Options are more complicated than that 4 page pdf lead you to believe…

You know when you finished that ‘options made easy’ document and thought "now I can forget about stocks and take over the world". Yeah, I thought that too. The worst part is that I went out and applied the ‘stock replacement strategy’ on 4 positions and achieved 200% returns in no time at all (about 3 weeks). I didn’t consider luck at all, decided that I was a genius and committed much more capital for my next round of purchases. Suffice to say I learned (lost) a lot in the second experience.

There is a silver lining, I learned two important things: options are riskier than I thought; and I am an investor, not a day trader.

This has spurred me to go beyond my 4 page options pdf and learn how to use them effectively in my investment strategy. Just because you can leverage more with options doesn’t mean you shouldn’t approach them with the same due diligence.

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