Wall Street’s no. 1 rule . No matter if you are Warren Buffet or Jimmy Buffet. No one can know whether a share will go up or down, if it will move sideways or in circles.” This is what Mark Hanna says during a lunch with Jordan Belfort on his first day on Wall Street.
If you have not seen the film Wolf Of Wall Street, with Leonardo Di Caprio, you should. You will learn something about financial “promoters” and the sale of financial products.
This sentence contains a brutal truth. No one knows what will happen to the price of one share. Not even the shrewdest analysts. Because the market is full of irrational investors and the number of variables that drive a title is out of reach of an investor, even professional ones.
This is why I love trading with options.
Eventhough it is almost impossible to tell where an option will go, it is easier to say where it will definitely NOT go. You can make this claim with options. You heard right, you can earn in the financial markets by deciding what price will NOT be achieved by a title.
- In 67% of the time prices move sideways or swing without actually moving.
- 17% of the time prices move upwards
- 16% of the time prices move downwards
Buying stocks we would have a 17% or 16% chance of winning at most.
Instead trading with options, we would have 67 + 17 or 67 + 16. This is a much better way of making money wouldn’t you agree?
It’s a fact no one has a crystal ball. But the statistics shows that you can “bet” and have more chances of victory. It’s like being a casino dealer. Remember, your financial future is your responsibility. And it is your job to learn to use the financial instruments that can help achieve better financial results.
To your financial freedom