I gave a talk\u00a0 in Philadelphia on options strategies\u00a0 to the Wharton School Investment Management Club last\u00a0 Thursday.\u00a0 My daughter\u00a0 Halima, who is an undergraduate student at Bryn Mawr College in suburban Philadelphia,\u00a0 sat in on the the talk as well. In addition to wanting to be a supportive daughter, she was my intern four summers ago, \u00a0 backtesting\u00a0 options\u00a0 strategies\u00a0 for\u00a0 me,\u00a0 so she actually had an understanding\u00a0 of the content.\u00a0 She is\u00a0 minoring in education and \u00a0 has a natural interest in learning and how students react to information.<\/p>\n
Halima took it upon herself to take some notes of how she thought the material went over with the students to help me hone these presentations\u00a0 for future college talks and last night she came over to the house\u00a0 to\u00a0 give me her impressions.<\/p>\n
It was interesting.\u00a0 While the students were watching my presentation, \u00a0 Halima\u00a0 was\u00a0 watching the students\u00a0 and she picked up on the points that seemed to leave the greatest impression on them.\u00a0 It turns out that what made the greatest impact\u00a0 were points that I was conveying with passion from my own personal experiences–points that\u00a0 in many cases \u00a0 were not\u00a0 all that obvious from the surface material that I was presenting, but had more meaning because they were borne from\u00a0 my\u00a0 actual trading experience.<\/p>\n
Here are the points that she thought hit home most with the participants :<\/p>\n
— What separates the men from the boys (or the women from the girls!)\u00a0 in options trading, is not so much the initiation of trades, but the skills that are developed over time in adjusting a trade at the right time, for the right reasons, with the right combination of options.<\/p>\n
— Options spread trading for income is different from most other forms of trading, because we are starting out with no<\/strong> directional opinion about\u00a0 the stock or index that we are trading\u00a0 and then using our adjustments to\u00a0 react <\/strong>to what the market has done.<\/p>\n — If options spread trading was so easy, everyone in the world would quit their job and become options spread traders.\u00a0 It\u00a0 takes experience and hard work to become proficient and consistently profitable.<\/p>\n –PLEASE don’t run out and start trading options right after this lecture. I can almost\u00a0 guarantee <\/strong> you will lose money if you start trading options without going through a thorough and deliberate process of building up your knowledge, experience and skill set. There are dangers and nuances that you must be aware of before you expose real capital to options spread trading.<\/p>\n –The key to trading\u00a0 options successfully\u00a0 is getting your emotions under control.<\/p>\n — The experience of trading a $5,000\u00a0 account does not at all prepare you for the experience of trading a $500,000 account.\u00a0 The only way to gain the experience necessary to trade a large options account is to very\u00a0 gradually build your capital level.\u00a0 This builds your “risk tolerance muscle” the right way–very gradually.<\/p>\n Halima\u00a0 felt\u00a0 the largest impact point was in fact the one that was the most personal to me:\u00a0 that I love options trading and I can’t believe that I found a job where I get paid for having fun everyday.<\/p>\n If the club members take one point away from my talk yesterday,\u00a0 I hope that it is this:\u00a0 no matter what career you choose, be determined to pick something that is truly fun to you.\u00a0 If you do, you’ll stick with it, improve\u00a0 and\u00a0 your career\u00a0 will become\u00a0 a fulfilling part of your life–not a\u00a0 necessary evil.<\/p>\n Seth\u00a0 Freudberg<\/p>\n Director,\u00a0\u00a0\u00a0 SMB\u00a0\u00a0\u00a0 Options Training Program<\/p>\n","protected":false},"excerpt":{"rendered":"