The following is an article by Chris Rowe Editor of The Trend Rider. His newsletter is about buying options instead of selling options.

 
Options: What Your Broker Doesn’t Want You to Know

Right off the bat, I want to say this isn’t about “that dirty rotten stinkin’ bad old broker.”  Brokers and money managers, please know, I’m just going to slowly make our readers understand the things that motivate your actions — other than just making the client money.

One of those things includes making yourself money.  Yes, you have a right to do what you can to get paid, too!  It’s a free market and a free country and I won’t hate the players — but I will hate the game. …

Options Can Buy Your Freedom

Ever since I started trading options, my life got a lot easier. And that’s not only because I’ve been making all kinds of money doing it, but [...]

Microsoft is a huge company and you probably already have their stock either in your personal portfolio or in any mutual funds you may have. Lately MSFT has not been doing much. But I think that is going to change.

For a stock to move it needs a catalyst, some reason that will make it jump or fall. This could be earnings, bad news, new sources of revenue, etc.

For MSFT the catalyst comes in the form of a software upgrade.

I have a friend who one a successful custom software development company. As a software developer he was given an advance copy of Windows 7, Office 2010, and the new version of some developer software.

I have never seen him get so excited about software that he has not written himself. He told me that Windows 7 was awesome, and that every developer that uses Microsoft will upgrade to the new developer software [...]

So far all the free trades I have posted on the blog have been profitable and have not needed any adjustments. Hopefully I can keep up the trend.

For this free trade, I got a suggestion from a member.

Eddy Hussain writes,

AAPL at 170.47
 
SELL 2 160 PUT
BUY 2 155 PUT
 
Credit .81
 
Max profit 152.00 Max loss 838.00
 
ROI-18.1%
 
Use 10% of account.
 
Probability of success 75% according to TOS.

I really like this trade because it is right below a strong level of support.  But I would not classify this trade as a conservative trade because it is pretty close to the money. 10 points in AAPL is not much. So the 75% probability of profit might be a bit misleading.  But if AAPL moves up 5 points or more this one will be a slam dunk.

Let’s see what happens. Thank you very much Eddy!

Not all brokers are created equal.

In order to trade for a living or even trade profitably, you must have a good set of tools. One the tools that is essential is a good broker. With so many to choose from, there is no excuse for having a lousy broker.

As option sellers, we need to have an option friendly broker. This is a broker than either specializes in options, or considers option traders a very important customer base.

By using an option friendly broker you will get

better commissions
better margin requirements
better prices on your orders
better software/platforms to trade on
better information
and better education

How do you tell if your broker is an option friendly broker?

If your broker advertises on national tv, it’s probably not an option friendly broker.
If your broker is a household name ( they have their name on a stadium), they are probably not an option friendly broker.
If your broker’s [...]

In another post, I commented how I do not feel very sorry for the “victims” of Bernie Madoff. No one forced these people to give him their money. They did so out of greed. Yes, he was a con-man and the system should have caught him long before, but if they want to blame anyone, they should look first in the mirror. Especially those that gave him all of their savings.

Am I a monster? Hardly. I feel bad for the people who are in hard times through no fault of their own. Like the story I just saw on NBC about the family in Fort Meyers Fl who bought a condo in a new development. With more than 300 units in their building, they are the only occupants. All the other units are empty. The builder has cut off power to most of the building, maintenance, and security.  The builder [...]