Ghost Education (Part 2)

I previously introduced an exemplar of what I am calling “ghost education.” Its title is what drew me to the article via a Google search and I discussed how the title seems to fit the marketing mold quite well. Let’s look now to determine whether the rest of the article is good as advertised.

How are we going to profit, Terry Lane?

The first paragraph defines “volume,” “options,” and “calls.” He makes no mention about profit.

The second paragraph explains why people trade call and put options. Lane also writes:

> Options can be risky investments that are often traded by
> advanced and sophisticated investors.

I would say options are not risky when traded by advanced and sophisticated investors who thoroughly understand them. When traded by newbies who have been blinded by outrageous promises of excess return, yes they are very risky. I see nothing in this paragraph about profit, though.

The third paragraph describes an options chain. Again, he writes nothing here about profit.

The fourth paragraph talks about volume and slippage. Once again, Lane writes nothing about profit. The article is only five paragraphs long, which means my sole purpose for reading must be immediately forthcoming!

With baited breath, I embark onto the fifth paragraph:

> Unusually high trading volumes can indicate a buying
> opportunity, according to The Options Playbook.

A “buying opportunity” suggests an opportunity for profit. Since the title said “How to Trade… for Profit” this would seem to be false advertising since profit and the opportunity for profit are different. Nevertheless, we can click on the link to see what Terry is citing.

The Options Playbook was written by Brian Overby. Overby is a Senior Options Analyst at TradeKing. I have watched a number of his presentations and I respect him a lot for his ability and approach to teaching.

In Overby’s cited article, however, no mention is made about profit. This is an article about open interest and liquidity. Why did Lane cite it?

Perhaps we need to read on to find out…