Stop losing on your stock option trading today -- by learning about the
truth experts don't tell you:
Stocks
beats options
Stock option trading impacts
investors' investment return like never before. Stock option trading
offers you, the individual investors, the riskiest yet potentially very
profitable investment system.
So yes ... you can make money
-- in fact a lot of money through stock option trading.
But the other side of the claim
is also true -- you could lose a lot of money.
In summary, what stock option trading can do for you
... I'll show you that you can do the same with just stocks -- and with much
less risk.
You can be profitable over 90% of the
time, and still go bankrupt
Stock option trading WILL
destroy your investment if you do not practice moderation.
You can be right over 90% of
time, and still have a losing investment
system. You can make 100% on nine trades and then go bankrupt on the
tenth trade. Yet, you are still 90% accurate.
Consider the following scenario:
You invest your money in five sequential positions one after
another. One case you are investing normally in stocks. The other case
you are investing through stock option trading hoping for eye-popping returns.
Here's what happens:
| |
Stock Option Trading |
Stock Investment |
| First Position |
50% return |
10% return |
| Second Position |
100% return |
20% return |
| Third Position |
25% return |
5% return |
| Fourth Position |
75% return |
15% return |
| Fifth Position |
95% loss |
20% loss |
Take a look at most stock
option traders' track record, you will probably see a very similar pattern.
Take a look at any of the stock option trading newsletter services, their
track record will also be very similar.
"Gurus" lost it all, on a regular
basis while claiming 15% average profits every trade
So after four consecutive stock option trading, you have
attained a whopping 556% return -- by re-investing your profit like all the
gurus said on their "salesletter." Whereas, your stock investment only
returned a measly 59% return.
However, after the fifth stock option trade, we lost 95%.
This is very likely in stock option trading -- experienced trader have quite
a few of this periodically in their track record, too.
The "gurus", in fact, have many
more catastrophic losses in their "options" newsletter then normal.
This is a logical side effect because they are always striving to find next
"super" options play.
I know because -- as newsletter
publishers, we monitor other newsletters' trades to know how others are
performing.
So the fifth trade sets us back
to a measly 32.8% return -- while our stock investment returned 27.5%.
However, considering the risk-to-reward
ratio, our stock investment is a 5 times better investment.
Stocks beat options
Now consider this scenario:
To limit catastrophic loss on
your
portfolio, some "options newsletters" ask their subscribers to use portfolio allocation.
Portfolio allocation minimizes
losses while dampening profitability by not investing more than x% on any
position.
1% on any options position is
a widely used proportion -- while 5-10% is used
for conventional stocks.
Let's think this now carefully
...
With a ten times smaller
allocation size for stock options, your overall return affected by any
one of your option position is also ten times smaller!
Your options need to consistently beat
stock investment by ten times to at least match profitability side of stock investment.
For a 20% return on one stock,
you need 200% for one option.
For a 40% return on another
stock, you 400% for another option.
Whereas a trailing stop can be
used to very consistently stop your stock losses at 20%, your options are
very likely to lose over 90% in just one day.
When you put the risk side of
the investment into consideration, then you need 50 times better return than
stock investments. So... Let's finish with a question...
Why do you think there is no one
on the any of the "rich people" list who obtained their wealth through stock
option trading?
