While the majority of traders hope to make a profit trading options, we take a more business like approach and hope has nothing to do with it.

Trading options to us is entrepreneurial. We take advantage of market opportunities, build positions, manage a portfolio and generate profits trading options based on:

Fundamental Business Principles and Market Truths

We are not investment advisors or financial planners, we are retail investors like you. We do not not manage money and we do not make recommendations on any stock or option investment. We trade our own accounts.

Our purpose for establishing our training program and this website is to provide education to retail investors like us who want a smarter, simpler, less stressful and more profitable way to trade even with limited capital.

Business Principles:

We pursue opportunities in the market and then manage those opportunities based on the numbers.

All successful businesses manage their activities based on certain ‘numbers’: key ratios, profit and loss, conversions, overhead and more. That’s what we do: manage our investment business ‘by the numbers’.

When a number is ‘off’ we dig deeper into our business activities to see where the problem lies and make adjustments to our portfolio so that we generate the maximum amount of profits for the capital we invest, just like any good and successful business.

The only thing that matters in business is ROI (return on investment). In our type of business, we regard ROM (return on margin) as our ultimate goal. That is the name of the game and we never deviate from it becuase the numbers never lie.

The Only Truths of the Market:

For stocks there is only ONE Absolute Truth:

1. All stocks fluctuate in price.

For options there are only TWO Absolute Truths:

1. All options fluctuate in price.
2. All options expire.

The top traders in the world learn to respect these rules because they are the only truths of the market.

You might think there are other truths but there aren’t – everything you hear about the market outside these 2 rules is hearsay, opinion, commentary and even complete fantasy.

We are investing as entrepreneurs – we watch for opportunities, create a plan for trading activities based on solid business principles, plot our expected ROM (return on margin) and then manage those trades by the numbers.

How Do We Trade This Information?

We take these Market Truths and design a trading strategy which means taking advantage of market opportunities and building positions and portfolios around them. As we know it’s impossible to predict the future and that the market can be irrational and cause large losses at times for the average retail investor… So instead of predicting market behavior we create”fluid” positions that are managed and adjusted according to market conditions so that we are always allocating capital as new opportunities present themselves.

The one art most retail investors are not taught is how to adjust positions once they are placed. Learning the art of adjusting trades is the insiders edges over retail investors- but not any longer. Once you learn how to adjust a trade so that it makes money (instead of losing money) you will be amazed at the results.

All businesses have risks. In this business there are 4 risks but the risks can be managed. And, it takes 15 minutes – sometimes less – a day to manage these types of positions.

If you’re interested in learning more about how we trade as a business and get information on our home study course we have developed, watch the videos that are available on this site – no email address or registration is required. Ans when you’re ready to learn the EXACT way to trade for monthly profits and with total confidence… go here to sign up for our course:

Options Made Easy: Your Video Guide to Profitably Trading as a Business

On this blog, we will provide free videos on an occasional basis so if you’re interested in getting notified when they are available sign up with our newsletter.

Al-Quds Index Increases by 3.63 pts
NABLUS, September 5, 2010 (WAFA)- Palestine Securities Exchange said, today, that the trading volume for Sunday, September 05, 2010 reached a total of traded shares 162,663 for a total value of 3,515.34, executed through 128 trades.
Read more on Palestine News Agency

PSE: Al-Quds Index Increases by 1.34 pts
NABLUS, September 2, 2010 (WAFA)- Palestine Securities Exchange (PSE) said today that Trading Volume for Thursday, September 02, 2010 reached a Total of traded shares 2,644,768 for a total value of ,992,002.54, executed through 165 trades.
Read more on Palestine News Agency

Mural


Image by wblo
A mural over the entrance to the Kansas City Board of Trade.

Read more on Bloomberg

The Finance Markets, Which Central Bank is Right

With the three major Western currency blocs acting in different ways to the current fiscal, growth and inflationary problems it will be educational to look back and analyse which was correct. One Bank has been slashing rates, one holding steady and the third looking to tighten spending.

With Federal Reserve rates around 2%, about half the inflation rate, we can see that the Fed is more concerned with growth than with fighting inflation. For holders of cash and short term bonds the decay in the absolute value of your assets is running (after tax on income) at around 2.5% a year. This slow but constant devaluation of overall net worth is now affecting just about every single asset class in America. With the ongoing USD weakness it is not unreasonable to assume the average American citizen is significantly poorer this year than last.

To be fair, the US is, by and large, pretty insular economically, socially and politically. In such an economy the affects of such a damaging raft of conjoining events can be mitigated to a certain extent. However, in the end, the general decay of personal spending power in global terms must start to affect overall growth.

In the UK the Bank of England is taking a different line, one of passivity, neither trying to fight inflation aggressively nor attempting to boost growth. The Treasury and Bank seem to be following a “Let’s Wait and See” plan. If banking crisis knee jerk reactions are almost certainly the wrong ones this amazing inactivity may eventually prove to be the correct path to follow. Having said that it does appear sometimes that Mervyn King is doing little while Rome burns.

The European Central Bank. The uber hawks. Jean-Claude Trichet et al seem content to throw entire economies to the wall in their never ending search for 0% inflation. Much is written about the events in Frankfurt contributing to a possible break up of the Euro but the currency is now so imbedded into the various Eurozone economies that it would be virtually impossible, now, to break out. As Simon Denom of Capital Spreads put it, “For all of the fulminating of the Mediterranean members over the current intractability of the central bank and the loud threats of ‘I can always leave if I want to’ the simple fact is they made their bed in the late ‘90s. Now they must lie in it”. The one thing that might be up for grabs is the independence of the ECB itself if enough countries become frustrated with the banks policies. However if this was likely then the Germans might well pick up their ball and leave the game. The Germans, uniquely in the European arena, have been through not one but two bouts of hyper inflation in the last 80 or so years. The first, it can be argued, created the conditions for dictatorship and the second smashed savings by about 90%. It is this albeit fading memory that drives the German fear of political influence in macro financial affairs. And it is this phobia which appears to be the overall driving force behind the ECB thinking.

But which of these three policies will work and which will be taught in schools? Personally I believe that, within reason, all three will probably end up with pretty much the same result as the influences on all the Western nations are to a great extent not internal but external. Underlying commodity prices are the driving factor in much of the inflation bubble and a growing economic power in the East is causing ever higher wealth transfer out of the west. The major internal factor is the current financial sector woes which can all be sourced from the same problem of over-inflated property values. As with all valuations this will probably swing from ridiculously over priced to bizarrely cheap over the next two or three years and nothing that any central bank does will, in the end, have made a blind bit of difference.

As a slight aside, for all those out there who want exposure to the property market without putting your house on the line you can now spread bet with IG Index on the rise and fall for both UK and London house prices.

Online Spread Betting Risk Warning

Spread bets carry a high level of risk to your money and may not suit all forms of investor. You can lose more than your initial investment so make sure you only speculate with capital that you can afford to lose. Likewise make sure you understand the risks involved and seek independent financial advice where necessary.

Read more on The Argus-Press

Read more on San Diego Union-Tribune

Read more on 9 News Denver

Read more on Reuters via Yahoo! Philippines News

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