Options Learning Update : Building the Options Trader Mindset

So the BIG question is this :“How do investors like us who trade options and manage our own money, generate income regardless of where the market goes? And do it all in a way that let us make time for the people and things we love and still get wealth  or remain profitable.” This is the options trader mindset we are building…

This blog post is a new update on my Options Investing learning track. Tonight I came home energized from an advanced options trading class given by one of the Options trading experts in Belgium.  I learned about the greeks, different (spread) strategies and portfolio management.

As my lovely Mrs. Dividendcake is not at home, I can reflect on where I am with my learning. Am I on track to meet my objectives? What did I learn so far?  What are the 3 Key Learnings that I can share with you…

My Learning Track

At the end of May 2017, I posted the blog post Why I decide to learn Options Investing ? and I wrote that I will start the 8 week learning track of OptionAlpha.com. At the same time I started with Listen and Learn in my car during all my commuting time to work.

Today we can say we finished learning track Week 4 from the “Fast Track” course. Two more compared to last blog post in July. I focus on the Video Tutorials which are 5 to 15 minute quick learnings. The Case studies I will do later.

The second way of learning are the podcasts in the car. Listen and Learn in the car. In July I listened to 60 podcasts and now in October I listened to 90 podcasts !  When I start the car in the morning and start the podcast, I am still excited on what I will learn. There are now 107 podcasts series so I have only 17 to go…! Each time I finish a podcast and I think…mmm…this one I want hear again in the future..I mark it as a favorite.  Listening to those podcasts helps me to keep learning and understand how options traders think and how they make decisions.

Now there is also a options trader question in the podcast where an option trader asks an interesting question. Very exciting as you hear questions that I as a newbie didn’t think about yet….

Three Key Learnings

Key Learning 1 : Dividend Stocks & Trading Options

I was surprised to find a podcast about dividend stocks within options trading podcasts. As you know I am a dividend investor at heart. It gives me a constant dividend income stream per month.

In this podcast Kirk helps you understand the four most important dates you need to know when it comes to dividend investing, including a complete rundown of the fictional arbitrage opportunity that dividend investors are continuously searching for during the ex-dividend date. Plus,he gives you an alternative strategy for purchasing the stock at a discount. Personally I never sell the stock after getting paid the dividend. I just want to accumulate the monthly payout.

Listen to Podcast 62  Dividend Stocks – Can You Buy Stock Just For The Dividend?

Key Learning 2 : Warren Buffett’s 5 Billion Dollar Options Trading Strategy

Another key learning for me was that Warren Buffett is actually an options trader in disguise…

Unfortunately his strategy and business setup is not commonly talked about in the media as most fundamental or value investors brag about Warren Buffett as their great example how to do this. In this podcast I learned why his most profitable business grew from $41 billion to $88 billion, namely the insurance business and how you can apply the same principles to your own investment portfolio.

Here the link  Podcast Warren Buffett’s $5 Billion Dollar Options Trading Strategy That Everyone Ignores

Key Learning 3 : Why more fundamental investors should trade options..

I know a lot of fundamental investors in Belgium. Fundamental investors are like the wooly mammoth; big, strong, powerful, don’t like critics…yet destined to become extinct in the future. And while there is absolutely nothing wrong with the core beliefs and activities of fundamental investors, I (and also Kirk du Plessis) do believe that the same passion and hard work could be applied to the options market with much better results and less risk. Even Warren Buffett, the biggest advocate for fundamental investing and long-term investment strategy is by many standards the single largest options seller in the market today as explained in previous podcast.

In this podcast you’ll learn that there are many similarities between options trading and a long-term, buy and hold stock investor. And that options trading can limit your risk.

Listen to Podcast Why More Fundamental Investors Should Trade Options & The Netflix Effect

Going forward

To build the Options Trader Mindset, I decided I need to consume as much options trading lingo and content as possible.

So since this week I started listening to the Daily Call Podcast of Option Alpha. Kirk talks about other topics related to (options) trading. Every morning I download the latest one and listen to it on my way to work. If you want a motivational podcast listen to this one.

Podcast Shut Up and Do Something…

In July’s blogpost I told you also that I like the simple options strategy of covered calls or selling cash secured puts. I like it because it’s simple to apply and beats the market with 24%. I continue to watch covered calls videos of options trader  John Greathouse on Youtube who reviews his covered calls and cash secured put trades in small 10 minute videos. John posted recently his spreadsheets link. You can download the Google sheets here. During September I worked out my first covered call trade and called my broker to sell my first covered call.

Follow my portfolio updates to see if I was profitable… I will also try to work out a cash secured put trade.

My learning track for next months will be a 5 STEPS ACTIONPLAN :

• Finish the 8 week Fast Track Options Hacking Guide and ALL weekly podcasts (today 107 podcasts)
• Learn the cash secured put trade strategy and maybe execute 1 trade
• Start learning the TWS Options Trading software
• Continue to follow free webinars and watch youtube videos about options strategies
• Start watching Live Trades to learn the strategy and the execution of the trade. Here’s the URL link.

We are committed to keep this learning track going !

We hope you learned something from this blog post and keep on following us. We will share our story as we progress on this investment strategy journey…

Thanks again for reading and until next time !

As usual we end this blog post with a quote.