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
