Blog Overview

One of the  nice features of writing a blog is that I get to present my ideas on how you can learn to use options conservatively and profitably.  But, it's also gratifying to receive comments and questions from readers.

Because it's an effort for new readers to try to catch up with everything that's been previously posted, today I'm listing some of the more important items contained in this blog.

Here's a summary of my trading philosophy.  If it makes sense to you, you can benefit from this blog.

I believe options should be used to reduce risk, and not for gambling purposes.  To that end, I recommend six specific strategies for learning how to use options.  As you learn more and gain experience, there are other methods that you may prefer.  One such strategy is the calendar spread.

When you begin trading options, it's important to understand that you cannot earn a profit on every trade and that sometimes it's important to take a loss and let it go.  As a trader, your goal should be to avoid large losses and thus, emphasis must be placed on risk management (also this).  That means not being greedy, not taking too much risk, and not being stubborn when facing a loss.

When trading options, I strongly believe that these are the important rules to follow – and in this sequence:

1) Don't go broke.  Protect your assets
2) Make money
3) Build wealth
4) Never, never forget rule #1

There's more, and you can browse the blog to find articles of interest.  but if you agree that safety come first and that you'd like to use options to enhance your returns and not as a get-rich-quick, idea, then you are in agreement with my general approach and I hope you''ll benefit from this blog and post comments, questions, and suggestions.

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2 Responses to Blog Overview

  1. Zack 10/20/2008 at 2:31 PM #

    Your articles are brilliant, but have you come across this scenario?
    I wish to put on a bull call spread, with a long ATM put for protection
    Take this scenario, for SPY December 2010s
    60/140 cal spread will cost 40 – 3 = 37
    60/140 bull put spread will cost -4 + 46 = 41 (actually, how much do I post as collateral for this trade?)
    with those basic calculations, lets say I have 37 of today’s dollars at risk with these trades, if SPY should fall to below 60.
    A long ATM 100 Strike put is close to $20, so paying $20 to protect $37 does not make sense.
    Am I being too greedy to wanting upside potential and protection on the downside?
    Cover call or naked put does not offer me the higher returns I am looking for, but it does help on the downside I suppose.

  2. Mark 10/20/2008 at 6:55 PM #

    Reply as a separate post: Oct 21, 2008