Time To Revisit An “Old Friend”

Time To Revisit An “Old Friend”

Posted On July 20, 2022 3:35 pm

Some of you know my first trade, all those decades ago, was a disaster for me. I lost $50,000 overnight – and it was $50k I could…

ill afford to lose at the time.

Don’t get me wrong, I wouldn’t like it today either…

But, back then it was almost disastrous!

It was in 1989, and I sold naked puts on UAL. It was going to merge with Northwestern at around $200/share.

UAL had been trading around $190.

I sold puts that expired the next day at a $150 strike price.

I just had to wait out one day and I was $1000 richer when the puts expired.

Expiration day the merger was called off, the stock collapsed…

And I lost $50,000!!

I learned a lot from that single trade.

  1. NO naked trades
  2. There are no sure things
  3. Premium collection is great, as long as the trade is great
  4. NO naked trades (yes I said that twice!)

In this market trade structure is as important as finding great trades.

That’s why we use every option strategy in the books, rather than just one.

I invite you to come aboard and find out why we’re up 14% in a market that is down over 17%!

You can try it out for just $19.

Once you do, you’ll stay forever!

About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.

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