How to Make Profits in Your Spare Time

Option Sage submits : I saw an infomercial from Fisher Investments where Ken Fisher mentioned 3 attributes that he believes are keys to successful investing which can be crudely summarized as follows : [1]   Focus on long-term investing [2]   Expect surprises [3]   Stay ahead of the crowd by knowing what others don’t The first point is certainly critical and weeds out the greedy ‘ get-rich-quick’ traders from the patient traders.   Our policy here is that of ‘ play-to-win’ .   We like to be aggressive in seeking profits with short-term plays but we also recognize that if those trades don’t work out that we can still rely on longer term plays to end up profitable in the end .   The second point regarding expecting surprises asks the trader the question “ Are you managing risk well and do you have contingency plans in mind each time you enter a trade?”   While the second part of the sentence is important, the first is paramount!   No matter what you do, never violate risk management rules which we have discussed here in the past . The third point is a luxury in my view.   Of course, it would be nice to know what others don’t but it’s not critical.   B y definition only a small number can have information that the rest of the crowd does not have so if you are not trading full-time you have to find another way of making money without relying on staying ahead of the crowd. As I was scanning for trades over the weekend, I came across one trade which might in fact fall into the category of offering relatively attractive profits by relying on options rather than additional information.   In fact, I know many of our members find it hard to focus on the daily trades and would like to construct portfolios with the longer-term in mind .  As Phil mentioned in his classic " James Bond Investing " article, playing short-term positions requires constant vigilance and you need to ready to turn on a dime with small windows of opportunity and this kind of trading is not for everyone.  Even Phil has a rule of thumb that 75% of a portfolio should be in long-term positions like calendar spreads, buy/writes and covered calls, which generate lower returns but are easier to manage and have a wider margins for error. So, I set out with the goal in mind of finding a trade that could produce a 10% annual return, noting that this would lead to a doubling of your…