Topic: How To Invest

What is Pat’s commentary for the week of July 9, 2019

Article Excerpt

A boom seems to be underway in newsletters that purport to show you how you can make money in options trading. These newsletters claim to have used digital technology to “crack the secret code” of success in the options market. They can point to a string of options trades they recommended that made money. I suspect the only secret code they’ve cracked is the one that showed them how to use digital marketing to create a boom in options-focused newsletters, which once made up only a tiny part of investment publishing. The problem you have to overcome in options trading is the same one you face if you go to Las Vegas and try to make a living as a gambler. To begin, the gambling casino—“the house”—takes a percentage out of every bet. Likewise, in options, you pay a commission every time you buy or sell. Commissions are higher in options than in stocks, as a percentage of the sums you invest. In addition,…