I just got done with my morning workout and
walking around the Farmers Market to get fresh
eggs and bacon for the week.
I wasn't sure what I was going to talk about
today, but luckily there's the internet, and
things will find you.
I was sipping my coffee and saw an article on
MarketWatch talking about a high schooler who
turned $900 into $55K in just 12 days.
Jeez... here's another article that got picked up
because of fake profits that nobody took the time
to check the facts.
The article talked about a Reddit forum with
38,000 active subscribers who happened to be
mostly millennials who idolize Martin Shkreli, the
former CEO of Turing Pharma that increased the
drug 5000%.
Here's a quote from one of the members about
Shkreli:
"He is living their dream. He got rich. He might
have lied and cheated along the way, but [on the
forum] that's encouraged."
Yeah, the same guy that is facing seven counts of
securities fraud and conspiracy in connection with
previous work at a hedge fund, and he faces up to
20 years in prison if convicted.
This group of millennials prides themselves on
making YOLO trades, which are all or nothing bets.
YOLO is short for "You Only Live Once."
Non-millennials would call these airport trades.
That high schooler's YOLO trade supposedly
involved buying nearly 200 put option contracts in
the SPY for a day trade.
In the thread, he commented that his mom was going
to take him to see "The Big Short" to celebrate.
Bless his naiveness, right?
I have no idea how he took $900 to $25,000, but
for his big payday to $55,000 he had bet his whole
account at that time with buying all those puts
that totalled around $25,000.
Now, I think you know what this sounds like,
right?
Shooting craps at the Vegas casino table.
You see someone get hot out of the hundreds of
people before them, and they get caught in their
ego with people watching and cheering them on, but
eventually the odds catch up.
Unfortunately, as you can see most approach
trading options this way and abuse it.
Leverage can be good, but it also can be a train
wreck if you don't approach it the right way.
Most look to go down this road; high risk, high
reward, but low probability.
Yes, you can win big, and there have been people
who have made millions doing it.
However, the are only a few of them that were able
to keep their profits with walking away.
The others eventually lose it all and keep chasing
that big hit again with never being able to make a
dime.
Then there are the other investors that have
learned to how to approach trading options that
have allowed them to generates consistent returns.
It's not sexy, and there's no YOLO type of trades
involved, but it works and it's based on proven
numbers that come right from the market.
http://www.FearlessInvestingWithOptions.com
To your wealth, freedom and options!
Joshua Belanger