This includes how to get the best prices for option orders and which strategies to use in various market conditions.
After trading options for a while, you learn to love the process and your art form improves.
For me, option trading is a mentally intriguing and engaging type of art.
It sure doesn’t feel like work.
It’s more like play, and it reminds me of this passage I read some time ago that goes something like this:
Work & Play
Once upon a time, there was a man who paid a visit to his talented artist friend.
On his first visit, he found the artist sitting quietly in a chair, gazing into the distance.
Curious, the man asked, “What are you doing?”
The painter, with a serene smile, replied, “I’m working.”
The next day, the man returned to the artist’s studio and was surprised to see his friend in a frenzy, vigorously applying paint to a canvas.
He inquired, “Are you still working?”
The artist, now with a gleam of joy in his eyes, responded, “No, my friend, now I’m playing.”
This is how I approach my options trading. Yes, there is “work” involved and it’s not as “passive” as people make out. But, it sure is fun when you can consistently make money every month from the so-called Wizards of Wall Street!
So, my goal with Dividend On Fire is to give you as many rules and concepts as possible to improve your knowledge in the area of “science.”
The art of selling options is cultivated through your own trading experiences.
For this reason, it will always be best to trade as small as possible at the beginning of your options trading journey.
Trading the Half In Half Out method when starting is not a bad way to begin.
I think it was Charlie Munger in one of his seminal speeches said:
Consistency in option trading is not easy. As humans, it’s one of our most difficult virtues because we are so attracted to novelty.
But, consistency over a long enough time horizon always wins.
For us option traders then, the only way to practice consistency is to stay in the game and keep on improving our “art”.