I recently debunked the seven greatest options myths, including one of the most popular ones: options are too risky and you can lose ALL of your money trading them.
Now that one was easy to disprove with one simple and indisputable fact: options were originally created to help mitigate risk.
But there’s something else that I’ve been seeing and hearing that is particularly troubling…
And it’s something that’s more dangerous and disturbing than the options tradingfalsehoods we discussed last week.
What’s even more alarming is that, after the chaos that unfolded in the markets last week, traders may actually believe it.
You yourself might have even heard this… and you might even be strongly considering it.
But before you make the WORST decision of your trading career…
Take five minutes and read this.
This “Advice” Is the Best Way to Lose All Your Money in 2016
My best friend, the late George Fontanills, always used to say:
“You can trade options naked, but never trade naked options.”
Bless his soul…
And today, I’m echoing his words because I am seeing far too many publications that are campaigning for the riskiest strategy in the options world: trading naked options (this is also known as shorting options).
The idea of trading naked options is something that I’m not a fan of at all… even when considering it as a day trade.
In fact, I will NEVER publish a trade that involves naked options.
But it’s important that we talk about them today because as I’ve said countless times before, making money is my No. 1 goal – and there is a right way and a wrong way of doing it.
And trading naked options, folks, falls under the “wrong way.”
The right way to make money trading options is using safe and effective strategies. This means using strategies that have either minimal risk accompanied by higher than average success rates or ones that have favorable risk to reward ratios (or both).
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