Pst ... wanna buy a used option?

24 Sep 09 03:58PM EST
Post by Alan Dooley
Around the same time that I was researching ways to recession-proof your finances, some prominent newspaper adverts caught my eye. They were for investment seminars that promised to reveal how to make money regardless of whether share markets were going up, down or sideways. Better still, the system was supposed to be safe. And in the midst of a global economic downturn, with stock markets smashed by up to 50%, who wouldn’t be interested in that?

I’d written about get-rich-quick and wealth creation schemes in the past, so I was sceptical about what “secrets” such seminars would reveal. Nevertheless, I felt obliged to check these ones out for myself. With notebook in hand, off I went to various five star hotels to hear presentations about options trading. Our feature story has more about what happens at these options seminars.

After leaving one of the free seminars I bumped into a guy who said he regularly trades options and had spent thousands of dollars on education and software. He said he knew people who had given up their regular work to "day trade" options. The biggest loss personally he’d had from a trade was $5000, and his best profit was about the same amount. “Don’t give up your day job,” he warned me. “You’d need to be able to replace your normal income with income from trading, and that’s not easy.”

I was staggered that amateurs would give up their 9-5 to try to make a living trading these complex investments. But later I spoke to the derivatives industry association and was even more surprised to learn that “consumers” - as opposed to professionals - are performing about 60% of options trades in Australia. Have you managed to find alternative ways to supplement your income through wealth creation schemes that actually work - or did they flatter to deceive? We'd love to hear your story.

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