Andrew Baxter is one of Australia’s most sought-after speakers in the trading and investing space, speaking to tens of thousands of people each year. He has spoken alongside some of the world’s leading names, including Robert Kiyosaki, Anthony Robbins, Sir Richard Branson and Tony Blair.
Andrew is well-known for his ability to clearly articulate the complexities of financial markets in plain and simple language that anybody can understand, with over a decade of high-profile public speaking under his belt.
You can follow him on Twitter @ausinvedu.
For more on Andrew Baxter, click here.
After nearly 20 years as a professional trader in financial markets, I’ve taken the opportunity to trade virtually every instrument and pretty much every strategy. Yet over and over again, I return to my preferred four core strategies.
They’re the ones that offer the greatest consistency and that work.
So today I’ll tell you a little bit about where I apply those four strategies so you can see why they’re so important.
To Achieve Financial Success in the Markets…
Give Options a Fair Chance
If you want to clear out a room of investors, just mention the word “options.” They’ll shy away quickly, citing previous bad experiences, horror stories from friends or simply a lack of awareness of how they can use the most effective investment strategy in the markets.
Then there are those who have been “trained…” usually poorly. They’ve been taught to trade options like a stock trader. The predictable end is both sad and painful… and completely avoidable.
Regardless of which camp you fall into, I’m asking you today to give options a fair chance… and I’ll show you how to play them to your advantage…
The problem with those who’ve been trained by stock traders, or who try to trade options as stock traders would, is that they’re playing the game in only two dimensions. There’s only two directions a stock can possibly go: up or down. And there’s really no way to know which way they’ll go.
Essentially, it’s a 50/50 gamble before you even start!
If you add the leverage factor that options enable to a 50/50 guess, you can just imagine the train wreck that awaits you.
So start by changing how you look at, and trade, options. Think like a professional options trader. We trade the market in 3-D, and we rely on an irrefutable, 100% guaranteed event instead of guess work… and this makes a massive difference in our results.
And that 100% guaranteed event is… time!
Think about it. We can say for absolute certain that time will pass by — every minute of every hour of every day. Which means my number one cash flow strategy enables me to get paid just for time passing.
I’d say that’s one of the best cash flow opportunities out there.
So the question is: If it were really that simple, why don’t more investors use time to increase their cash flow opportunities?
The simple answer: greed and lack of understanding.
Too many investors are drawn — like a rabbit in the headlights — by the promise of high return and quick profits. It’s all about instant gratification. As a result, they lack the patience to get paid for letting the clock do what it does… just tick away.
Here’s a great way to do it…
The Power of Options: Selling Ice Cubes
Imagine you’re an ice cube seller (and each ice cube is a “call,” in options speak).
As soon as you’ve sold that ice cube, you get paid immediately. You have the cash in your hand. No waiting for payment at a later date and no worrying about what happens to the ice cube once it’s sold.
The buyer, on the other hand, bought the ice cube in the hope that it would grow so he could turn a profit. He’s taken all the risk, while I’ve taken none.
At the end of the month, if the ice cube (share price) hasn’t grown dramatically, the buyer effectively has nothing left… other than a cold puddle on the table where the ice cube once sat.
In other words, not only does the buyer have to get the direction right, he has to see that “growth” take place within a very limited period of time or else lose 100% of his investment.
So time is his number one enemy. Unlike the Rolling Stones hit, time is very much not on his side.
But as the seller, time is on my side and allows me to profit from a guaranteed event.
In short, selling call options is a powerful way to grow your investment account! And you can do so successfully by using my four simple and powerful rules, which ensure a high and consistent probability of success (I’m currently averaging just over 75% for the past 18 months).
I’ll share these rules, as well as a couple of alternative strategies, with you at the Irrational Economic Summit this October in Miami. I want to ensure that you have the opportunity for cash flow. More importantly, I want you to acquire the simple skills to play the game profitably.
See you there.