Mission Statement

We take options education seriously. We've seen too many investors lose money when buying and selling options before being prepared. They eagerly arrive at the options world, make trades, and not understanding how or why theya re making or losing money, ask questions that should have been asked earlier. Often, it's too late, and money has been lost. That situation is avoidable.

When the markets behave in a way that scares almost everyone - such as the market massacre of October 2008 - it's important to know what you are trying to accomplish before simply buying puts or calls to bet on whether a bottom has been reached or if the tumble will continue.

It's possible to make a profit by taking a blind stab, but that's gambling. It's not investing. We believe you must understand what you are doing before placing your money at risk, especially if want to have a good chance of earning a profit.

To understanding why we believe investors should be prepared when using options, and our ideas about how to trade options successfully, read our trading philosophy, which includes advice for option rookies. If you believe these basic premises are sound, then you will find our books helpful in getting you off to a good start when trading options.

It's important to begin your education with a discussion of the most basic characteristics of options, allowing you to understand what options are, and what you can do with them. With that basic background information, you can begin trading in a practice account (paper trading) and observe how option prices fluctuate when the underlying stock moves higher and lower, and as time passes. You gain necessary experience without risking (or making) money.

The major difference between options and stock is that options have limited lifetimes and expire at a known time. Stocks never expire. You can gain trading experience at no cost, and we recommend taking advantage of paper trading accounts, offered by most brokers.

Why is paper trading important? Our experience is that too many beginners use option strategies that have little chance of being profitable. By paper trading, investors learn how buying and selling options makes, and loses, money in a real world environment. When you move on to trade with your own money, we hope you will have learned to avoid those money-losing, high-risk strategies.

Most beginners love the gambling aspect of buying options and many so-called option experts tell investors that buying options represents the road to riches. Beware. It's very difficult (not impossible, but it is difficult) to consistently make money when buying options. If you follow our suggestions, you will not be selling options and collecting cash. Once you are rady to move beyond the basic straegy of writing covered calls, we recommend always hedging your option sales - to limit risk. Risk. That's the key word. We stress risk management.

One word of warning: Please don't fall for the sales pitches of those who tell you that options represent the road to easy riches. You can build a solid financial future for yourself by adopting conservative strategies that produce excellent returns on your investment. But there are no get-rich-quick schemes that consistently make money. You may choose to gamble, and you may get lucky. But options were invented as tools to reduce risk. If you learn to use them conservatively, and take time to understand what options can do for your investment portfolio, your chances of making good money over the longer term are significantly enhanced.

Check out our Education page for other web sites that offer good educational materials at no cost.

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