After 5 1/2 years writing this blog it is time for me to stop. As I said in previous columns, I am simply tired of providing high quality content for free. When I asked my 800 or so subscribers if they’d be willing to spend $10 a month for a daily options and market education column, I got only 29 replies and of those only 4 said yes. So, there you have it. I think it is a sad development that all content is assumed to be free, regardless of how much work goes into it.
I will leave this site up as both an educational resource and a reminder that my personalised options education business is still alive and well. If you live in the Chicago area I will come to your home or office. For anyone else I use gotomeeting.com for virtual lessons. I am very flexible regarding time and have clients over all time zones.
I do want to thank all of you, Dear Readers, for giving me your time and attention and even putting up with my socio-political screeds now and again.
Let me conclude with what I call Randall’s Reminders, excerpted from my book (available on Amazon) There’s Always an Option: The Theory and Working Method of Exchange Traded Options.
- Buying or selling options outright is not cost effective. Options are best traded in a spread or as a hedge against an underlying value.
- Options are not a good vehicle for day trading. Leaving aside that 90% of retail day traders lose money, option positions take time to mature. That could be days, weeks, or even months.
- Use time, also known as calendar spreads, to trade a “first this, then that” scenario.
- When done properly, a Butterfly is an excellent risk vs. reward directional trade.
- Remember that a covered write (long stock, short call) is in no way different than being naked short the put.
- Keep a trading log. Write down every order and price, entry and exit, or cancellation. And note your reasons for doing so, including what you are thinking/feeling at the time.
- Just as puts can be used to hedge against a move lower, calls can be used to hedge against a move higher.
- Remember that being short straddles and strangles can make you money for 10 straight expirations and blow up your whole portfolio on the 11th.
- When there is nothing to do, do nothing. Never trade out of boredom.