Options Trading

I had just attended a seminar in Novotel earlier this evening at 7pm. The seminar was conducted by Wealth Mentors and it is on Options Trading. There were two speakers for the entire session. The first speaker was Mirriam MacWilliams. She is the Chief Options Trader of Wealth Mentors and is a self-made millionaire. She trades for a living and she made over US$2 million in less than two years in the stock market with a starting capital of US$10,000. The second speaker was Aaron Sim. He is the CEO of Wealth Mentors and he has grown his business from zero to over $10 million a year in just 4 years.

Some of you might question why will I attend such a seminar when I am always promoting long-term investing? Do I have intentions to switch to a short-term professional trader instead? The answer is NO. My objective of attending the seminar is to gain more knowledge on the different financial instruments available in the market (and best of all, the seminar is FOC). I always feel that to be a good investor, we must always be open to new knowledge and information. Only with such an attitude can we keep improving ourselves to be better investors.

Basically, options trading is a method of leveraging your capital to generate high returns. So by having a 10% increase on a stock, it can result in an increase of 100% in options. I shall not dwell on the rewards/risks of options over stocks, interested readers can google it or read more via Investopedia.com.

There are many good points highlighted, but let me just share a few key points which is brought up during the session. Some of you might already realised them, but others might ponder about it:

1. Do you know how big the US market is? All the various US markets combined have a market cap. in excess of US$15 trillion. By comparison, Microsoft has a market cap of US$300+ billion, which is about 3 times as much as Singapore's GDP US$100+ billion. Having the largest market cap in the world, US market has the best liquidity and there are so many free sites providing information on US Markets. This makes investing/trading a lot easier, but why are there so many Singaporeans who rather trade in our local market and ignore the world biggest market?

2. The first key to a successful trade is the preservation of capital. This really surprises me when I heard it from the speaker. I have always thought traders are not as concerned about this rule. My perception on professional traders are very wrong and I am glad that I attended the class. I found out that there are actually many similarities between an investor and a trader.

3. Remain cautious after early successes. Many of us rake in huge profits but fail to protect them. Earlier gains are wiped out once complacency and arrogance seep in.

4. Create balance in your life. Even though investing/trading can bring you to the financial freedom which you seek, remember to enjoy the process with your loved ones. Get away from the market at least once a year to spend a holiday with your family. The Market will always be there for you, but the ones around you will not be always there.

I find the contents of the seminar pretty interesting, but the entire 4-day course costs more than SGD$6k, which puts me off. The objective of this course is to teach the 'trading rules' of Mirriam and allow any individual to profit consistently through options trading. Any of you care to share if such courses are really beneficial?