An experienced guide can remove some of the hardship

This morning my stockbroker called and asked if I’d like to be $900 richer, I quite liked the idea so I took his recommendation. And consequentially, my very first “Put Ratio Spread” has been profitable… So far - it’s not over yet!

Those who aren’t familiar with Option Trading are probably wondering what the heck a Put Ratio Spread is. About a week and a half ago I was wondering the same, so to better understand I decided to trade one, following a recommendation from my broker of course.

A Put Ratio Spread is buying 2 puts and selling 1 put. My broker explained the market was going to “bounce”, meaning the stock would rise in value for the short term but decline in the longer term. So the idea is to buy back the sold put after the stock bounces and sell the two bought puts after the stock has declined.

A plotted visualisation of a stock bouncing

Maybe that’s different to how some manage such spreads, but my broker prefers to close out positions the moment they become profitable, rather than waiting for options to expire. This perhaps results in lower profits but in an unpredictable market it also lowers the risk through less exposure time.

Sure enough the market bounced and I profited on that leg of the trade so now I’m waiting for the stock to decline. The nice part is this trade has limited loss potential but UNLIMITED profit potential. Of course the stock price may not decline and I’ll lose money, but my broker’s recommendations are usually profitable. So far 14 out of the 15 trades with this broker have been profitable.

Looking at the bigger picture, it cost me $1350 to enter the trade and I’ve already recouped $900 (minus brokerage), so if all goes according to plan the remaining $450 will be returned plus a tidy profit.

Sounds good doesn’t it?

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It got me started!

This DVD is like “The Stock Market for Dummies”! It puts all that technical stuff into simple English and points you in the direction where you can find a competent broker to do all the hard work for you.

Master your mindset to conquer fear!

The other day my stock broker Emailed me a recommendation for a Bear Call Spread. The recommendation included a nice explanation of how the stock price would move and even a chart.

Nonetheless, I still didn’t take the recommendation due to fear! I won’t detail what a Bear Call Spread is, but it’s a stock market strategy where you profit when the stock decreases in value. Yep, that’s right, decreases. It also has a limited downside risk and you can make a nice profit on a small outlay.

In this case my outlay would have been around $2,500 to make $1,200 gross profit. So that’s a 48% return which compared to what banks offer is phenomenally nice. Of course banks usually come without risk and it’s the possibly of loss which creates fear.

So instead of taking the broker’s recommendation I decided to leave it for another day to see how the stock price would move. Silly me because over night the broker’s recommendation came true and the stock dropped by about 70 cents. This movement was substantial enough to make the $1,200 profit in under 24 hours!

The reason I held back was because I’ve profited from four consecutive trades (yes, four in a row so you’d think I’d have some faith) and became worried that my good fortune was about to end. Now that’s very a silly thought process. Anybody who understands the Laws of Attraction would be well aware you must align yourself with your desired outcome by thinking positively and believing the outcome is possible.

So while I didn’t lose any money, I still missed out on an opportunity to make $1,200 in less than 24 hours, with very little effort, and even the luxury of a comprehensive explaining why the trade was a great opportunity. I’m kicking myself! So the moral to the story is get your mindset in check when trading!

If you’re new to trading the stock market like myself and want some advice how to get started then...

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That's how I started.

The DVD explains how to get you into the game and start profiting! But it’s not limited to the stock market, it also covers real estate, how to get out of debt and get a pay rise in your current job!