Covered Calls and Cash Secured Puts (Part 7)

In my last post, I discussed conflicts of interest that potentially compromise the credibility of commentators cited in part 5 of this blog series.

The general conflict of interest principle suggests that whether or not those commentators believe option trading to be a worthwhile pursuit, they stand to profit by representing it that way.  Regardless of whether you, as a trader, make or lose money, they can profit by getting you to take interest, buy books, subscribe to services, and/or trade options.  More likely than not, the commentators do believe the positivity they spread because in the future there is potential profit to be had through “word of mouth.”  In other words, if they represent option trading positively and if I have success with it, then I may speak highly of the commentators to other people, which can generate additional referrals for them.

Whether the additional referrals occur, however, the commentators’ consistent positivity will generate some immediate revenue.  This alone makes it worthwhile for them.

If the commentators are sociopathic in nature then their external positivity toward the subject matter will be offset by internal skepticism.  This is often hard, if not impossible, for the critical thinker to judge.

Conflict of interest is always something to be on the lookout for in any discipline, field of inquiry, or business transaction.  In some cases it is blatant and egregious and in other cases it’s a moot point.  Does the last post deserve membership in my optionScam.com category?  Probably not because as discussed in part 3, CC/CSPs are less risky than outright stock ownership.  A great many people are willing to own stock.  At least as many people should be willing to trade CC/CSPs.

Another reason I am biased in favor of CC/CSPs is because of $BXM, which I will discuss in my next post.