Fake Names for Options Trading … a Vacation Special

By Travis Johnson, Stock Gumshoe, August 21, 2008

OK, so the vacation rerun pile is getting a little thin here … thought you might be interested in seeing all of the many ads that have been sent in the past year promising that you can get cash payouts that are better than dividends, and easy as pie.

These ads all tout one version or another of an options trading strategy … for your reading pleasure.

Market Commmissions

Unclaimed Dividends

Transfer Dividends

California Overnight Dividends

Secretive Price Fixing Ring Snatches Cash

Tier Two Equities

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52 Comments on "Fake Names for Options Trading … a Vacation Special"

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PH
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PH
August 22, 2008 8:16 am

Wow Thank You for the Newsletter magazine website !
once again STOCK GUMSHOE RULES!

clicclic
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clicclic
August 22, 2008 8:41 am

Selling covered calls (what all these refer to!) is a dangerous game. I can’t think of anything more dangerous than selling calls naked. Hmm… umm.. besides playing with futures, there isn’t!

Sure, you have the stock but would you really part with it? Better ask yourself that question and ensure your alter-ego gives you an honest answer.

steve
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steve
August 22, 2008 10:00 am

Actually selling covered calls is one of the less
risky options strategies. Selling covered calls is the only options play that you can do with an IRA account. Getting called out of your stock ends in the most profitable outcome for that strategy.

Dick
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Dick
August 22, 2008 2:13 pm

Selling a covered call is equivalent to selling a naked put. Both strategies have exactly the same risk profile. Selling options can be a profitable strategy if you know how to manage the risk you have undertaken, but you are definitely “swimming with the sharks.”

SageNot
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SageNot
August 22, 2008 10:08 pm
At one time Jeff Clark, of Stansberry Research, edited “Advance Income” for under $100./yr. (My last issue is dated 04/08, believe it!) Today the option based income report goes for $4k/yr. It’s much more actively traded of course, but Jeff has been “light’s out” in 2008! According to Porter Stansberry, they might doubled the cost again. For those who are comfortable with this type of income trading, how comfortable are you paying $8k/yr. for the service? For us TA’s, it might work best to use the $8K for the option premiums outright & use our own entry/exits. Just don’t get… Read more »
Curtis
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Curtis
August 25, 2008 2:59 am
Thank you, thank you! I’m new to trading and you have put this all across in the most understandable language yet. I had not heard of Implied Volatility. No one has ever brought that up. Before I begin, I am trying to get a handle on the risk side. But on the time aspect, I just thought that picking a longer expiration date would lessen the risk by giving more breathing space. Your examples were great, re: Purchased calls. Would love to see how it would be different via option selling. Sorry about the paraphrasing. Now, on ‘delta’ I gather… Read more »
spreadtrader
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spreadtrader
August 25, 2008 7:36 am
Remember that option IV may go up or down. The underlying price of the security may also go up or down. But the time value of options will ONLY go DOWN. This is the option seller’s primary advantage. So each day the option seller is making money on that component of the option price regardless of the other option pricing components. In the last 30-45 days until expiration, this advantage is dramatic. However, when I say “time the market” I mean stock pickers who try to time the highs and lows of price swings while disregarding the option’s IV level.… Read more »
Curtis
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Curtis
August 25, 2008 11:39 pm
Ok. I get the theme now. Look at the ‘whole’ picture. The guys who are timing the market are only looking at the stock price, to their detriment. Just like the guy in the earlier examples, who put in 10% to risk, based solely on the input figure and not the potential bigger figure of a loss! I’m getting there. Include ALL risks. Bet small. Spread it out. Yes, I did want to ask of other works of yours, as I’m sure there must be more and not to belabour this point any further. And yes, I have come across… Read more »
JoeMurphy
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JoeMurphy
August 26, 2008 4:30 pm

Actually there are lots of option trades you can do in an IRA; it depends mostly where you have your account. In mine, I can buy calls and puts, and I can sell covered calls. In my brother’s account (different firm), he often sells cash-covered puts on stocks he wants to own.

Vager Skov
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October 23, 2008 4:42 am

Learn more about the Greeks here. Did you visit the site with a free options trading course? – As they say: “You make money whether the market goes up, down or sideways”

Ray
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Ray
February 18, 2009 1:13 pm

Hi spreadtrader,

I am interested in finding some option screening software that you mentioned here. Where can I learn about them?
Thanks

Derivatives Options
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January 2, 2010 9:54 am

I think your passing comment about money management is very significant. I myself have been caught by tipsters’ promises of fantastic returns, only to find that you need to invest the whole of your fund in a winner every time to achieve those results – and they don’t only recommend winners!

Mike Grace
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January 3, 2010 4:53 pm

Hey Spead Trader,

thanks for all the info on Options. These have always fascinated me. Could you email me more about that course you mentioned?

You’re really right that people will waive their flag about wins, and barely mention the losers.

rfydnorg@gmail.com

harobe
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harobe
January 4, 2010 10:27 am

Hi spreadtrader,
Im new here & I just saw the options post.
could you also send me the 3 part comprehensive options tutorial you spoke of?

I have traded stocks & commodities for yrs but more seriously lately.

I am always looking to learn
thanks.

Diane England
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January 4, 2010 1:16 pm
Spreadtrader, I appreciate your posts and would be most grateful if you’d send me your options course. I’ve decided that this is the year I take responsibility for my own money versus allowing others to have their way with it. It is so sad that so many of us, because we were busy trying to make a difference in another area, discovered too late that we’d left the fox guarding the hen house—and were essentially robbed at the midnight hour. By the way, I have discovered that people on the internet who are supposedly wanting to help authors succeed seem… Read more »
Diane England
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January 4, 2010 1:53 pm
Spreadtrader, I appreciate your posts and would be most grateful if you’d send me your options course. I’ve decided that this is the year I take responsibility for my own money versus allowing others to have their way with it. It is so sad that so many of us, because we were busy trying to make a difference in another area, discovered too late that we’d left the fox guarding the hen house—and were essentially robbed at the midnight hour. By the way, I have discovered that people on the internet who are supposedly wanting to help authors succeed seem… Read more »
Chris
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Chris
February 15, 2010 3:13 pm

Think I posted in the wrong place just now…I’m interested in the tutorial…would you please send it? I appreciate your time!

mukesh
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mukesh
June 21, 2010 12:51 am

Dear Spreadtrader,can u also forward me the option course my email is m2051az@aol.com thanks

Darleen O'Shea
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Darleen O'Shea
June 29, 2010 10:38 pm

Hello Spreadtrader, I'm new at learning options trading. Please forward me your 3 part options tutorial. Many Thanks.
Darlenka@telus.net

Andrew
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Andrew
June 30, 2010 6:44 am

Hello Spreadtrader, looking to get back into options. please could you send me your options course – brixton@optushome.com.au . Many thanks, Andrew

Rick
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Rick
July 2, 2010 12:18 am

Hello Spreadtrader,
I too would appreciate your information on option trading.
When you get a chance , my email is walfam@comcast.net.
Thank you for your time and knowledge.

Regards,
walfam

spreadtrader
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spreadtrader
August 23, 2008 12:47 am
I’ll address comments #2-#5. I’ve been trading commodity futures and options on futures for 8 years. It hasn’t given me warts, leprosy or caused me (or my account) to die and go to hell. It isn’t “dangerous”. It has added risk because it involves the magnification of LEVERAGE. However, if you learn to understand leverage and learn to control and manage risk, trading futures is less risky than….blindly following the buy “recommendations” of any newsletter writer in business……..period. It is true that selling covered calls is a reasonably safe strategy that used properly can reduce the cost of trading and… Read more »
Curtis
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Curtis
August 24, 2008 1:29 am

The percentage trade gains, as opposed to the dollar gains, would mean then that they are betting small, correct? So yes, I would be interested to know of these sound money management practices that reduce the amount of leverage used to make real money in these deals. And of course, what you recommend to offset them. Curtis246.

ProBhi
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ProBhi
August 29, 2008 3:13 pm

Is OptionsUniversity (their basic options course is around 350$) a good place to start learning?
Or other options for learing Options?

Thx

Alan Friedman
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Alan Friedman
September 12, 2008 5:20 am

thanks for that informative piece with examples. I still need to read and re-read it to digest the process. I have tried learning options via different internet sites but somehow it hasn’t sunk completely in thru my thick cranium. For example, in and out of the money. So yes, I would be interested and thankful for spreadtrader’s hints. Thanks

david
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david
December 22, 2009 2:30 pm

Could you email me your 3-part course on options.

Thanks.

spreadtrader
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spreadtrader
August 24, 2008 8:19 pm
Just so I’m quoted or paraphrased accurately, this is what I said: “the constraints of sound money management practices in your account prohibit you from employing the leverage necessary to make real money in these trades”. This is what I mean……Let’s say we’re talking about someone with a $50,000 account. Diversification theory says that you shouldn’t put all of your eggs into one basket. So let’s say you’ve decided that adequate diversification calls for you to spend no more that $5,000 (10% of your account) on any one stock. You’ve also decided that for purposes of money management that you… Read more »
spreadtrader
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spreadtrader
August 25, 2008 7:46 am

I guess “Delta” is a Greek letter, not a word. It means “change” I think.

DARIN
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DARIN
October 19, 2008 11:15 am

PLEASE could you forward to me the 3 part series you speak of it may help… thanks 🙂

Frank Mesaros
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Frank Mesaros
March 27, 2009 10:03 am

Could you please reveal your free source for option course? Thanks.

spreadtrader
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spreadtrader
August 27, 2008 4:26 am

I’m sorry, but what you can or can’t do with an IRA depends entirely upon the tax laws. I’m not a tax expert, but I do have an IRA in a commoditiy futures trading account where I frequently sell naked calls and puts using margin. As I said somewhere above, check with your tax advisor.

spreadtrader
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spreadtrader
August 27, 2008 9:36 am

Of course, if a particular broker won’t permit you to do something that you’re otherwise lawfully able to do, that’s a different issue.

yclin6
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yclin6
February 2, 2009 4:52 am

Hi spreadtrader,
could you also send me the 3 part comprehensive options tutorial you spoke of?

Gravity Switch
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August 29, 2008 3:37 pm

I don’t know OptionsUniversity personally (perhaps other readers do), but I would always recommend a thorough review of the free resources first. There are many, I like to suggest that folks start with the CBOE’s “Options Institute”:
http://www.cboe.com/LearnCenter/Tutorials.aspx

spreadtrader
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spreadtrader
August 30, 2008 7:49 am
I’m with the Gumshoe. I like learning to trade for FREE. While the CBOE tutorials are good, I have a comprehesive 3 part options course I’ll GIVE you (I’ll even give it to the Gumshoe). It’s the best FREE resource on options I’ve ever seen. Beyond that, there are books on options too numerous to list. I’ve read a number of them, but I get them for free at my local university business library (great resource). If you come into the forum and find a post with my name on it, whisper me your email address and I’ll send you… Read more »
Craig St.Onge
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Craig St.Onge
January 24, 2009 10:47 am

Hi, could you send me the 3part comprehensive options tutorial you spoke of in August? I was thinking of subscribing to the Jeff Clark service for 3K even though it stretches my budget and now you’ve helped me to reconsider. Thanks very much.

Craig

spreadtrader
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spreadtrader
January 3, 2010 6:25 pm

http://www.optionvue.com/

http://www.optionetics.com/tools/software/optiongear/

http://www.oedge.com/

…I just did a web search for these. I don’t use them, so it’s not a recommendation. The last one is apparently free…..my kind of software (if it works).

spreadtrader
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spreadtrader
January 3, 2010 7:28 pm

…..on their way.

harobe
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harobe
January 4, 2010 10:13 am

Hi spreadtrader,
Im new here & I just saw the options post.
could you also send me the 3 part comprehensive options tutorial you spoke of?

I have traded stocks & commodities for yrs but more seriously lately.

I am always looking to learn more
thanks.

Cary
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Cary
January 4, 2010 12:00 pm

Please send me the 3 part tutorial. Thanks.

Chris
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Chris
February 15, 2010 3:11 pm

Please send me the options tutorial…Thanks so much for your time!

tbfavero
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June 19, 2010 8:31 pm

Hi Spreadtrader. I enjoy your posts. I would like to have the PDF on options trading also, and can you point me in the right direction to get more information on commodities futures trading? Thanks, Tim

Fu3000
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Fu3000
July 2, 2010 11:01 am

Hi Spead Trader,
Thanks for your info and the time you take to all responders. I also would like to recieve the info on Options. My email = gigaveel@gmail.com

Thank you very much!

pat bracken
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January 4, 2010 12:37 pm

many thanks

spreadtrader
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spreadtrader
January 4, 2010 4:12 pm

….on its way.

Thanks for the nice comments.

I think there are two posters above who would like the material but didn’t leave an email address. If they’d like, they can go into the forum and send me a private message with their email address. I’ll be happy to send it along.

Howard Palmer
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Howard Palmer
June 19, 2010 5:07 pm

Please email the comprehensive 3 part options course on pdf to; pier500@sbcglobal.net

Terry
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Terry
June 30, 2010 6:12 am

speadtrader,
I would very much appreciate the opportunity to increase my knowlege of option trading from the course you referenced in your postings.
I apppreciate reading your postings, they are to the point and very enlighting thanks, terry. tandgharper@gmail.com

tbfavero
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June 20, 2010 7:30 pm

Hi Spreadtrader. I sent a message last night about getting your options course, but I neglected to put in my email address. it is: tbfavero@msn.com Thanks, Tim

Rick
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Rick
June 26, 2010 12:14 am

I also would like to receive access to the options course you have offered. Thank you; Rick at rckltz@hotmail.com

Rick
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Rick
June 26, 2010 1:22 am

I also would like to receive access to the options course you have offered. Thank you; Rick at rckltz@hotmail.com

Ura
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Ura
June 28, 2010 5:59 pm

Thanks for your comments. Very educational. I would be grateful if you'd send me your options course to ygerlov@yahoo.com

F.Pallos
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F.Pallos
June 6, 2011 12:53 pm

Hi Spreadtrader !
Could I receive Your 3-part option tutorial ? It would be of great help.
Thank you for your time and effort,it is greatly appreciated.
Sincerely, [e-mail] pallos56@comcast.net

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