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.
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.