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EAGLE-I STOCK OPTION
SPECULATOR
Stock Option Trading
SO YOU WANT TO TRADE STOCK
OPTIONS?
Stock
Option trading can be one of the most financially rewarding, (or
destructive), investment strategies you can become involved with.
Stock options are bets, in their purest form, that the particular issue
involved will go up or down, just like betting on Red or Black on the
roulette wheel.
Better than 90% of
the people who place their bets on options are going to go broke, (or at
least deplete their resources significantly); get disgusted; mad at
themselves for playing in a market they do not understand and go off to
invest in T-Bills and Blue Chips where they do not have to worry about the
monthly phases of the moon, ect... (The figure I've heard is 93% which
would not surprise me one bit).
So, why do so many
follow the lure of options?
The answer of course is exactly the same
reason that folks flock to Atlantic City and Las Vegas. The desire for a
quick killing; a fast buck; instant gratification; a desire to be punished
unmercifully; a chance to meet Sally Struthers!!!.......
Options can
be heavy fuel for the ego....they can also be devastating psychologically.
If you do not have capital to risk, then stick to more conservative
investments. There is no shame in building your nest egg slowly and
methodically. Aggressive and speculative investments are only appropriate
for those with the stomach, heart and head for it.
So why bother to
even continue to read on. All of this depressing drivel is so
disheartening, (or should be), that anybody in their right mind should
immediately go to the ZEN Homepage; NOW!!!
The answer is that
options can be extremely profitable once you avoid the pitfalls the rest
of the market would love you to fall into, (including your broker who
loves options players who play the "box" for six times the normal
commissions).
With our stock
option system we trade only call options, but buy them in a way that
minimizes risk of loss and at the same time maximizes gains. The method
requires no computer and has protective stops. We get our selections from
among the PITBULL INVESTOR stock selections once a week. We don't get
caught in the wasting asset cycle as the option approaches
expiration.
Here is an
example of an option trade I just closed out generating almost a 100% return while the underlying stock only moved around 10%
Airborne Freight
(ABF) came up on the Pitbull list a couple of weeks ago. As I was looking
through the charts I noticed that during the dips and corrections earlier
this year, the stock did not flinch one bit and continued to move upward.
This is an obvious sign that the stock is strong.
ABF's stock was
at 39.78 now its at 43.75
We could have bought 1,000 shares at
$39,780 dollars we would have made about $4,000 on our $39,780 dollar
investment, generating about a 10% return.
Instead we took the
November calls at 4 7/8 ($4,780) and we exited the stock option call
yesterday at 9 so instead, we have made the same $4,000 dollars in the
same amount of time with an investment of 4,780 dollars! The rest of your
capital is not tied up and is free for additional investments.
Close to a 100% return as opposed to a 10% return on our investment by
taking the stock option instead of the stock.
Here is a more
recent example of a signal or stock selection system generated on
the stock LLL, we then went to our option strategy to find the best option
for this stock.:
Close to a 100% return as
opposed to a the stock investment by trading the stock option instead of
the stock.
We have been trading and
researching stock / option systems for years and that is what we live for,
as the stock market is one of the only places in the world where you can
walk away with unlimited amounts of cash without anyone thinking twice
about it.
I am not sure if our obsession is
driven by pure genius or an overactive greed gland, but the
EarningsTrader.com stock picking strategy coupled with our option strategy
has been outperforming anything else we have ever developed or even have
seen.
More Examples:
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