Warning: The Hype Artists Want your Money

I made a Google search for recent mentions of  'option strategies' and found some amazing offers. They are so obviously untrue to anyone who knows anything about trading.  However I wonder how effective they are in trapping those who are looking into learning about options for the first time.

Regular readers of this blog don't require the warnings I offer below, but for true rookies,  this message is important. 

  • Please be aware that there is no free money
  • There is no instant gratification in the options world
  • There is much to learn and you can learn it.  But not in one short lesson
  • Options reduce investment risk, when used intelligently
  • Options for Rookies is here to help with your options education


Sampling of what Google uncovered

1)  " Perfect for novice investors…new 90-minute course shows you how to accomplish every investor's goal — how to earn consistent and reliable income from the stock market.

Starting with basics, you'll get a comprehensive plan for investing with options, including: ยท Explosive growth strategies: buying call and put options;  Income strategies: covered calls, credit spreads, calendar spreads, selling puts;  Hedging strategies: puts for insurance, collars for income and protection… you can earn consistent profits with strategies that can be applied to any investing lifestyle and regardless of flat or down markets. Don't wait for the market to move, start making money right now!"

All of that in just 90 minutes.  I had no idea option trading was so simple.  And this deal was offered at a discount! [MDW]


2) Learn The Secrets Of Professional Stock Option Strategies That Create A Consistent Stream Of Cash Into Your Bank Account.  Generate Cash In Just Minutes A Day.

It's even simpler than I thought.  Just 'minutes a day.' Who can resist?

And the money goes directly into my bank account.  That's wondeful because I won't need a broker or pay any commissions.  Gee whiz! These guys are offering the Holy Grail of investing.[MDW]


3) While surfing, this popup appeared:

Learn how I make 5%-10% returns every month.  Get a FREE copy of …

Every Month.  I like that part. No one should ever have a losing month! [MDW]


4) There's an easier way to make money trading options.  Binary Options are a pure and simple way to trade based on your opinion of where a market is headed over a certain period of time. They are contracts that, at expiration, pay out a predetermined, fixed amount… or nothing at all.

What they fail to mention is that the payoffs are far less than they should be.  It's the same as making a 50/50 wager with a bookmaker and collecting $50 when you win and paying $100 when you lose. [MDW] 


Similar examples can be found all over the Internet.  The phrase 'caveat emptor' (let the buyer beware) is especially appropriate for options information.  You can find much excellent, accurate information.  This post represents a warning that there are plenty of people who are not bashful about asking for your money, and telling huge lies to get you to send that money.  Please be careful out there.


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2 Responses to Warning: The Hype Artists Want your Money

  1. Jesse 11/10/2010 at 4:54 PM #

    Hi Mark,
    Thanks for the heads-up.
    There’s indeed no free lunch in this world, one must study and practice hard to earn money especially in options trading.

  2. 5teve 11/11/2010 at 1:06 PM #

    sounds too good to be true. in fact, that was how i get started with option trading. I learned it in the hard way.