Options Trading College


Subject: Planning

Instructor: The donFranko

Sessions: 2


Tools Needed: Willing mind, desire to succeed, sense of humor.


Training  Home


Entry is Key...Exit is Everything! TM

Session 1 

Greetings to my fellow traders,

This is the first step in your journey to financial independence. I would like to say I find it an honor to share my knowledge with you; and my sincere hope is that you come away with a sense of confidence on your way to wealth.

Let me begin by telling you how I first got stated in this fantastic business of trading for a living. I have always been fascinated by the stock market but figured (like most would be investors) you needed a lot of money to make money. My first exposure to the market was in 1984 when I worked for an investment firm in Los Angeles, California. I worked in a department called “Investment Control" and each morning the VP's would come out of their meetings and enter my department to place their trades for the day. It was an amazing thing to see them come in morning after morning and spend literally millions of dollars on stocks. What was more amazing was I had a board above my head that showed the buy and sell orders each day—If I only knew what I had in my hands at that young age.

Well, as I moved on in life, I left that company to venture out into the business world because I had dreams of running my own business; and I was not cut out to be an employee since I had that entrepreneurial spirit in me as far back as I can remember. Back then, I did not give stock investing a second thought because I was convinced you needed the big bucks like that company had to really make any money—that was a true statement back then since there were no discount brokers and day trading in the early 80's did not exist like it does today. In fact, just to put a small trade would cost you well over $150 bucks, so the small investor was way out of their league. Oh, and let’s not forget, there were no Smart Phones, internet and barely cable TV, and I had to walk up hill to my job in the snow…man I am dating myself here or what? Lol.

When I started my first business (direct mail advertising) I was young and very ambitious. I had high hopes of building an empire back then, but always had the desire to invest in stocks. I remember one day, while I was stuffing envelopes, a good friend of mine was telling me about a company named Microsoft (MSFT). He said they were new on the stock market and he believed they would be huge someday. He even went on to say I should take my $30k in the bank and invest it in (MSFT) and not look at it for 10+ years. I argued with him that Apple computer was the wave of the future and Microsoft was some silly little software company. I went on to lament that Apple would crush them because they made the hardware, and their operating system was much easier to use than DOS.

My reasoning was biased because I owned Apple computer equipment and knew first-hand the operating system was superior to DOS and the early Windows platform—we laughed about it and went back to stuffing envelopes.

What pains me the most is how prophetic he was and how short-sighted I was for not digging deeper into investing in either of these companies. After all, I was building an empire that would make me millions of dollars. I had no idea how the power of compounding and stock splits would make you richer than busting your hump in a traditional business.

As life moved on, and 10 years passed me by, I was now active in the stock markets; and when I looked up Microsoft, I realized that one piece of advice I received would have changed my financial life far more than my business could ever have. In fact, it gave me a whole new perspective on investing in stocks because had I took that advice and put my $30k into either stock, I would have over 150k shares of either stock because of all the splits they both went through over the past 20 years.

Of course, it’s always easy to look back, but what you need to realize here is this is not unique and it will happen again in the future, so, if you are young, start looking for upstart companies and buy all the shares you can get your hands on—then hold onto them forever!

Once I realized what should have happened to me, I began my journey mastering the markets and started to learn about stock investing. As I grew in my knowledge, another phenomenon was beginning in the trading industry called Options and Day Trading. There were a lot of new books and seminars touting the quick profits you could make trading options on stocks and one day, I was listening on the radio to an investor who was selling his seminar on how to make big money in the stock market day trading options. He said it did not take a lot of money or time to get started and you could use this thing called "leverage" and play options on stocks to make large profits in short periods of time. Because I had experience with options on real estate and inventories, I understood what he was getting at, so I decided to take his course, and when I finished it, I was amazed at the potential…I was hooked!

After careful study, and when I thought I understood his strategies, I funded my first trading account and proceeded to make my first trades; however, I did make the typical mistakes and thought I had it all figured out, but after a few thousand dollars of hard knocks, I started to wise up and take the business of trading seriously.

I can only hope you learn from my costly experience, and do not repeat the typical "new trader" mistakes as we move forward.


Trading (Start Here)


Controlling Losses



A month in the life



A month in the life


Day Trading Intro


Covered Calls



Naked Puts

Naked Calls




Model Portfolio

Day Trades

Lotto Trades



Training Links


Bull/Bear 180's

Day Trading

Risk Free Trading

Hit Options Lotto






Session 2

Now, the lessons begin!  

Those who fail to make and follow a detailed trading plan have already planning to fail!

The first thing you want to do is memorize my section: "Thou Shalt Not!"

Print these rules out and post them on your wall. Read them every day for one month and paper trade before you put a dime of real money in the market. The great thing about trading for your living is there is never that "once in a lifetime" opportunity to make a bundle of money—every day is a new day with endless opportunities!

Remember! If you practice first, you will reap much more later; however, If you play first with limited knowledge—as I did—you may never reach your potential because you will most likely lose all your money due to lack of proper knowledge and experience.

The second thing you need to do is set up a budget for trading. Too many times new investors jump in with all their trading capital on a trade they think is going to make them rich. I have been down that road friend and it leads to financial ruin. If you hit the homerun your first time, then you better watch out as you will have set yourself up for a big fall later and the loss will be substantial—slow and steady wins this race.

Build your account incrementally into a massive one, and once you have a large pile of cash, then you can venture out into more advanced trading strategies for your buried treasures.

Finally, the third and most important thing to do is write out a sold trading plan. You see, if you do not know where you are going, how can you ever expect to get there? You must have a precise reason to trade, a goal for your profits, and an exact contingency plan for unforeseen variables like news events etc. if you want to survive in the financial markets.

Now that we have these crucial things covered, you can start on the most important skill...STUDY! Experience is always sweeter when you gain wisdom first rather than pay tuition in the markets. Do not blindly trust anyone (including me) to give you the knowledge you need to make profits. Take the initiative to master trading by learning first and then applying that knowledge to gain your experience. If you never learn how to fish, then how can you expect to feed yourself?

I blindly followed supposed "guru's" of trading in the early years, and let me tell you, it cost me tens of thousands of dollars because I never learned all the pitfalls until I started experiencing them—most educators are more like snake oil sales men giving you the promise of riches without telling you about the definite downside to trading; therefore, allow me to save you a lot of pain and suggest a different approach.

When you seek the advice of others (me included) you should always consider it confirmation of your own due diligence before you make a trade with real money. Remember, we are not the fountains of all knowledge here at www.Optionradio.com , but we do have a few things to offer.

After you have completed your research, the next step is to test your picking abilities with small amounts of capital. I would recommend only going into the waters with a single option contract as you will be quite nervous for a while. If you trade stocks, you should not allocate any more then 2-5% of your total capital per trade. If things go your way after a couple of days, then you can add to a winner on pull backs.

Too many times we want to think we have it figured out, so we add to a loser with a double down mentality, and that my friends, is a first-class ticket to the poorhouse.

Once you are in the trade, stick to these trading rules:

 1. Keep greed in check by having a trading plan.

2. Never over leverage your position size with more capital than you are prepared to lose!

3. My rule of thumb is to secure my option profits with protective trailing stops and stick to them.

4. Remember, you cannot go broke making profits, but you will go broke chasing profits!

5. Be sure you are familiar with your broker, the market and your decisions on how to handle losses. Yes, I said losses, as you will no doubt have many of these along the way. Even the best laid out plans will get side swiped by unforeseen events, and a stop-loss will not help you there either—I will cover this later.

6. Always keep cash reserves to cover mistakes and/or capitalize on day-to-day opportunities.

7. Do not fully invest all of your trading capital in any single option trade as you will no doubt lose every time to fear of loss when the trade or market turns ugly.

8. Stay guarded and alert, as you are about to enter a war zone out there!

Remember my motto: Entry is key....Exit is everything! TM

It is easy to get into a trade, but know when to take profits is an art form that takes years of experience to master.


Profits Up!


The donFranko 


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