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Charles Sachs has utilized S&P 100 for the past 14 years, both as a trader and an advisor. He uses 24 proprietary indicators in order to structure options strategies which can generate gains whether the market moves up, down or sideways.
Option trading can deliver exceptionally high returns with limited risk if you have a disciplined approach. Unfortunately, as many as 90% of all persons buying options lose money.
There are two very good reasons why most retail option investors lose money:
1. Traders lose money because options are a depreciating asset. This means that options lose value with the passage of time. Since options lose money with each passing day, the purchasers of options are at a mathematical disadvantage; they lose money if the security underlying their option stands still, and lose even more money if the security underlying the option moves against the bias (up or down) of their option investment.
While it is not impossible to be profitable with the purchase of options despite this mathematical disadvantage, it is statistically unlikely to be profitable over time. It is fairly easy however to offset the time depreciation element in options by setting up your trades properly. Essentially, you want to be a seller of time premium when you use options. Having time work to your advantage shifts the odds of success in your favor. I will be discussing the proper manner to utilize options today at an online trading seminar at 11 a.m. EST.
2. Most traders lose money because they are too eager to trade. They can't do the most important thing: weigh the risk/reward of each trade before executing it.
Impatient traders and "expert advisors" with very few exceptions deliver nothing but significant losses. The reason why most option traders are unprofitable is that they trade too frequently. The truth is: The most successful traders are the ones who know when to sit on the sidelines and pick their spots. Patience is the key to making very substantial profits, and doing so on a consistent basis.
Bottom Line:
Successful option trading requires utilizing the time depreciation elements of the options to your advantage by structuring one’s trades to profit with the passage of time. Additionally options investors should only undertake an investment in a patient manner, and with a written game plan..
Again, I will be giving an online options seminar today at 11 a.m. EST. to discuss more fully the proper approach for trading options.
Sincerely,
Charles Sachs
Editor
PatientTrader.com
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