Encouraged by a recent blog post by Michael James (Michael James on Money), I've been looking for just the right term to describe a style of options trading that could receive positive attention from the media. However, the term must be original and not be used elsewhere.
The first term that occurred to me was SmartOptions. Alas, it's already in use as the title of a newsletter published
by Big Trends.
I don't have access to their track record, but the methodology used to
make option trades does pass my 'smart idea' test. In fact I blogged
about the methodology they use (when buying options choose ITM).
I'm looking for a phrase that may make the use of options as a risk-reducing tool ('OptionHedge' is available) more attractive to the huge segment of the population that either ignores options or has a negative attitude towards option trading. Many have no idea why they distrust options or why their feelings are negative. I'd suggest that most of those impressions are based on media stories. Over the past couple of years, all derivatives and derivative trading stories involved financial disasters, making bad press well deserved.
However, using options as we do at Options for Rookies bears no resemblance to the trades made with credit default swaps or other newly invented derivatives. It does not make use of 40:1 leverage that makes a financial collapse far more likely than the use of a sane amount of margin.
I'd like to restore options good name, but it probably never had one. Thus, my goal is to find a way to present options in a favorable light. The primary goal is to attract new investors into the options arena.
Most of the older brokers do not encourage options trading , and one (Raymond James) forbids its customers from using options. In recent years several new brokers opened for business, and each is dedicated to educating option traders. Some have the word 'options' in the corporate name; others don't. But the success of these brokers has not been enough to overcome the bad image that options still have among the trading public.
The few of us who play the no-hype game when writing about options attract a loyal readership. But the huge majority of people who have money in the stock markets of the world are, and remain, options illiterate.
I'm hoping to make a dent into that situation.
The next phrase/name I considered was TradeSmart, but there is a 'university' and software using that name.
Then I thought that the whole negativity behind options trading is that too many people compare options trading with gambling. By that I mean making a blind wager with no idea whether it's a good or poor bet. So I tried 'Safe Options.' When I searched for that word pair, I discovered a web site by that name that recommends safe option strategies. Sounds good.
When I took a look, and noted that the primary strategies are covered call writing and its synthetic equivalent, the sale of cash-secured puts, I was again discouraged. I have nothing against these strategies. In fact, I believe in using them as an educational tool for people who are first learning how options work.
And it's true that these methods are safer than owning stock (buy and hold). But, 'safer' is not 'safe.' These strategies provide plenty of risk when markets fall.
Even eHow.com got into the act. This site that tells visitors how to 'build just about anything,' had an article on 'safe options.' Once again it discusses covered call writing.
I admit that my first book was subtitled A Conservative Strategy for the Buy and Hold Investor, and it is about writing covered calls. But I never called the strategy 'safe.' It is what it is, and it is safer, or more conservative than buy and hold. It increases the chances of having a profitable trade and cuts the frequency and size of losses. But the risk of a large-loss is always present, and I would not want to get my investment advice from anyone who considers covered call writing to represent a 'safe' way to invest.
So here I am with no satisfactory idea. Thus: a contest.
Contest
Suggest a name, phrase, or ? that I can use to describe option trading that satisfies these criteria:
- It's honest. No hype allowed ("Win with Options" is hype)
- It's not trademarked or copyrighted
- It reasonably short
- It presents options in a positive light
- It makes a good 'slogan' or tag line
If possible, but not required, use the phrase in an appropriate manner: In a sentence, as a tagline, as a headline etc.
I have no idea how I will
judge this contest, but I want the phrase to appeal to me.
I'll keep this contest open for 10 days. Entries must be submitted before midnight CT on Sunday, June 20, 2010. The only way to enter is to post your idea as a comment on this post.
Prize: One year subscription to Expiring Monthly magazine.
If the winning idea turns out to be something that is of practical value and can be used as hoped, I'll try to find a suitable bonus prize.
713
The idea that popped immediately to mind upon reading today’s blog post
was “Sane Options.” Perhaps “Sane Options” is insufficiently positive, but it certainly lends itself to taglines such as “Making investments safe in a mad world,” “Eschewing the crazy talk,” and “Derivative discussion without the hype.”
Excellent suggestion.
I love your tag lines.
“Options Done Right”
“Uncertain Times Need [or Require] Options”
“Options For Uncertain Times”
“Options – Helping You Sleep at Night”
“Trouble sleeping at night? Try options. Less side-effects than sleeping pills.”
“Options – Preventing account blowups since 1987.”
“Options – They’re not just for crazy people.”
“Options – Sane people use them too. Learn how to the safe way.”
“Mad Options Money with Mark “The Wolf” Wolfinger!” (couldn’t resist)
–Josh
Options Peace of Mind
Peace of Mind Options
Portfolio Protectors
(seems from a quick search these names aren’t taken)
“Options [or Puts] – They keep working while the market sleeps.”
“After the closing bell [or 4pm] stop losses stop working. Options work 24/7.”
–Josh
Josh,
Some good ideas. That 1987 reference is great.
I got a big chuckle out of your suggestions – The Wolf vs. Cramer!
thanks
Mark, long time reader (within a month of the start of your blog) first time commenting. How about “Options for Everyone” don’t know if it’s in use or not but everyone involved in the market could benefit from some smart option usage.
Josh
Nice to hear from you!
That idea certainly covers a lot of people. And that’s the idea.
Regards
How about “Protect yourself! Use options!”
Rajesh
Since I think the average person on the street thinks of options as punting tools, how about linking them with a concept that everyone understands?
“Option Insurance” – You insure your house and your car, learn how to insure your nest egg.
Hi Mark …
These are the 1st ideas to pop into my head
1) ” enhance and protect ”
2) ” Know your options well ”
3) ” the path of many options ”
4) Option Answers to profolio questions
My favorite is #1 . Used wisely they do just that
Fun contest …. hope to come up with more suggestions !
Thanks David,
I also think it’s fun
- Options for Protection and Profit
- Options for Profits and Preservation
- Optionality and Rationality
(or some variation thereof…)
OptionProfits
Mark,
Depending on how you see using the concept, what about “Investing.Hedged.” or “Trading.Hedged.”
“The Options Doctor” or some knock-off such as:
The Options Doc; Dr. Options; OptionsDoc
The way we should use options as risk management tools for our investments are analogous to the role of our doctors, who:
- evaluate our current condition
- determines risks and benefits of alternative actions
- provides a recommended approach
- identifies the risks of not following a particular course of action.
Generally speaking, doctors are highly respected as advisors on our health matters. Likewise, options should be respected as viable risk management tools for our investments.
Thanks to everyone for the fine suggestions.
Keep them coming.
Jeff: There is already a ‘risk doctor’ and there is also Dr. J (Najarian).
But this is a different idea. Good explanation of the term.
Account Armor[y]
Options Truth [or] True Options
“Busting myths about options.”
“Know your options.”
“Options – Using the greeks to hedge against… the Greeks.” (target audience probably wouldn’t get it)
“In these troubled times more investors are lowering their risk with options. Is your portfolio protected?”
(or something similar that plays on people’s conformity bias… saying that most people are doing something is backed up by research as being more persuasive than saying not enough people do something)
“Don’t leave your retirement up to the market. Use your options.”
Josh,
True most won’t get it – and it will get outdated. But ‘use the Greeks to protect against the Greeks’ is classic. Nice idea.
“Sensible Options”
“Options – Handle With Care”
“Wise Options”
“Options – The Final Frontier”
Thanks,
It’s a fun contest… and the prize is a good motivator as well!
“Has your portfolio lost it’s nice figure? Get it back in shape with the Options Exercise Routine.”
Josh,
I LOVE the first part. This is clever, but Exercising options is usually a poor choice. Any alternatives?
“Get it back in shape with options! No exercising needed!”
or… “No need to exercise!”
…maybe something relating a healthy old age with the value of exercise, and contrasting that with the usually detrimental effect of exercising options for a retirement account, then something like “Learn how to generate income and protect your retirement from the market’s whims. No hype and no gimmicks.” Too long for a quick tagline but maybe for longer ad copy.
Nice one!
A for effort
Hi Mark, how about
“Options Trading: Winning a Zero Sum Game”.
Cheers
I like winning a zero sum game. Good idea.
The problem is that this sounds like one of those unkeepable promises.
Cheers
“Naked straddles? Collars? Adjusting positions? Options don’t need to be as complicated as the Kama Sutra. Learn safe, simple strategies to reduce risk and generate income.”
Probably too risque but the alternative I had in mind involved strangles, iron condors, and heavy metal so I went with this one.
Josh,
Your suggestions have given me something I did not anticipate when running this contest: chuckles.
Thanks for the humor and the excellent(not all) ideas.
Thanks Mark… hopefully you get something useful out of this contest.
How about? “What Are My Options”?