Little Rishi

.....a blog about personal finance, motivational stories, deals, and special offers

Books
Amazon.com
Sweepstakes
Free Sweepstakes
Web Domain Registration
Go Daddy $12.99 Turbo SSL Sale!
Trusted by over 7 million customers!
Search Engine Submission - AddMe
Free Search Engine Submission
Free Search Engine Submission
Saturday, March 20, 2010
Weekend Quote from a Book - Options Selling
An insurance company tries to weed out drivers that it deems to be prone to accidents. Some of these may get insured at higher premiums (to account for the higher risk the insurance company is taking on them), and some may not get insured at all.

Your job as an option seller is to go through this exact same process. Just as most drivers do not have accidents, most of your options will never go in the money. However, as in insurance, a few bad accidents can be bad for the bottom line. An insurance company, therefore, tries to reduce the chances that one of its drivers will have an accident by checking factors such as driving record, age of the driver, type of car, etc. As an option seller, you will go through this exact same process except instead of drivers, you will be studying a market's “driving record”, historical tendencies, current and future fundamentals, etc. While an insurance company can in no way guarantee that the drivers it selects will not have accidents, it certainly can help its business by selecting only drivers who have what it considers a low chance of being in an accident. Thus it can lower its risk and increase its profitability. You can too.

- Source: The Complete Guide to Option Selling, Second Edition

by James Cordier & Michael Gross


Note: I am an Amazon.com affiliate. Please also see Disclosures and Disclaimer

Labels: , , , ,

posted by Little Rishi @ Saturday, March 20, 2010  
0 Comments:
Post a Comment
<< Home
 

See important Disclosure and Disclaimer

Favorite Quote
"Work is worship".
                - Author Unknown
Disclosure
This site, including blog posts, may contain reviews, links, banners, text and other forms of advertisements for products, services, courses, and so forth of companies of which we may be an affiliate member or for which we may get paid for referrals. This site may also contain blog posts for which we are paid, as well as blog posts regarding products or services of companies from which we may have received complimentary products or services.
Reward Surveys/Panels/Shopping/Contests
survey_reward_120x60
Job Search site
Indeed Jobs
Yahoo! HotJobs - Job Postings
Monster
CareerBuilder
Credit Cards
Insurance
Health: eHealthInsurance
Auto: www.21st.com
Auto/Home/Renters/Health:NetQuote
Travel
Phone Service
Investing
TheStreet.com 120x120 Best Seller Giveaway
Questrade
Babysitters
Find the perfect babysitter at Sittercity.com
Previous Posts
Archives
Disclaimers, Privacy Notice and Disclosures
  • Disclaimer

  • Privacy Notice

  • Disclosures
  • Subscribe to Blog Posts
    Add to Google Reader or 

Homepage
    Bookmark this blog site
    Contact Me

    Email