Essentially, as an expert in options trading, one of the major things that you need to look into in the market is the manner in which covered call writing investors obtain significant options premium and to use to take risk subsequently. The other major element is the way in which certainty of buying and hold strategy of an efficiently diversified, designed portfolio cannot be spared from the upsetting effects of the bear market liquidation.
What we can also never run away from is the fact that sophisticated investors and financial planners, in general, are more of a similar breed. It only implies that they understand various aspect revolving around options trading. They use unique jargon in trying to describe some issues surrounding the trade such as asset allocation, efficient frontier, diversified portfolio, annuity and estate planning among more.
Also, it is also necessary to understand that a floor trader may use a variety of terms on a particular day but they are different from an ordinary financial planner. Some of these terms include risk reversal, theoretical edge, dollar weighted deltas and implied volatility among others. However, it is comparatively significant for options traders in the current era to ensure that they grasp more knowledge in regards to nuances of volatility skew among other essential trade options aspects.
But in the same regard, it would also be essential to ensure that you teach or inform new traders that skew can be significant in explaining the reason using a particular strategy would be more profitable than other under specific market conditions. Furthermore, it should not be forgotten that this topic has always been difficult to elucidate hence making it rather confusing especially if not articulated appropriately.
Primarily, we have computers which are typical of high speed hence used in processing huge number of theoretical values and options quotes within the shortest time possible. But the other important element that you have to know is that an emotional but volatile pit trader also can offer substantial information to a well-educated and structured financial planner. It is not rocket science, and the truth of the matter is that you only need relative experience, an ideal calculator, and deep thinking that would make it possible for you to attain a desirable rate of return.
The market volatility has made it possible for the creation of an ideal storm that also tends to favor individual investor. But some financial planners and investors may choose to disregard the options theory precisely the covered call writing tactics. Several first-time options traders in this recent era also look upon the investment advisors and financial planners in providing them with assistance in making investment options and rebuilding portfolio.
An options trader may get desirable results if at all they consider utilizing financial planners and investors who understand the dynamics of the industry. It is all about making sure that the choices you make are rational and not necessarily informed by emotions or excitement. What makes one a successful options trader is open minded to learning and consulting to matters revolving around trade options.