Buy & Hold Is Dead....

....But Full Time Options Trading is Alive & Well.

This is a very disturbing story that the LA Times ran yesterday.

www.latimes.com/business/la-fi-trading25-2009aug25,0,2266089.story"

Just to let everyone know that Options and Currency trading are two of the most dangerous and difficult asset classes to trade. 1 out 10000 actually make money doing it.

If you thought trading equities was hard, options/currencies/commodities are 100% dominated by big institutions, what makes you think that you are smarter, better funded, and have better technology then the Swiss Banks and Goldman Sachs of the world?

Also a fact about options trading, some 90% of all options contracts expire out of the money and are worthless. You are racing against time and most importantly can get crushed by volatility. Its always better to be a seller of options then to be a buyer. Most institutions like Citadel/Goldman sit around the whole day waiting for the middle aged simpleton sitting on his deck in his flip flops to execute against them. They are selling the entire day, they are fully hedged and will never lose money on the sell side. They rarely go long options if they are not properly hedged. Bottom line, the institutions have more money and more economically advantageous ways to hedge themselves. The retail investor is not sophisticated enough to keep up with technology and advanced math models that the boys on Wall Street use to screw the public.

You have a better chance of winning the lottery...TWICE! Then making money consistently trading options and currencies.

Its still a very good read on how the Dollar & the Dream Mentality of America has gone overboard.
I am very empathetic to the plights of common people who have been destroyed in this crisis. With the job outlook very bleak and consumers tapped out it surely looks like things will get bleaker.

But...

.....Americans need to rebuild not figure out new ways to destroy themselves.