What is about option trading that makes me write so passionately about it? In addition to this blog, there are books, magazine articles and a web site. I teach the basics and beyond, explain how to adopt limited risk strategies, preach the importance of risk and money management. I want people to have a more secure financial future, and believe they have a much better chance of reaching that goal by using options to reduce risk while owning stock market investments.
Teaching is not enough for me. I also express my frustrations (outrage) with a system that discourages investors from adopting option strategies.
- Most brokers have taken a neutral to outright negative bias towards options. In recent years, several brokers arrived on the scene, with a distinct bias towards options. They actively promote the use of options and make a strong effort to educate their clients. These include: TradeKing, OptionsXpress, thinkorswim and OptionsHouse, but there are others.
hoping that these brokers will change Wall Street's mindset. The old
school is definitely too old, and out of touch. There's even one broker
(Raymond James) that does not allow clients to use options. Can you imagine refusing to let a client reduce the risk of investing? Do they deserve to stay in business?
- The situation with financial planners and advisors is even worse. Very few know anything about options and that means that options don't exist as far as their clients are concerned. What a loss for those clients!
- Many personal finance bloggers supply great advice to readers: Choose passive investing over actively managed mutual funds. No need to pay fees to managers who cannot do better than the market averages. But they miss the opportunity to make passive investing even better by not educating their readers about the benefits of protecting portfolios with occasional option trades. Those of you who choose to own SPY, QQQQ, or any of the many other exchange traded funds with listed options, can readily adopt option strategies for added safety
I'm not the only voice in the wilderness. There are other bloggers who want to spread the good word about options. They educate and discuss various aspects of trading options. Alas, there are also the hype artists who talk about using options to make great sums of money in a short time. Sure you can use options as a lottery ticket, but why would anyone try to teach investors to gamble? These hypesters charge large sums to teach one or more simple strategies. There are several excellent places where investors can learn those methods for little or no cost.
Those hypesters give options a bad name, and I'm distressed that one them was recently taken over by a reputable broker.
Options for Rookies may be a voice in the wilderness, but if you, readers of this blog, agree with what I'm trying to accomplish, you can help. Encourage other investors to visit this blog. Recommend posts you find worthwhile by linking to Digg or del.icio.us (links below each post).
And more than that – if you have specific topic you would like to see discussed, please make the suggestion as a comment. If you see a post or comment with which you agree, or especially disagree, please feel free to post a comment – explaining why you disagree. Lively discussion is a big part of the education process.
I have strong feeling and express them freely. But they are not gospel, nor are they to be adopted by everyone. I always urge readers to think for themselves and adopt trading methods that place them securely within their individual comfort zones.
I'd like to teach the world to sing trade options. You can help.