SysCW: Fraud or Failsafe? (Part 1)

The time has arrived to gradually transition away from covered calls and cash secured puts and to focus specifically on “Systematic Covered Writing.”

Is SysCW a viable trading system or is it a Rich MacDuff fraud?

In the last post I provided a partial listing of Rich MacDuff catch phrases taken from his e-mails to subscribers. The underlying tone is one of arrogance, of simplicity, of sarcasm to emphasize outsized returns… he makes SysCW sound like an ATM machine. Hardly ever a mention of anything negative and certainly little to nothing about risk or losing.

The most infamous money manager to never post a losing month was arguably Bernie Madoff. He is now serving a 150-year prison sentence for fraud (among other things).

I believe there is no such thing as a money machine in the world of trading. As a trader, I will have good times and I will have losses. If I never have a big loss then I am extremely lucky. If I never have a big loss then I may also be trading as a hobby rather than trading full-time for a living where I must trade in larger size and risk more money to pay the monthly bills.

Despite what some people say, never expect a “money machine” in the world of trading. Such a false expectation encourages trading too large and putting oneself at great risk for catastrophic loss.

When you see blatant arrogance like this surrounding anything financial, the best course of action is probably to turn the other way and run as fast as you can without ever stopping to look back.

Few things scream “OPTIONSCAM.COM!!!!!” any louder than this.