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A lesson from a conman: Madoff’s strategy revealed

Today's Financial News - Posted December 19, 2008

Bernie Madoff had the right idea, but where he went wrong was the amount of investor dollars he tried to use. The options-trading strategies he touted are just right for the average retail investor.

by Andrew Snyder

Baltimore — (TFN): Everybody in the country hates Bernie Madoff right now. The man is accused of pulling off the largest heist in world history and now we are all forced to pick up the tab. It is just one scandal shoved down the collective throats of American investors.

I do not know about you, but I was always taught to look at the bright side of things. When the world hands you lemons, as the cliché goes, make lemonade. It may be cheesy, but in times like these, it is all we have.

The way I see it, Madoff’s arrest is giving attention to a trading technique too few investors are aware of. The former investing great sold a long line of investors on an options-trading technique that is simple, easy to understand and most importantly, puts a limit on the amount of principle his clients can lose. It is a technique every investor needs to know and use

In the options world, we call the strategy Madoff was selling a collar. The technique is perfectly sound and has been around since options were first traded.

Where Madoff went wrong was the amount of investor dollars he tried to use. You see, collars and many other options-trading strategies are tools of the “little” investor. Get too big and the limited liquidity of the options market will make the strategy nearly impossible to implement. There simply are not enough options.

It was not Madoff’s investment strategy that failed (it was an ingeniously devised technique), it was his greed. The temptation of billions of dollars at his fingertips was too much too resist. Now his investors are paying dearly.

Please do not let the negativity surrounding Madoff and his hedge fund scare you away from proven and highly successful options techniques. I urge you to research these strategies and start using them to protect and maximize your portfolio’s potential.

Imagine the freedom of going to bed at night, knowing your investments are protected no matter what happens in the coming days.

By merely investing blindly in a risky buy-and-hold position, you have no idea what the future holds. But by using some simple hedging techniques created by the easy-to-understand options market, you can control your financial destiny.

These techniques will do wonders for your wealth. I am here to prove it.


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Posted by Andrew Snyder · Filed Under Featuring..., Investment Strategies, Videos 

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