Thursday, January 1, 2009


I'm a sucker for cheesy infomericals. Don't get me wrong - I don't buy the garbage they try to sell but I will watch their sales pitch. Some of my favorite infomericals are the ones selling trading systems. I just caught one today called BetterTrades.

The basic idea is that BetterTrades can make you money trading options in any sort of market condition. They especially rail against buy and hold strategies, as many long term investors are feeling bad these days due to the bad markets. The commercials seem to be completely devoid of their specific strategies and instead want you to attend one of their free seminars to find out more. At that seminar , I am told they sell you on attending a 2-day seminar that costs $3,000. Once you attend the second seminar, they sell you on trading software that costs $6,000.

Sounds like a lot of money, right? But wait - Better Trades has a secret weapon...

bettertrades guest speaker jimmy johnson

Jimmy Johnson! From their website:

Jimmy Johnson is a recent graduate of the BetterTrades Market Essentials course and an NFL commentator. He will be the keynoter at the Traders Super Summit. Having been affiliated with BetterTrades for learning stocks and options trading, Jimmy Johnson is uniquely qualified to share his experiences at this year's event.

Stock options have been a real boom for market hucksters in the past few years. It amazes me that individuals with little investing experience think that trading options will pay off. A few years back, I attended a trading expo in Manhattan. Most of the salesmen were pitching stock option trading stategies with exotic names such as the condor and the butterfly. These typically involve the simultaneous purchase and sale of several options and are basically there to get investors to rack up as much money in trading commissions as possible. I was amazed that many people in attendance were ferverantly taking notes as these salesmen spoke.

The popularity of options trading with amateurs makes me think that a covered call strategy is an excellent choice for today's market. Simply buy high quality stocks that you intend to hold for at least several months and sell overpriced calls to amateurs.