Blogging at bivio

May 24, 2010

Blogging at

My name is Mark Wolfinger and I’ve been using options since 1975.  I want to share some of what I’ve learned about options to help make your investment club more successful.  As a 23-year CBOE market maker, author of three books on options, and a 10-year options educator, I believe I can provide useful information and answers to questions.

Some of you may already know me because I’ve been replying to questions in ‘Know Your Options’ at bivio for several years.

Options and Clubs

Traditionally, investment clubs invest carefully by taking the time to do research, compare companies with each other, and select a business whose stock they want to own.  Over the years, these clubs build a substantial portfolio of growth stocks.

I’m not suggesting that you do anything different.  However, many clubs currently use options as part of their overall investment strategy, and your club may want to do the same.

Options were created to reduce risk, and I hope to encourage you to use them that way.  Many traders prefer to use options aggressively, seeking very high returns (and simultaneously accepting significant  risk).

I want to be clear upfront.  I don’t believe that investment clubs, or the vast majority of individual investors, should use options to aggressively seek big profits.  To me, that’s gambling - or placing your money on the outcome of an uncertain event - with no edge.  The main purpose of investment clubs is to help educate each of its members, allowing them to eventually invest on their own.  It’s true that many clubs are more than mere places to learn.  They have serious money on the line and the goal is to earn a good return on invested capital.  If your club is in that category, options can provide excellent opportunities for reduced risk as well as for increasing the ratio of winning to losing trades.

Along those lines, I always stress the more conservative use of options.  It’s a personal choice when deciding whether to invest aggressively or conservatively.  Each club must make a group decision on investing ‘style.’

I’ll make this thrice weekly blog suit your needs if you let me know what you want to read.  This blog is about options.  I cannot help you pick stocks, nor can I render any opinion on whether a specific stock should be bought or sold.

I plan to discuss options: what they are, how they work, and how they can be used by investment clubs.

If you have topics for discussion, please submit ideas.

Pre-polling tells me that most of you want to get stated from the very beginning - and that means the most basic concept of options.  I'll do that, beginning next Monday.  For the remainder of this week (Wed and Fri), I have other topics to mention.

Mark D Wolfinger

Expiring Monthly: The Option Traders Journal