tastytrade logo
uploaded image

Jul 11, 2016

What It Means to Be a Successful Investor | Truth or Skepticism

By:Josh Fabian

Black or white. Wouldn’t it be nice if the answer to every question had a very clear answer? Then again, if all answers were obvious a lot of “experts” and “advisors” would be out a job. That was the essence of this episode of Truth or Skepticism.


tastytrade has an objective of helping individuals understand that they can manage their own money and then we want to show those investors how. It isn’t easy. Ask us. Individual investors are purposely kept ignorant by financial firms. Perpetuating that ignorance breeds a fear we as investors are not capable of managing our own finances. This is the very foundation of the fee-based system on which financial firms depend.

The NFL is an incredibly successful and profitable organization. Sundays, Monday nights and even Thursday night have become sacred for watching football. Social engagement through avenues such as fantasy football have helped educate and engage countless viewers. The NFL is a dynamic, well engaged entity whose very success is a result of educating viewers. It is the exact opposite of the ignorance needed for a fee based system.

Investors see their choices in black or white terms. Either turn their assets over to someone or actively trade. Like all things in life, including both Tom and Dylan’s hair, actual answers are often gray.

A total package investor, as Tom explained, is someone who sees that passive investing and active trading as a Venn diagram. They understand we can have a passive core portfolio and then use options to improve cost basis. A total investor is product and strategy agnostic; they use whatever product and strategy suit offer the best probability of being profitable. They take advantage of technology and want to learn how to take control of their money.

Dylan believes this year’s presidential election has shown people no longer want power centralized in a few hands. tastytrade is out to create a similar revolution. We want to decentralize the power of financial institutions and place the decision making back in the hands of individuals. Still, the allure is advertised as “This can be you if you invest with us,” perpetuating that centralized fee-based system.   

Over the course of the past two years, after fees, passive investors on average have lost 2%. Tom posed a very fair question when he asked where else a performance like that is acceptable? The question is rhetorical since there is no answer.

Limited profitability in exchange for higher probabilities of success. Want the secret sauce? That’s it. If we’re willing to accept a limit as to how much we can make, we can drastically increase the likelihood of making money. It is why we sell options instead of buying. There is a maximum we can make when selling options as compared to buying, where there may not be a ceiling. However, there is a reason why so many long option positions expire worthless. That same reason is why we sell options.      

Josh Fabian has been trading futures and derivatives for more than 25 years.

For more on this topic see:

Truth or Skepticism with Dylan Ratigan: July 7, 2016

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Related Posts

tastytrade content is provided solely by tastytrade, Inc. (“tastytrade”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. tastytrade, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastytrade is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. tastytrade is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options, futures and futures options are not suitable for all investors. Prior to trading securities products, please read the Characteristics and Risks of Standardized Options and the Risk Disclosure for Futures and Options found on tastyworks.com. 

tastytrade is a trademark/servicemark owned by tastytrade.

tastyworks, Inc. ("tastyworks") is a registered broker-dealer and member of FINRA, NFA and SIPC. tastyworks offers self-directed brokerage accounts to its customers. tastyworks does not give financial or trading advice nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastyworks’ systems, services or products. tastyworks is a wholly owned subsidiary of tastytrade, Inc (“tastytrade”).

tastyworks, Inc. (“tastyworks”) has entered into a Marketing Agreement with tastytrade (“Marketing Agent”) whereby tastyworks pays compensation to Marketing Agent to recommend tastyworks’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastyworks. tastytrade is the parent company of tastyworks. tastyworks and Marketing Agent are separate entities with their own products and services. tastytrade has different privacy policies than tastyworks.

Quiet Foundation, Inc. (“Quiet Foundation”) is a wholly-owned subsidiary of tastytrade The information on quietfoundation.com is intended for U.S. residents only. All investing involves the risk of loss. Past performance is not a guarantee of future results. Quiet Foundation does not make suitability determinations, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of Quiet Foundation’s systems, services or products.

© copyright 2013 – 2022 tastytrade. All Rights Reserved. Applicable portions of the Terms of use on tastytrade.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastytrade’s podcasts as necessary to view for personal use.