“Options? Never Touch Them, That Stuff is Toxic!”
You’ve definitely heard this warning. Your distant relatives, even some so-called “veteran stock traders” will tell you:
“At worst stocks get you stuck; options can ruin your family!”
They’re half right.
If you treat options like lottery tickets (Buy OTM Calls), or like a madman naked selling what you can’t afford to lose, you’re truly on the fast track to bankruptcy.
But in the Silent Options system, we don’t play with fire.
Today I want to tell you a counter-intuitive truth: For mature traders, options are not only not risky, but the most perfect “safety belt” in this market.
I. Stop Loss Orders Are Deceptive, But Options Aren’t
Stock traders love setting “Stop Loss” orders. For example, buy at $100, set stop loss at $90. Think it’s safe?
Too young, too simple.
If tomorrow there’s major bad news and the stock gaps down to $80, your $90 stop loss won’t trigger, or will execute directly at $80.
Your moat is just paper in the face of a crash.
But options are different.
If you hold stock and simultaneously buy a Put (put option), it’s like buying full insurance for your stock.
No matter if the stock drops to $50 or $0, you have the right to sell it to someone else at $90.
This is one side of options: it’s not a gambling tool, it’s a shield.
II. Seller’s Privilege: We Have the Ability to “Rewind Time”
What’s most painful about stock trading? “I like this stock, but I bought too early.”
After buying it drops, you can only hold or cut losses.
But as option sellers, we have a skill that makes stock traders envious — Rolling/Adjustment.
When I’m bullish, but this week the stock dropped and my Sell Put is losing, what do I do?
I don’t need to cut losses.
I can close this option, then open a contract expiring next week or next month.
What’s this like?
It’s like failing an exam, but the teacher allows you to postpone the makeup exam, and pays you a makeup fee (because you devoted more time value).
As long as this stock has no delisting risk, I can extend the losing time through continuous Rolling, using new premiums to fill old losses, until the stock price rebounds.
Only sellers can still escape unscathed from losing trades.
III. The Biggest Risk is Called “Ignorance”
Why do some people blow up their accounts trading options?
Because they’re greedy. They only have $10,000 capital, but sell Tesla options worth $100,000, and open several times leverage. This isn’t options’ fault, it’s greed’s fault.
In our course system, I’ll teach you “Defined Risk”:
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Before placing an order, you already know maximum win and maximum loss for this trade.
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Through Spread Strategies, we lock maximum loss in a very small range.
As long as you fasten your safety belt, the roller coaster isn’t a disaster, but thrilling scenery.
📝 Silent’s Note (Key Points)
- Don’t Trust Stop Loss Orders: Real crashes don’t give you stop loss opportunities, but Put protection can.
- Learn to “Cheat”: If stocks go wrong you can only cut losses; if options go wrong you can Roll (adjust). This is time’s privilege to sellers.
- Ignorance is the Poison: Options themselves are neutral. In a gambler’s hands it’s explosives; in a risk master’s hands it’s a blast shield.
👉 Next Preview:
Alright, we have win rate (Awakening 01) and security (Awakening 02).
Next article, let’s talk about something most practical: How to turn your favorite stock into a goose that lays golden eggs?
We’ll reveal Buffett’s beloved “Cash Flow Perpetual Wheel” (The Wheel).