A historic day for options
Today's Financial News - Posted March 2, 2009
The markets may be painful, but it is nothing we have not seen before. Investors that research and follow the lessons of history are using options to get back what they lost. Best of all, they are making history as they do it.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): I have appreciated my weekends more and more over the past few months. A couple of days with the markets closed give us a well-needed break from the depressing action on Wall Street.
We need to squeeze all the relaxation we can into those two short days because Mondays have not been too kind. Today is obviously no exception.
I had an interesting weekend. I spent Saturday building a wall-to-wall bookcase in my humble abode, a farmhouse built in 1900. Then on Sunday, I spent the day with family celebrating my grandfather’s 90th birthday.
Normally, I would never bore you with my personal life, but those two days have something quite unique in common. Between my 109-year-old house and my 90-year-old grandfather, there are few things they have not experienced. More importantly, there is not a financial crisis they have not lived through and rebounded from.
My dad’s dad lived through the Depression and went from growing his own dinner to building a pretty darn successful small business. Along the way, he punctured a long, broke his back and managed to stay married for over 65 years. Just last week, his wife caught him tying two ladders together trying to reach the dead limbs of an old oak tree.
As for my house, well, I can only imagine the century-old discussions that have echoed across our dining room. The old place has weathered hurricanes, floods, you name it. Once I get this bookcase finished, it will be better than the day it was built.
We will re-grow
Even more important to the current economic situation, I can see hundreds of snow-covered trees through my office window. Not one of them was around when the logs that frame this house were harvested. It is proof that, while man may be able cut everything down to the root, it will sprout and thrive once again.
The global economy is no different than the trees that surround my house. The market may be reversing faster than imaginable, but eventually it will rebound.
Successful investors, however, won’t wait for the rebound. Now that the trees are out of the way, they will use the bare soil to plant some more seeds. They are not going to sit back and cry about their losses. They will grow and sell some corn, while working as hard as they can to get their money back.
Smart investors will use options to get their portfolios back on track. The folks buying and selling options are not complaining, even as the bears tear the markets to shreds.
The major indices have now last more than 50% of their value since their 2007 highs. The average buy-and-hold investor cries as he opens his monthly portfolio statements. Many of the folks I know shred the envelopes instead of opening them.
But a recession does not have to be painful. Imagine the profits that savvy options investors have locked up over the last six months.
If you have been following my advice, you do not have to imagine. Over at Hot Stock Confidential and on this site, through my Beta trades, we have been raking in some monumental gains. Most recently, we locked in 40% gains in just a few days by trading Citigroup (NYSE:C) call options.
Making history
If you are not an options trader, you may not know today is a historic day for the industry. The NYSE opened its options exchange this morning. Now, investors can trade the derivatives directly beside the world’s most-famous equities exchange.
The options world is growing by the minute.
Even better, here at TFN, we are about to reveal our latest options-only service, dubbed TFN’s Strategic Trader. The new service creates the greatest opportunity for you to profit during this economic downturn.
This is your chance to make an important decision. You can standby as the nation’s investing forest is clear cut. Or you can take action and plant some seeds that will ensure your portfolio keeps growing throughout this mess.
The choice should be obvious.
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