The Number 1 Ability For Option Buyers

By Javier Snover

The stockmarket is like an ocean and most of us option traders are seafarers. All veteran seafarers know that there are times where one should not go out to sea at all. These are the periods where the veterans sit back and watch the beginners perish in the thunder storms. An options trader knows such seasons and is patient in waiting around for the harvest season to come before making a move.

After more than a decade as a professional choice trader and hedge fund manager, I’ve had the honor of knowing many good choice buyers all over the world as well as the opportunity to learn something from the mistakes of thousands of broke choice investors.

From all of these great and daring option investors who dared move where no males has before, and from my personal choice trading knowledge, I’m very awed to understand that there really isn’t much of a difference in the procedures used by each profitable millionaire option sellers and completely broke option sellers. Both type of option sellers used the correct choice techniques related to their opinion on the direction of the main asset. Most of these selection traders even have the same viewpoint on the same underlying resource but ended up in dramatically different results.

I slowly realized that it takes more than just proper analysis and perfect option technique execution to create it as a millionaire option trader. It will take a various breed of man! It takes a breed of man with features not naturally found in many people and who behaves and thinks very diversely from an average individual.

I have consolidated and listed the #1 top quality of a real options buyer:

They’re Cool Headed

While amplifying earnings, choice trading even greatly amplifies the effects of every small whipsaw on the underlying property. What looks like a small, harmless whipsaw in the price of a share will seem like an earth quake on the cost of it’s options.

In the face of dropping a lot of money very rapidly due to whipsaws, a millionaire choice seller remains cool-headed and calm no matter what the trading value states. Too many option buyers bail out and drop 50 to 60% of their cash immediately due to such whipsaws, all due to their incapacity to keep relax in the face of such pressure.

I was trading in the call options of a stock along with one of my option trading students in mid 2006. That particular share went in to a quick and strong whipsaw that took 50% from the worth of our positions quickly.

That option trading student of mine almost went insane and then sold that position, occuring a loss even though our stop loss point has yet to be hit (it was very close then). That position went on to make a revenue of about 40% for me just after that whipsaw. Same trade, same choice, different outcomes. If you’d like to get more details on options trading, visit my blog for more: iron condors