Selling Commodity Options: Why Aren’t More People Doing This
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If Selling Commodity Options is so great, why aren’t more people doing it?
Many of you who’ve read my book Selling Commodity Options are already sold on the strategy and concepts for making income by selling options, still I get quite a few emails that ask, “Ok, if it’s so great, why aren’t many more traders doing it?” That’s a fair question that deserves a good answer.
Of the millions of individual investors who trade stocks, only about 3 of every 100 ever trade options. Of those, even fewer buy or sell commodities and commodity options. As you watch any of the financial channels (CNBC, Fox Business, Bloomberg, etc.) it is easy to notice that you rarely if ever, hear much about any kind of option trading. These networks cater to the largest possible, most broad and generic audience possible. It doesn’t work for them to broadcast to such a small niche as option sellers; it just doesn’t pay their bills for them. Less than one of every thousand personal investors are selling options, yet that is where some of the greatest opportunity dwells. The Pro’s have been doing it for years.
Very few financial professionals know much about option trading – beyond the very basic buying
and selling mechanics. These “people who don’t know” lump in with most people who have little or no option training. They rush to say “it’s that risky stuff and you don’t need to get into that,” or “It’s too risky.” I’ll bet these same people would agree with the Warren Buffett quote in the picture that heads this article, “Risk comes from not knowing what you are doing.”
Most financial professionals never recommend investments beyond the scope of their own knowledge. Since they don’t recommend anything they are not well versed in, they do almost nothing to educate investors about options – and especially about such specialized knowledge as selling commodity options. It isn’t their intention, but it is your opportunity that gets limited by what they don’t understand.
Opportunity in Selling Options
Free software from online brokers, instant electronic trading, and lightning fast data with deeply discounted commissions have created this new opportunity. These new low-cost innovations in the last five to ten years are the disruptive technology responsible for this opportunity. A few short years ago – only professional investors had the data and special knowledge required. With commissions now well below $5 a trade, there is no financial incentive for brokers or anyone in the investment world to teach individual traders this advanced method of option trading. There is no course in any college you can take to learn how to execute these high probability trades. It is so new there are only a very few books that teach it. Regular option videos and training doesn’t cover this profitable niche of advanced trading.
There are a few very specialized money managers who use it as a primary strategy for their clients and it works extremely well. These businesses only handle large accounts with $250k to $1 million account minimums required. Good books on option selling in commodities are also very rare. There aren’t more than half a dozen, and half of those were written years ago and are now obsolete. There are only two books on the subject I recommend. One is my own Selling Commodity Options, and the other – a really great book from Michael Gross and Jim Cordier of OptionsSellers.com titled: The Complete Guide to Option Selling – 3rd Edition, available at a substantial discount direct from their website at OptionSellers.com
If you happen to have $500k or more and want someone to put that to work selling commodity options in a managed account, seek out OptionSellers.com. They only handle high-end investors’ money and they are the best in the land. I started the Time Farming Training Bulletin almost a year ago – in order to create a modern platform specifically to teach small and medium sized investors how to use this strategy.
Learn Using Real Trades as Examples
The Time Farming Training Bulletin is like your own online course in selling commodity options.
In my newsletter, I send out actual trades from my personal account along with charts, articles, option matrix (TOS), a chart of historical seasonal price patterns, fundamental analysis, and my comments on why I chose each trade. There is also a discussion of recommended money management practices for small/medium accounts.
My newsletter is to help you get through the learning curve with with clear and detailed examples. No credit card or personal information is required to register, only your name and email. That’s it. You don’t risk a penny. The instruction is specifically for small and medium accounts of individual investors who trade online. You can sign up right now and it only takes about ten seconds because nothing but your name and email is required: http://www.TimeFarming.com
Don A. Singletary