One of our customers recently asked a good option-related question regarding the purchasing of worthless options at expiration. This is a very common occurance so I figured my response is worth sharing with everyone. See the question and answer below.
Customer:
Dear Mr. McMillan,
We all know that trading options is exciting, highly competitive, and can be very profitable. The key to long term and consistent profits in option trading is options education. The McMillan Mentoring Program, which is run by former Market Maker, white badge AMEX Floor Official, professional trader, and longtime MENSA member Stan Freifeld, can take your trading to the next level.
I want to spend just a moment pointing out how these market tops can unfold. One good example was in 2007. The market had just made new all-time highs in July and everything seemed wonderful. Volatility had been low (except for one hiccup back in February, 2007), but no one seemed worried. Then, $SPX broke down sharply with a 30-point down day (yesterday was a 40-point down day for $SPX), and that unleashed the bears.
We are going to have a slight schedule alteration for August. Since there are five Thursdays in July, and since our office is going to be closed at the end of August for three days, we are going to publish this newsletter on the first and third Thursdays in August. This allows us to keep the two-week spacing between issues without skipping an issue. Regular publication dates will resume in September. The weekly Hotline updates will continue to be issued as usual.
We all know that trading options is exciting, highly competitive, and can be very profitable. The key to long term and consistent profits in option trading is options education. The McMillan Mentoring Program, which is run by former Market Maker, white badge AMEX Floor Official, professional trader, and longtime MENSA member Stan Freifeld, can take your trading to the next level.
Join Stan Freifeld, Director of Corporate Services and head option mentor at McMillan Analysis Corporation for this complimentary webinar recording. Assuming full regulatory approval by the SEC, Binary Return Derivatives (affectionately known as ByRDs), will begin trading in September of 2014. This new and innovative product has characteristics that are similar to Puts and Calls but there are also some significant differences.
Do You Sell Naked Puts? If not, you may want to consider doing so. People often stay away from uncovered put writing because they hear that it is "too risky" or that it doesn't have a sufficient risk-reward. The truth is that put-selling, when secured by cash, is actually less risky than owning stock outright and can out-perform the broad market over time. The following article debunks myths surrounding put-writing and explains some of the benefits of this simple-yet-effective strategy.
We all know that trading options is exciting, highly competitive, and can be very profitable. The key to long term and consistent profits in option trading is options education. The McMillan Mentoring Program, which is run by former Market Maker, white badge AMEX Floor Official, professional trader, and longtime MENSA member Stan Freifeld, can take your trading to the next level.
We all know that trading options is exciting, highly competitive, and can be very profitable. The key to long term and consistent profits in option trading is options education. The McMillan Mentoring Program, which is run by former Market Maker, white badge AMEX Floor Official, professional trader, and longtime MENSA member Stan Freifeld, can take your trading to the next level.
