Retired Aerospace Executive
If you’ve spent any time at all reading books or websites offering financial advice, you surely must have come across these words or others much like them. And it’s sound enough advice as far as it goes.
The problem is that when you’re thinking about a trading or investing persona, it’s all too easy to fall into the trap of seeing different approaches as mutually exclusive membership clubs.
Either you’re going to be a freewheeling day trader happily taking enormous risks in pursuit of quick riches. Or you’re going to be a super-cautious long-term investor, risk-averse and happy with a slow and steady accumulation of wealth.
But in truth, the attitude you bring to the markets and learning will have a far greater impact on your success than the way in which you describe your trading style.
Business owner turned full-time educator, Michael Becker, of Scottsdale Arizona has dabbled in the stock market for many years, trying out different training programs. Looking to retire in the next year or so, Michael is now looking to Option Rocket to help accelerate his progress towards his dream of financial independence and the opportunity to enjoy more quality time with the people he loves most.
For example, many in the markets think of themselves as investors who are happy to take huge risks in terms of their portfolio allocations percentages and have a cavalier attitude towards their stop-losses.
On the other hand, many day traders are extremely disciplined in their trading plans and careful with their risk management.
After all, profit is profit, whether you see it in a matter of hours or days. Or only after waiting for many years.
It’s an idea which made a powerful impression on businessman, educator, and long-time stock market “player,” Michael Becker of Scottsdale Arizona, when he encountered Kyle Dennis at Option Rocket and began thinking about trading options for the first time.
Like many people who’ve played the markets for a while, Michael has enjoyed his share of success, but has steered away from options; partly because of their reputation as “risky,” but also because they’re regarded as complex. Sensible traders tend to be wary of instruments that are too difficult to understand.
But with retirement rapidly approaching, Michael was urgently looking for ways to accelerate his progress towards financial independence. That’s why he decided to have another look at options after discovering Kyle and Option Rocket.
“I wanted to learn options and retire to trading. I didn’t have any experience in options trading, and I’ve learned enough in just a couple of weeks from Kyle that I’m confident this will be a big winner.”
Of course, there’s an element of truth in the popular idea that options trading can be a complex endeavor; there are more issues to be taken into account than when dealing with stocks by themselves.
Nonetheless, options are a vital component of Option Rocket’s educational programs. Why? Well, because when traded correctly they can yield spectacular profits. Ironically, the main reason for the superior profitability of these “complex” instruments is “simple” mathematics.
This can be illustrated by the following example:
Let’s say you bought shares in the fictitious “XYZ Widget Corp” for $30 and you found that a couple of weeks later the price had risen to $50. If you had bought 100 shares, you would now be sitting on a nice profit of $2,000 (a 166% gain).
On the other hand, if you had bought an option to buy at the initial $30 price (options are always over blocks of 100 shares) your profit would have been significantly more.
The price of an option to buy is always substantially less than the price of the underlying stock.
So in this example, you might have obtained options over 100 XYZ Corp. shares for, say, $200. With the rise in the share price to $50, your options are now said to be “in the money” to the tune of a cool $20 per share, making the contract worth $2,000 in total. Sell for this amount, and you bank an immediate $1,800 profit, a princely 900% return on your initial $200 investment. It’s easy to see how powerful trading options can be.
Now, of course, if the share price goes below $30, then your options are worthless (“out of the money”) for as long as it remains there, and if they expire while out of the money you will have lost your $200. But the point is; that $200 is all you can ever lose, and a far smaller risk than if you had bought the underlying stock at market price.
This is why options are not only potentially extremely profitable; they can also be safe. Assuming you trade them sensibly.
“I’ve tried a number of trading services. Kyle provides straightforward, live information that gives me the ability to make a profit. He also provides excellent training so I can learn the fundamentals.”
Kyle’s explanation of these fundamentals combined with timely notice of live trade set-ups has quickly become a winning combination for Michael Becker.
“I got started in investing to secure our retirement, and I think Kyle has the right formula for me,” he explains, “I’ve played a little in stocks for a long time, but I’m new to options. His alerts give me the confidence to make investments that turn quickly into profit.”
As Michael recalls, his very first trade under Kyle’s guidance was for the purchase of call (buy) options on Twitter stock (TWTR).
Buying at a price of $0.38 at 2:53 one afternoon, Michael cashed out at $9.34 the very next morning at a price of $0.84, a spectacular profit of 121% which netted him $1,339 after brokerage fees.
After this kind of success, it’s not surprising that he’s brimming with confidence for the future.
“My first trade with Option Rocket… TWTR $40 05/03 Calls … In yesterday @2:53pm – $0.38, out this morning @9:34am – $084. +121%. My profit, +$1,339 net of fees.”
Even though he’s had some profitable trades, Michael isn’t getting carried away. “Don’t get creative until you actually understand the fundamentals of the trades,” is what he keeps telling himself. It’s also the advice he would give to other would-be traders.
Investing the necessary time to work with Kyle and absorb the foundational principles of trading is key to Michael’s approach, and he’s also a great believer in the importance of paper trading. Placing trades using a dummy account to practice the accurate execution of a trading plan will lead to far quicker and more in-depth learning than almost any amount of theoretical study.
Of course, trading success is never guaranteed. But, by combining this diligence in learning with the confidence and willingness to seize any short-term opportunities which arise, Michael is rapidly increasing his chances of quickly achieving his trading and lifestyle objectives.
“My goal is to be retired in one year,” he says simply, “I’ll be able to spend more quality time with my wonderful wife and have no financial pressure,” he says.
Countless people dreaming of enjoying that kind of independence in their retirement years who should take heart from this trader’s story. With the right mentoring, a good deal of hard work and the confidence to take on just a little bit of risk, it is eminently achievable by anyone with the will to make it happen.
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Retired Aerospace Executive