start. It’s not just for beginners – there are insights for everyone. And we do not I want my money.