**** One of the things that I do not want to do here is turn this into only a blow-by-blow trading blog. On the other hand, I do want to show you the reality and practical sides of investing to meet and beat our 21.5% benchmark as well. The largest factor in any trading strategy and game plan of course is you!

You have to figure out what is going on with you, i.e. how much time you have, what your comfort and knowledge levels are and basically what do you have going on with your life at the moment. How much friction do you have going on? All of these things can and will affect your results, so you need to make adjustments accordingly.

Let us take the Apple option trade. As I have said, I only go naked when I can watch them or I have a very small position. Small being relative, and normally 10 contracts or $6,000 dollars is small. However, I realize this might not be small to you! In addition, lesson number #1 is preservation of capital.

Therefore, while I would normally let this position play out, I started looking at it from your point of view and do not want to start doing the BS move of, do as I say, not as I do, so I have to follow my own advice.

With that in mind, I am going to take all of the profit off the table on this play ASAP. Now I still want to follow through and show you what happens in the scenarios I have laid out, but my advice based on what I have going on would be to cash out and sit on the sidelines. There are many things going on that are causing me to do this.

The primary reason is that I have a ton of activity going on at the moment. I am breaking in a couple of Interns to help with the blog ( they actually know English unlike myself) and a few other things and please stop with the Bill Clinton references….. And on top of that, I have several new businesses and they all need some TLC. Plus we have a couple of new product launches going on here in the US and Canada.

To top that off, I just won a scholarship for a pilot program to go back to school for a year at what I consider to be one of the best private learning institutions anywhere, and I am sure you have never heard of it before. But I will say this about it. If I had a choice I would turn down a full scholarship to Havard or Yale in order to take part in this program, I feel it is that good.

What I am really trying to say is that I am busy. Our first rule of thumb on naked options is if you do not have time to watch them, get out, so I am going to do exactly that. If you get into the same boat, I want you to do the same.

While options are great and I have made $30,000 to $50,000 a day with them, I have also lost that much by not following the “ Pay Attention” rule. I do not want you to do that.

So, as soon as I get a chance, the official play on this is to take the money and run.

Cheers,
Andrew Anderson

PS I forgot to add the market sucks right now too….

**** I typed Zen into our image library and this popped out…

This entry was posted on Thursday, March 27th, 2008 at 8:24 am and is filed under 20 Percent Plus Returns, Investing, Investing Challenge. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.