Myth #1: Options trading is risky.
Truth: It can be for the uneducated. For those who understand these instruments, options is a way to actually reduce risk in trading. For those who master their strategies, options provide for a very lucrative income stream. Learn before you earn.
Truth: It can be for the uneducated. For those who understand these instruments, options is a way to actually reduce risk in trading. For those who master their strategies, options provide for a very lucrative income stream. Learn before you earn.
Myth #2: Options are difficult to understand.
Truth: Like everything, the more effort you commit to learning, the better your understanding. You do not need to know everything; only enough to make them work for you. Actually, it is not that difficult at all, provided you have a strong mentor.
Truth: Like everything, the more effort you commit to learning, the better your understanding. You do not need to know everything; only enough to make them work for you. Actually, it is not that difficult at all, provided you have a strong mentor.
Myth #3: Traders must be familiar with many stocks and strategies.
Truth: Not so. Master just one or two great strategies using one great stock. Learn the nuances and behavior and you can make an excellent living trading it several times a day. Keeping it simple is key to progressive accumulation of wealth using options.
Truth: Not so. Master just one or two great strategies using one great stock. Learn the nuances and behavior and you can make an excellent living trading it several times a day. Keeping it simple is key to progressive accumulation of wealth using options.
nuances and behavior and you can make an excellent living trading it several times a day. Keeping it simple is key to progressive accumulation of wealth using options.
Myth #4: Options trading is only for professional, experienced traders.
Truth: Options trading is now mainstream for the masses, especially in the last few years. Traders of stock see the benefits of lower risk, lower investments and higher leverage with options. Computerized trading platforms give ready access to both.
Truth: Options trading is now mainstream for the masses, especially in the last few years. Traders of stock see the benefits of lower risk, lower investments and higher leverage with options. Computerized trading platforms give ready access to both.
Myth #5: Options trade execution is a rip-off.
Truth: The belief is that market makers have the system rigged whereby only they were doing the trading, stiffing the retail traders. Fact is, technology eliminated this archaic order flow system with various exchanges transparently competing for the same order.
Truth: The belief is that market makers have the system rigged whereby only they were doing the trading, stiffing the retail traders. Fact is, technology eliminated this archaic order flow system with various exchanges transparently competing for the same order.
Myth #6: Options create market crashes.
Truth: It is greedy bankers and operators that drive prices. Options can actually hedge against such bubbles. The famous Dutch tulip bubble of 1637 was the first with the rare Semper Augustus tulip bulb hitting about $2,500 U.S. before the market sobered up.
Truth: It is greedy bankers and operators that drive prices. Options can actually hedge against such bubbles. The famous Dutch tulip bubble of 1637 was the first with the rare Semper Augustus tulip bulb hitting about $2,500 U.S. before the market sobered up.
Myth #7: Trading options is a function of greed.
Truth: Quite the contrary. Since the recent market collapse, more investors are taking an active role in their financial futures instead of enabling their guru to lose their money. The astute trader uses options to protect capital, increase income and exercise control.
Truth: Quite the contrary. Since the recent market collapse, more investors are taking an active role in their financial futures instead of enabling their guru to lose their money. The astute trader uses options to protect capital, increase income and exercise control.
Myth #8: This is not a good time to invest in the market.
Truth: Using options, traders can make money in either bull or bear markets. Unlike stock that seeks to profit in equity growth, successful options traders are just as comfortable buying and selling, selling and buying in both directions as trends develop.
Truth: Using options, traders can make money in either bull or bear markets. Unlike stock that seeks to profit in equity growth, successful options traders are just as comfortable buying and selling, selling and buying in both directions as trends develop.
Myth #9: Trading options is akin to gambling.
Truth: Perhaps true for the uneducated. The investor/trader seeks growth in the market or in the overall wealth of the economy to benefit. Gambling on the other hand, is a zero sum game, merely redistributing wealth from loser to winner. Another myth debunked.
Truth: Perhaps true for the uneducated. The investor/trader seeks growth in the market or in the overall wealth of the economy to benefit. Gambling on the other hand, is a zero sum game, merely redistributing wealth from loser to winner. Another myth debunked.
Myth #10: You must spend thousands on trading courses to be successful.
Truth: One could easily spend that but most often, such courses tend to up sell you to more courses. Find a mentor who cares about your trading, properly assesses your needs and coaches you all the way. Such instructors are worth their weight in gold.
Truth: One could easily spend that but most often, such courses tend to up sell you to more courses. Find a mentor who cares about your trading, properly assesses your needs and coaches you all the way. Such instructors are worth their weight in gold.
Trader Hugh is a successful, full time options trader and trainer. Learn but one strategy well and you could make an excellent living. As part of training, Hugh provides 'one on one' sessions and Live Trading.
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