Earlier, I had a motivating talk with an option's investor who is still looking for for the key strategy to earning constant returns with option investing. He understood several things which were so well-known to me also.
The thing in particular that really stood out to me was when he alleged "Non-directional option investing doesn't mean we will produce a return on investment in every direction. It really means that we produce a return if the asset doesn't move in any direction. Another way to look at it, it's really a directional strategy, sideways." This is very true, and most schools say that it's easy to manufacture returns with options simply because we can produce money for every direction the market goes. This is true in some points of view and false in others.
Investors using Condors as their main strategy understand what I am saying here; especially if you are investing in the Iron Condors which most schools and written materials preach. If you are investing with this option spread this year, you most probably aren't earning much. This is because that the Iron Condor is just as directional as the other option spreads only that it's direction is sideways. To most, it's just as difficult to forecast a non-move in the market as it is to forecast market that will be moving.
I have had many calls over the years from people losing huge chunks of their accounts trading credit spreads and condors. They all say the same thing... "I was doing great for several months, and then all the sudden I lost nearly my whole account in one day." I have heard this story over and over again.
This is precisely why I don't preach the normal style of Iron Condors. If you are a couple days from expiration, and the RUT is right up against the sold contract, subsequently you are investing in the same manner as the average investor does. I'm speaking of the one who has very little investor education, and because of this, shortly you'll be telling your buddies a similar story. However, it's a very different story that you'll be telling your wife! You smile today at this, but you won't be showing your pearly whites during a time when it happens in your own trading. Another serious problem with this aggressive style of investing is that the anxiety level can be so elevated that it really destroys your well-being on a daily basis. Many of you reading this know what I am talking about.
Anyway, to deal with this problem San Jose Options Mentoring has redesigned Iron Condors and Credit Spreads. We have a different technique which gives the underlying much more wiggle room, lowering our stress level and keeping us out of dangerous situations. Remember, the less you have to adjust your condor, the better off you will be in most cases.
Besides teaching a safer way to trade Condors, we've also developed techniques to lock-in our profits on them. Most option traders exit their trades when they make a profit, but we can lock-in our profits and stay in the trade.
Also, when we do have a trade go against us, well, we have ways to get a free trade from it. This is another important technique that we teach to our students. While many traders exit with a loss or never exit and sustain a huge loss, we exit and get a free bonus trade that can always lead to returns at a later date.
So, finally I'd like to say that whether we have a winner or a loser, we have some excellent adjustment tricks that will be sure to greatly improve your personal trading skills. - 29971
The thing in particular that really stood out to me was when he alleged "Non-directional option investing doesn't mean we will produce a return on investment in every direction. It really means that we produce a return if the asset doesn't move in any direction. Another way to look at it, it's really a directional strategy, sideways." This is very true, and most schools say that it's easy to manufacture returns with options simply because we can produce money for every direction the market goes. This is true in some points of view and false in others.
Investors using Condors as their main strategy understand what I am saying here; especially if you are investing in the Iron Condors which most schools and written materials preach. If you are investing with this option spread this year, you most probably aren't earning much. This is because that the Iron Condor is just as directional as the other option spreads only that it's direction is sideways. To most, it's just as difficult to forecast a non-move in the market as it is to forecast market that will be moving.
I have had many calls over the years from people losing huge chunks of their accounts trading credit spreads and condors. They all say the same thing... "I was doing great for several months, and then all the sudden I lost nearly my whole account in one day." I have heard this story over and over again.
This is precisely why I don't preach the normal style of Iron Condors. If you are a couple days from expiration, and the RUT is right up against the sold contract, subsequently you are investing in the same manner as the average investor does. I'm speaking of the one who has very little investor education, and because of this, shortly you'll be telling your buddies a similar story. However, it's a very different story that you'll be telling your wife! You smile today at this, but you won't be showing your pearly whites during a time when it happens in your own trading. Another serious problem with this aggressive style of investing is that the anxiety level can be so elevated that it really destroys your well-being on a daily basis. Many of you reading this know what I am talking about.
Anyway, to deal with this problem San Jose Options Mentoring has redesigned Iron Condors and Credit Spreads. We have a different technique which gives the underlying much more wiggle room, lowering our stress level and keeping us out of dangerous situations. Remember, the less you have to adjust your condor, the better off you will be in most cases.
Besides teaching a safer way to trade Condors, we've also developed techniques to lock-in our profits on them. Most option traders exit their trades when they make a profit, but we can lock-in our profits and stay in the trade.
Also, when we do have a trade go against us, well, we have ways to get a free trade from it. This is another important technique that we teach to our students. While many traders exit with a loss or never exit and sustain a huge loss, we exit and get a free bonus trade that can always lead to returns at a later date.
So, finally I'd like to say that whether we have a winner or a loser, we have some excellent adjustment tricks that will be sure to greatly improve your personal trading skills. - 29971
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Want to learn how to lock in your profits?? Better your Option Trading Skills today by visiting San Jose Options Mentoring online at www.sjoptions.com. Visit today and get a Free Video on Option Greeks, a $200 value absolutely free!
