Several years ago I stopped trading stocks all together. After more than a decade in the market I just stopped buying and selling shares of companies. That isn’t to say I stopped playing the stock market, though. Far from it.
No, I’m not talking about trading the indices. I was doing that too, but that’s not where I’m going with this.
You see I realized at a certain point that actually owning the stocks I was trading was a waste of resources. It was incredibly inefficient for my stock strategy, which is basically a swing trading approach (holding periods of days to weeks) or maybe a bit longer-term than that. I had too much money tied up in the market and couldn’t control my risk quite as precisely as I could have done.
I made the decision at that time to switch entirely from buying and selling stocks to trading exclusively in their options. Now I’m quite well educated on options. I know all about what they are, how they can be combined in spreads, ways they can be used to play just about any kind of market scenario you can imagine, and the methods used to price them. I’ve been around the block a few times in that regard.
I also know that most options expire worthless, implying that only option sellers (writers) make any money.
Despite that, I began employing a very simple option strategy that worked exceedingly well. I’ve stuck with it ever since and don’t see myself going back to buying and selling individual shares ever again.
What to find out what my strategy is? I’ve prepared a new Easy Stock Option Trading video to outline it. Don’t worry if you don’t know anything about options. The video includes an introduction to option trading. Check it out and tell me what you think.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
** See John’s full bio.
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