High Risk Exposure

1. High Risk Exposure -after the earnings are released, the
Implied Volatility will immediately shrink often know as
“volatility crash”. The options premium will lose its value
so much that if there is no substantial movement in the
stock price to push the option deep in-the-money to cover
the losses, even it gapped in your favour, and you can still
lose money.
2. Gambling – betting on earnings is all based on
predictions just like playing baccarat, you bet on either
banker or player base on intuition or gut feeling. Even with
positive earnings the stock still can go down, past earnings
does not guarantee that the same outcome the next
round.

The No.1 deadly options trading trap

The No.1 deadly options trading trap

Leverage using options on the earnings announcement hoping for a
big catch when the stock gaps is the No.1 Options Trading Trap that
most options traders fall into and are unaware of.

Many naive options traders and wannabes who have been misled into
playing earnings don’t know the dangers that they are facing. It is a
real killer. Next time you hear this, you better run fast.

These people don’t know that the very occasional big win traps them
into believing they can make money doing it again and again. It can
ruin their lives as they are gambling their life savings away.

It is my duty as a trainer myself to expose the hidden dangers to the
public and alert them of the consequences.

“The market does not beat them. They beat themselves

“The market does not beat them. They beat themselves,
because though they have brains they cannot sit tight”

– Jesse Livermore



Section 5

Becoming a Better Trader

The choice to trade online instead of seeking the help or advice of the
traditional stock broker has become popular. Most people are attracted
into online trading because it offers outstanding opportunities to enjoy
unlimited freedom. However unlimited freedom also comes with
unlimited self-sabotage, there are several options trading traps that
you should be aware and not to fall into them if possible.