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Even if You are Not a Trader or Investor

Trading Secrets They

Don’t Want You to Know

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Copyright © 2014 by ProfitPitTM Press.

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The people and events described and depicted in this novel are
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 Dedicated to:

Your Success

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 Why Should You
Learn to Trade
Options

Options are probably the greatest wealth

building tool ever invented, especially for retail
investors. However, Options trading is
infamous for all the wrong reasons. The
Internet as well as newspapers is filled with
attractive, influencing marketing sales-letters
that promise to make you rich very quickly.
Let’s be fair, if those sales-letters were
promoting to OPERATE-IT-LIKE-A-
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BUSINESS, how many would really be attracted?
Let’s face it, making huge money in shortest
possible time hits well to our internal desires.

With this key book, let me introduce you

to key reasons why you should learn to trade
options EVEN IF YOU ARE NOT A
TRADER.

Protection, Hedge,
Safety, Insurance

What if you could guard your

business against price fluctuations?
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What if you could have protected your
wealth during severe market losses
2000, 2008? What if you could hedge
your retirement savings invested into
your company stocks?

The primary reason you should consider

learning to trade options is the same as
insurance coverage. Learning how to hedge is
not only required for traders, but it is an skill
that’s equally good for BUSINESS OWNERS
and COMPANY EMPLOYEE as well.

If you are a BUSINESS OWNER in a

sector where options are easily available, you
could hedge your business against price
fluctuations of factors that affect your
business activities.

These days options are available on almost

all asset classes such as Crude Oil, Gold,
Metals, Stocks, Grains (e.g. Soybean, Wheat,
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etc.), Currencies (e.g. Yen, British Pound,
Aussie Dollar, Euro, etc.). Knowing key
factors that can affect your business and then
hedging against those can be a really valuable
skill. Airlines do this most of the time, Coffee
producers/Starbucks continue to hedge and
similarly Copper and Gold Mine owners hedge
their output prices.

Even if you don’t have listed options, you

could envision some and then find some sort
of over the counter legal ways to hedge it.
Options market is growing day by day and
now covers a wide range of products.

John (not his real name but a real story)

was a long term employee of a fortune 50
company. He was about to retire in 2008. I
saw tears in this big man’s eyes when he saw
massive drop in his long term portfolio and he
needed to cash-in those holdings soon after
his retirement. He was counting his post
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retirement wealth mostly on his company
stocks.

"I try to buy stock in businesses that are so wonderful

that an idiot can run them. Because sooner or later, one
will."

Warren Buffett

As a company EMPLOYEE, our

fortunes are usually tied to the company we
work for (in form of company’s stock
ownership). Due to conflict of interest, one
might not be able to trade stocks/options on
that company but you could benchmark your
company stocks against relevant sector or
overall market that can help you in
protecting your long term wealth.

AS INDIVIDUAL INVESTOR, part of

your wealth might be in the form of long term
stocks holdings. Knowing how to protect your
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stock portfolio will save it for from
disappearing during severe market meltdown.

No one can pick market TOPS and

BOTTOMs else there won’t be any market.
During past 14 years, we have seen huge rallies
and severe market losses many times. What if
you could have protected your wealth
when markets sold off deeply?

Let us know if you need help or have

questions
Ask@OptionPundit.com

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 Build Your

At Your Prices

What if you could buy Apple

shares at $475 or $450 (vs. current
market price $543)? What if you even
get paid if the stock is not given to you
at $450 in next 50 days?

Equity options investors (or physical

metal, grains where delivery is applicable) can
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build their stock portfolio at the prices which is much
lower than current market price. Using few easy-to-
learn skills, even an individual investor can
build his long term stock portfolio at lower
than current market prices following a
systemic approach. It is simple mathematics
that anyone with simple addition/subtraction
skills can do it.

It is like buying a house (but with a huge

difference).

Let’s assume, you want to buy a house but

at your price. The house-owner is not willing
to sell you right now at your price.
HOWEVER, the house-owner tells you
that he would pay you certain amount if he
decides not to sell the house to you in
next, say for example, 90 days!!!

Similarly, if you are not given the shares of

the company YOU chose, at the price YOU
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decided during the time frame YOU chose,
YOU WILL BE PAID and you can do it
again, and then again.

You choose the company, you choose the

Price!

Let us know if you need help or have

questions
Ask@OptionPundit.com

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 Generate
Consistent Income

on Your Stock
Holdings

What if you could generate

additional regular income on your
stocks?

Imagine buying a house, then renting it

monthly to collect income. That is an excellent
way of monthly cash flow that riches of world
do it. However, there is an advantage of being
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an Option Trader. In case of a house, you may
not find a tenant. But in case of stocks, there
are ample “tenants’.

Most buy-and-hold investors keep stocks

in their portfolio expecting huge runs in the
long run. But when markets are going no-
where, your stocks earn NOTHING except
the dividends.

With few simple skills, one can learn how

to enhance yield on existing stock portfolio. In
fact, these strategies outperform pure buy-and-
hold strategy in 3 out of 4 scenarios-
1. When your stock is going no-where
2. When stock is selling-off
3. When the stock is moving up
moderately.

The only time, these simple techniques

underperform is when there is a sudden, huge
rally in the stock. In fact, there are very simple
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ways to increase returns even in such
scenarios.

Such strategies provide cushion against

moderate market drops and over a period of
time, the credit alone (similar to rent in case of
a house) will make your stock purchase FREE.

Let us know if you need help or have

questions
Ask@OptionPundit.com

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 Regular Monthly
Cash Flow

What if you could generate monthly

cash flow whether markets go up, down
or no-where?

Options is probably the only asset class

that is so versatile to offer opportunities for
various scenarios like no other. Most other
investment vehicle are focused on “CAPITAL
APPRECIATION” (Buy low/ Sell High or
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vice versa) while options can be utilized for
regular monthly “CASH FLOW” (as well as for
capital appreciation).

Options are based on mathematics and

pricing is determined by a formula. It is a time
decaying asset. There are only two types
CALL and PUT, one benefits from upside
move in the stock while other benefits from
the downside move. You can create almost
infinite possibilities with options.

You can structure NON-DIRECTIONAL

(i.e. it can make money whether underlying
goes up or down) strategies that are
LIMITED RISK in nature while still offering
GREAT REWARDS.

Though there are tremendous possibilities,

based on our decade+ experience, we can tell
you that it is only 4-5 strategies that make up
for almost 80% of the gains.
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 There is NO NEED to search for the best
stock. There is NO NEED to scan the
universe for quality stocks. There is NO
NEED to analyze company’s Balance sheet,
Cash flow, Profit & Loss statements as those
market neutral strategies are aimed to benefit
from options’ and underlying stock’s
characteristics.

While this is easy to learn and understand,

doing this requires practice and experience.

Let us know if you need help or have

questions
Ask@OptionPundit.com

After reading this, you may ask if Options

Trading is so easy, why everyone isn’t doing it.
And why majority of Options Trader’s fail
(some say > 90% of Options Traders fail).

This brings me to the final point -

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 Leverage, Multiply,
Supercharge

What if you could covert $5K into

$1million?

Inappropriate usage of leverage is where

most traders fail. Theoretically, and in some
case practically, a small sum of money can
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convert into huge sums. It is this possibility
that attracts novice traders to enter into
options trading. Since most are familiar with
BUY and SELL (and HOLD), they start
trading options along the same principles
without really understanding how options
work.

This attracts the untrained side of traders

and investors. They think by investing small
sums, they can hugely profit from the
direction i.e. up or down.

An example most often sighted is-

To buy 1,000 Shares of Apple Inc. (Ticker-
AAPL) you need $543,000 (assuming $543 current
market price). If Apple goes to $600 in 3 month, your
stock gains are $57,000 thus gaining +10.5%.

What if you purchased 10 AAPL APR’14 call

options (3months, 550 strike) for $29,500 and if it
goes to $600, your gains will be $20,500 thus gaining
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+69.5%!!!

That’s almost 6 times more money using

Options vs stocks. How cool is that?

And it is just the beginning. You could

increase these returns even many more folds
using various other types of options (e.g.
shorter time frame).

This logic and the potential risk/reward

are easy to understand and satisfy our internal
desires to make money in the shortest time.

But it is not easy to predict stock’s

direction. This is where specialized skills in
predicting the stock moves come into play and
hence search of a holy grail to predict stock’s
move.

"Long ago, Sir Isaac Newton gave us three laws of

motion, which were the work of genius. But Sir Isaac’s
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talents didn’t extend to investing: He lost a bundle in
the South Sea Bubble, explaining later, “I can
calculate the movement of the stars, but not the
madness of men.” If he had not been traumatized by
this loss, Sir Isaac might well have gone on to discover
the Fourth Law of Motion: For investors as a
whole, returns decrease as motion
increases."
-Warren Buffet/ Source: Letters to shareholders,
2005

Since amount to be invested tends to be

fraction vs buying shares, majority of option
traders also tend to overtrade resulting into
poor outcome.

So when do one use options to leverage?

If you have a PROVEN system to predict

underlying stock direction, if you have
specialized skill set to understand what is
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going drive a particular underlying stock or
commodity’s prices, if you can envision any
potential merger & acquisitions and many
more.

Bottom-line: If you have a specialized skill

set to forecast underlying asset’s price move,
you should learn how to trade options well so
you could benefit from your specialized skill to
multiple your returns.

Let us know if you need help or have

questions
Ask@OptionPundit.com

Optionpundit.com 24
 In Search of a
Holy Grail

Where Do You Go From Here?

Congratulations for making it this far. You

have now been exposed to some of the most
powerful and effective reasons available for
succeeding in Options Trading business.

While options are one of the greatest

wealth building tools available to common
investors, many still fail as they don’t do it

Optionpundit.com 25
properly.

No matter how compelling these reasons

are, just being exposed to them is not enough.
You must also do something with them. In
order for you to get the most value out of this
knowledge, you might want to consider
developing a step-by-step action plan.

Just like any other regular business,

TRADING is a BUSINESS too and in order
to maximize benefits from it, one needs to
have right mind-set before diving in.

Before you start, let me answer most

commonly asked questions-

DOES IT WORK?
IS IT EASY?
CAN I DO IT?
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 The answer to all three is a resounding YES!!

If you are a business owner, or a trader,

sooner or later options skills are going to be
useful. However, it is dependent upon
SKILLs, SYSTEM and SUPPORT you have
before you begin your real journey.

Find a good mentor who can shorten your

learning curve and save you fortune by
transferring his skills to you. Don’t choose
someone randomly. Ask for student referrals
and speak to them. This will provide you with
Truth, Authenticity and Proof before you
make a commitment. Invest time wisely.

Though your coach or mentor will provide

you with tools, systems to help you get started,
you will have to develop your own system. A
system is something that will continue to
produce results which are duplicable and
Optionpundit.com 27
transferable. It is the system that will enable you
to do more with less time.

If you are looking for a quick start, you

may want to start reading about Options at
www.OptionPundit.com.

OptionPundit.com is dedicated to options

trading and contains over 800 posts and
articles. There is also a huge collection of
powerful tools, all absolutely FREE at no cost
to you.

Alternately you can approach me at

Ask@OptionPundit.com anytime and I would
love, absolutely adore to personally answer any
questions you might have.

Now you have the reasons…and

SUPPORT

GO FOR IT!
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 Scan the QR code or go to
OPTIONPUNDIT.COM to find out more.

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