Professional Option Traders Reveal their Personal Favorite Strategies – With Price Headley and Michael Gross
Michael: Hello everybody, this is Michael Gross of OptionSellers.com here with your Option Seller Radio Show. We have a very special guest for you this month. This month’s guest is Price Headley. Price is the founder and president of BigTrends.com. He is one of the nations most well known experts on options trading and technical analysis. Price was also inducted into the trader’s hall of fame in 2007. Price, welcome to the show.
Price: Thanks Michael, great to be here.
Michael: Price, I know you’re very familiar with many different types of options strategies. I’m sure several of our listeners have been to BigTrends.com. It’s a very informative website. Maybe we can start out, Price, by you just telling us a little bit about your background and how you got started in the trading industry.
Price: Sure. I was a student at Duke University, actually, studying to be an equine veterinarian. My family’s been in the thoroughbred horse business for generations, and I think I was going to go down that path and then got hooked into a trading contest, a collegiate contest, where ironically I was in the bottom quartile of participants in a four month contest with a month to go, and realized I needed to do something different. So I started actively trading it every day. This is just paper money back in the late 80’s. Turned around and finished in the top 1% of participants and said “Yeah, I think there’s some opportunity here, something I’m really good at, so I told my dad I wanted to do something more conservative than thoroughbred horse breeding. I wanted to trade stocks and options. He thought I was a little crazy, but actually it worked out really well. That was kind of a formative point for me of realizing I really enjoyed more active trading and saw lots of opportunities there. That was back in the day before the Internet, just reading the paper and seeing things that were happening. Now, of course, there’s just even more at all of our fingertips with the Internet, and the ease of access of information.
Michael: Okay. So tell us about BigTrends. What do you provide there? How can investors benefit from that?
Price: Yeah, sure. I launched BigTrends.com back in 1999 and did it because I thought such a push for information on the web. At the BigTrends.com site, for starters, a lot of free educational information about active trading, and, in particular, you allude to option trading. I’ve always felt like once you learn the core principals of how to find the right stock or market to trade, you of course then can learn option strategies to figure out how to trade that with a lot less capital and a lot more potential return on your investment and still control your risk. We teach people all kinds of strategies, not just in technical analysis, which is pretty much a driving factor for active traders, but then also aspects related to the psychology of trading related to how to build your trading plan. Really just all the different aspects that a trader’s going to go through to assess how to create essentially a business plan to be successful in trading over time.
Michael: So, if somebody wanted to be a self-directed trader or, especially, self-directed options trader, your site would really show them a system of a way to get set up to do that.
Price: Exactly. Whether you trade stocks, options, even futures, you can apply those principals, but yes, the options is really our focus so that you can really take more control over that part of your portfolio that you want to control. We don’t tell people that you shouldn’t put all of your money into options strategies. We recommend diversification across a lot of different vehicles, but for that piece that you want more of a kicker on your portfolio for additional growth, and then come opportunities. We see more and more people taking that step to empower themselves, and, of course, education is really the starting point to have the proper knowledge to then do things correctly over time.
Michael: Okay. You authored a book, Price, called Big Trends in Trading. It’s an Amazon.com investing bestseller. Can you explain a little bit about what that title means and what type of an approach you recommend in the book?
Price: Absolutely. So, Big Trends in Trading, I really wanted to take a more quantitative approach in terms of showing people. I wasn’t just talking the talk but actually backing up what I was suggesting as the appropriate strategies to have a meaningful edge by actually showing a lot of systematic trading that I had done and testing that I had done, so actual results based testing. Everything we do here at BigTrends is really geared around that philosophy, which is it has got to have a meaningful edge, not just a little edge, because you’ve got to, obviously, as a trader overcome the cost side in terms of the commissions that you pay, plus any of your other setup costs for your computer and what not. Basically, our view is looking at systems that had a meaningful edge. I started BigTrends in trading with really the overall market-based systems how to really effectively time the market. A lot of the conventional literature says you can’t time the market, but my experience has said that there are a lot of opportunities where you can time the market. More importantly, all of the big mutual funds will tell you that you can’t because they want to have you keep your money with them so they can keep collecting fees on your mutual fund money, but the reality is that would have you miss the best twenty days how much return you give up. But actually, if you miss the best twenty days and the worst twenty days, you’re still ahead of the game because of how painful those crashes can be if you’re invested. Of course, we also like to teach people on options, you know, how to profit from the downside as well as the upside. So, to me, options open you up to a lot more opportunities. We take big trends in trading from the overall market to then stock selection trading, including some indicators I’ve developed, like one called Acceleration Bands, which of course is, as the name sounds, geared around finding faster moving situations which is pretty much how I built my capital to be able to start BigTrends from money I made myself in the 90’s. Basically, from that point, taking you into options strategies and then some people even say the last chapter is the best one, which is the trading psychology money management piece, where there’s a lot of smart minds on Wall Street that have blown themselves up because they basically flew too close to the sign, had too much leverage, got too aggressive. So, it’s about how to keep yourself balanced through the invariable winning and losing trades and how to stick with the game for the long haul.
Michael: You made some great points there, Price, and anybody listening, if you want to take some notes there there’s some great insights to any type of trading there that Price just mentioned. Price, one of those things, the reason I bring it up is because we preach a lot of those same principles when we’re talking about applying options in the commodities markets. Two things that I wanted to touch on that you made a good point of there: One is the importance of systems, which we talk about a lot. I think a lot of people, especially investors I talk to, they start out on options “Oh, I’m going to try one here, try one there”, and a lot of people that just dabble end up losing initially because they’re just testing it out. The people that really benefit over the long haul use a system. They have system, they have rules they follow, and it sounds like that’s one of the big things that you’re talking about in your book.
Price: Absolutely. Those systems can be critical. If you’re just kind of saying “which way did you wake up on which side of the bed this morning”, and kind of just trying to react to the news, that reactivity is what gets a lot of traders in trouble. You really have to take a more proactive approach and, as you said, Michael, that’s what the systems approach will help you with.
Michael: Price, there was another point there that’s very interesting you brought up. Tell me if you agree with this. It’s been my experience that a lot of investors that aren’t real familiar with options yet, they tend to have a biased to the upside, where we have to buy and hope the price goes up. One of the biggest adjustments, or benefits, you could possibly make for any type of options trading really is it doesn’t matter which way the market is going. If you have the right options strategy on, you can benefit if it’s going up, sideways, or down, just depends on the strategy you have on.
Price: Absolutely. Like we were saying, it just opens you up to so many more scenarios. That was always the attraction to me to options. I’d say tell me which scenario you want- up, down, or sideways and under what timeframe, and we can construct an options strategy that will succeed if that basic view plays out. You can start cash-flowing markets that are going nowhere. You can, like you said, make money on the downside. As we all know, stocks fall faster than they rise. So, when you catch it correctly, there’s even more money to be made more quickly in put options, which are essentially rights to sell a security, which will become more valuable as the market drops. It really does open people up to a lot more opportunities, but as you said, the typical beginning trader comes in and maybe does some cover call options on stocks they own, still essentially neutral to both bullish types of strategies or just looks to buy calls, so I’m betting on the upside. You’re right, it’s a big conversion in mindset. You can’t just buy low with options, you can’t just think, “Well, stocks are down, so therefore I’ll buy some calls and it should start working it’s way back up”. You’ve got that time component on options are a limit life asset. So, basically, if you just sit still in a stock, it’s not going down anymore, but if it’s not going up and you bought calls betting on it going up, a lot of people, of course, buy the at-the-money calls that are about where the current price of the stock is, those are most vulnerable to the passage of time. So you really need to get speed of movement, which is why the techniques like the acceleration bands are so important to catch. That phase of a trend that’s moving faster than essentially what the market expects.
Michael: Sure, those are all great points as well. I’m going to talk to you a little bit about your preferences in trading here. I know you’re both an expert in technical timing as well as options, but in reading some of your blog entries and articles, CBOE and on your website, you also provide an incredible amount of fundamental data on stocks, the economy as a whole. Do you feel fundamentals play a role in technical trading?
Price: Certainly, fundamentals really create the backdrop. If you think of it as kind of a time frame sort of a differentiation, the fundamentals create your long-term backdrop and your technicals are much more of the short-term, sort of how your zigging and zagging within what kind of an environment fundamentally you’re in. Remember, also, it’s not just the environment we’re in, but the markets are going to anticipate when the environment is due to change. You know, if we’re talking about changes in interest rates, obviously interest rate policies had a huge impact on the bull market that we’ve had in the last seven years or so. Basically, you’re looking at that quantitative easing, creating that kind of easy money approach where really made stocks the only game in town, comparatively at least. From that perspective, that pushed a lot more money into stocks. When that starts to shift and you start to see when and if higher rates ever do come around, that obviously will change that fundamental, and not become more of a monetary landscape, but it’s still part of this bigger picture of fundamentals you allude to. You’ve got to be careful though about certain fundamentals like if you look at, say, the unemployment rate and the jobs data, that’s a very lagging kind of indicator. So yes, the unemployment rate’s been cut in half over the last seven or eight years, but basically if you say “buy because they unemployment rate’s low”, you’ve got to make sure those fundamentals are really catalyst in drivers of future impact. We put a lot of energy into things like earnings, because earnings are very important in determining the ultimate value of a stock, as essentially the amount of anticipated cash flow, not just now what it’s generating, and how it’s anticipated to generate in the future. From that perspective, I’d say if there’s one fundamental that I constantly look at, it’s earnings and how not just the actual earnings but how the stock is behaving after those earnings reports. So that’s a really good one to keep in mind, because good news tends to beget more good news, and ones will tend to pile on to positive news and start upgrading the stocks, so those things kind of almost become self-fulfilling prophecies when you’ve got a really positive earnings surprise. On the other side, when it’s starting to roll over and you start to miss earnings estimates, you really do see the analysts jump ship a lot and you see a lot of pressure on stocks that are missing their estimated earnings. Watch the news and, of course, watch how the stock behaves after that news with different rallies, after earnings news it also can be a pretty good sign that there’s still more institutions that want to be a part of that earnings story going forward. So, you get kind of an extended catalyst that can last from quarter to quarter and even from year to year.
Michael: Okay. Yeah, that’s very similar what we do over here on the commodities side, Price. We’re using the fundamentals as the background, maybe leaning on them a little bit more because we’re focusing on supply/demand here. From what you’re saying, it sounds like the fundamentals are the backdrop, and if you do get, say, a stock that gets a positive earnings, maybe you’re watching technical signals a little bit closer for buy signals at that point. Would that be fair to say?
Price: It would be fair to say that, assuming you’ll align your technicals with that backdrop of the fundamentals. If they don’t align, you’ve got good fundamental news but you’re seeing things that look bad technically, we kind of will pay attention to that, but maybe just not try to take those trades where you don’t have that alignment between the technicals and the fundamentals. So, to us, a lot of traders think, especially newer traders, when they get into the game they’ve got to trade every day to justify their choice to be a more active and more involved trader a big part of their time, but, actually, a good thing to remember is that being a good trader means you’re first a good observer of what’s going on. You know when the odds are in your favor versus if they’re not in your favor, you get these cross currents between those technicals and fundamentals, and you learn to back off and that it’s okay to have a good portion of cash if you don’t have a clear edge, and wait until you have your edge to start to then make your investments accordingly.
Michael: Okay. Let’s talk about technicals for a minute. I’m sure you could probably talk to us for the next eight hours about technical trading. From a real technical guy like yourself, do you have any favorite indicators that you like to lean on?
Price: Absolutely. There are several that I go back to again and again. I’ve mentioned my Acceleration Bands, which people always ask “Is that like a Bollinger Band”, you know, John Bollinger developed a standard deviation band that’s become a real staple in a lot of people’s analysis. There are some similarities to it. The difference I would say with Acceleration Bands is they factor in the trend component more, in addition to the volatility component. We want to know what the expected range of prices should be for a stock or a market, but then we want to know when it moves out of that expected area. That’s when you see shifts in people’s perceptions of value, that’s when you see major trends develop to the upside or to the downside. We’ve added in other indicators, some of which are out there on most platforms, for example, Larry Williams developed an indicator called the Percent Range Indicator, or often just called %R, and it measures where the stock is in it’s existing range from typically a low to high range, 0-100%, essentially is what we look at. We’ve found that actually stocks that continually stay in the upper quintile, that is, the upper 20% of their readings, are stocks that are usually continued to make higher and higher prices. So, therefore, it becomes almost a trend definer when something is staying in that “over bought” area. A lot of people have been trained in the technical world that over bought is a very bad word- that you should be looking for the downside. We found that, actually, over bought can be very good if it fits a certain profile. Does that idea that in an uptrend, sure, strength begets strength, but people want to be a part of things that are going up and want to bail on things that are going down. So, sometimes in the bottom 20% where you see some of the crash-type scenarios happen for stocks and markets, or the institutions keep saying no, they don’t want to be a part of that, they want out. From that perspective you’ve got to sometimes retrain yourself, and that’s what we’ve ended up doing at BigTrends a lot is retraining newer traders that come to us or traders that think they know how it works from other things they’ve been doing, and saying yes, in a trading range, over bought/over sold, it’s kind of just going to chop around, up and down. We’re looking for the more meaningful moves where you get really a flush. For example, January of 2016, beginning of this year, you had just a quick initial gap down in the markets very first day- very unusual. Usually that’s a positive day, more often than not, to try and see if we can get off to a good start for the new year. It gaps down and then we fall through the downside right behind that, and that led to really several weeks of persistent selling pressure in January. That created a real opportunity for downside traders in put options or, you know, other strategies geared toward the bearish side for options. So, my view is that you have to see something like that through the Acceleration Bands or through the %R, what we call the BigTrends way, which is just looking at those top 20 and bottom 20 percent areas where something can really start to really move more dramatically. Make sure, if you’re the typical trading range trader, that you don’t get caught trying to fade or bet against those over bought periods and think it’s going to come down or in over sold periods think it’s going to bounce back up, because as the old trading motto goes “the markets can remain ‘irrational’ longer than you can remain solvent”. So, the idea becomes see what the wind up trend opportunity is and learn how to take advantage of it. One of the nice things too, Michael, that we have showed people within say a %R trend phase is re-entry strategies. Once you see that first break down point, how do you get back on the wagon to play it for another pot down after a bounce? What we have taught and found quite useful is finding these what we call “re-tests”, and variably, of course, you’re in a downtrend, you will get a bounce. It might be a one or two day kind of a bounce on a daily chart, the short-covering rally kind of phase, and the question is, is that the bottom or is that just a quick short list sort of flush of some of the we cans, and then you see it stop, and you see it go into another leg down.
That retracement phase is really where we find some really good, especially on a risk-adjusted basis, a really good opportunities to hop on board a train. If we’re wrong, and it does violate that little retracement area, then we’ll get right back out, but if we’re right about it kind of retracing and holding into that support of resistance, then we get the wonderful entries within a trend. That’s something a lot of trader’s miss, is they think “Oh, I missed the first breakout move, therefore I’ve got to watch from the sidelines. I can’t chase it now, it’s too late.” Yet, you’ll go back and look later and see wow, there’s a lot more life in that trend. We show people those retracement points to get back on the horse. Often times two, three, four, five times in a daily chart trend we’ve seen some that have lasted up to as many as ten really good re-entry points before that trend will finally fade. So, if you’ve got multiple times you can hop on effectively and then you finally get stomped out on a trend, it gives you a lot of confidence to say “okay, I can keep my risks low. If I’m wrong, I’ll be out quickly”. Especially with options that’s important because you don’t lose a lot of time, and if I’m right I catch a wonderful spot to hop on board for the next trend phase.
Michael: Thus the term Big Trends.
Price: Exactly. That’s what we’re looking for. Leave the little trends to everybody else and focus on the bigger trends for sure.
Michael: Okay. Let’s talk about options strategy a little bit. Most of our listeners here, Price, are options sellers, but I’m sure a lot of them are interested in all different types of options strategies. I noticed BigTrends offers quite a bit of information, courses, and resources on trading options in general. Having experience in so many kinds of options trading, do you have one or two favorite bread and butter options strategies that you tend to favor in your personal trading?
Price: Well, the first step would be to identify that there are opportunities, I believe, on both the selling side of options and the buying side of options. We know markets don’t trend the majority of the time, although there’s always a bull market and a bear market somewhere. That’s why we look at, of the 4,000 plus optionable stocks in the ETS, we probably look at several hundred of them we consider to be liquid and active enough to handle plenty of volume for our subscribers. On the sell side, we tend to prefer the credit spread approach where you’re sewing an option out-of-the-money, so you’re benefitting from that time erosion. Then, at the same time you sell one option, you’re buying another option a little further out, a cheaper one to protect yourself, so you’re still getting that credit, that initial premium, in that an option seller wants, but you’re also protecting yourself and defining what your worst-case risk is. We just found that we just like the credit spreads better for the defined protected risk. You know, if the market has a crazy gap or stock has a crazy gap, then you’re on the wrong side of it. You’re avoiding that bigger hit in the case of some kind of really bad news day that goes against you. So, defining your risk is very important, and we always want to go into a trade knowing what our maximum risk is on the trade. So, that’s why credit spread’s a favorite neutral to time-based strategy to collect premium.
Michael: Okay, so your preferred selling strategy is the vertical selling spreads.
Price: That’s right.
Michael: Sure. Okay, that’s some great insight, Price. Let’s shift gears here a bit and talk about today’s market. There seems to be just kind of a general sense of anxiety right now about the state of the world and the markets. Are you seeing that reflected in stock option values you follow? Is anxiety still driving the VIX or do you see it calming down now?
Price: Well, certainly the VIX has really plunged back down, you know, as the markets have rallied back up here and by mid-April the volatility indexes have really fallen. You know, those things tend to move kind of in opposite fashion as the stocks were dropping. In January, you saw that big volatility spike upwards, so those things and patterns really haven’t changed, in my view. We do expect to see a lot of second half volatility in 2016 as we head into and even after the presidential election coming up in November. We would expect, as you look back when we elected new presidents back in 2008 and also in 2000, those were pretty rough times for the markets there in the second half, and into really even the beginning of the next year, if not further. So, our view would be that, not to say we’re expecting there has to be another great recession and another 2008 necessarily to kind of collapse, but we are expecting that we will see more volatility. Of course, that’s where you can kind of use options accordingly. One caution of course would be some people will look at the VIX and look at the VIX options and think, “well, the VIX is at 13. If I’m buying a 13 call or a 13 put it should be the same price”. Well, it’s not, because the VIX is priced against the futures on volatility, which are expecting that we will see a snap back in volatility in the second half. So, I’m not necessarily saying anything the market’s not already expecting to some degree, the question is can we get more volatility than what the markets expect? So, just be careful on that when you look at your options. You’ve got to make sure you’re pricing against the proper vehicle on volatility levels. Bottom line, we think that there is some bit of resonance, even as the market’s snapped back towards these highs, we see that people are kind of worried with the way the markets started in January this year, and worried about if that’s a pattern that is going to be played out again like what we saw in 2008. I would say, that’s a real simple, technical indication that you can keep an eye on with the 200 day moving average. That’s just a simple trend line looking back to the last 200 day closes. If you look back in 2008, we never retook that after the break down early that year. We got back up into it about April/May, tested it, and then failed there. This year, we’ve actually retaken it on the major averages, at least on the SNP, the Dow, the NASDAQ 100, the rest of 2000 has not retaken it, so the small caps are lagging here. We said stay away from those. Some other areas like Biotech and Healthcare have been lagging, you know, so if you watch just that simple trend line, that will tell you, in the longer term sense, kind of who’s winning the war between the bulls and the bears in that bigger picture battle. So for now, we’re back above it. We’ll see if we can hold it here, which will be a good sign if we can, and if we can’t, that’s probably where you’ll see a lot more caution starting to develop if things start to unravel below that support line, which is maybe a couple percent below current levels right now.
Michael: Price, do you have any gut feel for the year 2016 and the big election coming up? Do you see stocks continuing higher or do you feel like there may be another correction?
Price: I’m kind of at two camps there. I kind of gave you that little overview that we’re expecting more volatility in the second half. I think certainly in the short term, we’ve been rioting the up-trend signal that we got on %R and from the other tools back in late February, and basically have been benefitting from that kind of steady adjustment back up. I am expecting, based on history, the uncertainty, the fear factor, of who the president’s going to be. You know, we know we’re going to get a new one, one way or the other, but we don’t know which one, per say. A lot of potential of adjustments that can happen there, so basically I’m expecting that we’ll probably see some selling pressure in the second half. So, with that in mind, it wouldn’t surprise me to come back and eventually retest the lows some 10% lower than current levels right here in mid-April. My view would be that, short-term, we think we can get a little bit more out of the market on the upside, but, longer term, we’re expecting that the markets will probably have some adjustment down in the late summer through the fall, and then we’ll see what happens, how the markets behave after the election. The big thing, regardless of what you kind of lean towards on some of those longer term expectations, is you still have to trade what you see not what you believe, right? So, you can’t start to buy a bunch of put options here betting on it, and then, meanwhile, watch those get eroded further because we’re in a short-term up-trend, and then basically blow them out because you just couldn’t take the pain, kind of a thing. Of course, like in life, timing in trading is everything. Our view is pretty much short-term. We’re riding the up-trend while we can, but kind of keeping maybe a little smaller allocation, maybe a little less exposure than we might otherwise have with those longer-term concerns. Again, like we said before, you don’t have to try to hit a home run on every trade, you don’t have to be allocated heavily on every trade. You can, certainly, if you have those lingering concerns in your mind, you can always take smaller positions. You can always sit on the sidelines if you’re really not sure, but if you’ve got some opportunities happening in the short-term, you can still trade them, you might just trade them a little smaller. So, that’s part of trading too, is knowing when to pressure bets, when things will wind up short-term and longer-term, versus if you have some of those crosscurrents, when to maybe trade smaller and be a little quicker to tighten your stop or pull the trigger on a trade at a smaller profit target if you’re just feeling like, “Well, we’ll take it and be happy with it and move back to cash, and wait for the next low risk entry point”. That’s the big part of it, right now, expecting some of those crosscurrents we’re going to trade a little smaller and try to wait until we really see things line up, if we move into the second half in front of and after the election.
Michael: Okay. Price, I know you’re not a commodities guy, per say, but a lot of stock guys follow some commodities like gold and oil because it can have an impact on overall global economy. Do you follow any commodities prices like that?
Price: Certainly oil and gold have been ones that have been on our radar for a long time. Oil is one that we were real bearish on in the middle of ’14 and as we got some of our really major breakdown signals. Those downtrends, in the longer-term, still remain in place. We’re getting some stabilization in oil here, but certainly nothing that I would view as any kind of a longer term buy signal yet. So, we continue to side with being cautious on oil and meanwhile, gold though, the other big one that would fall into the commodities space, you know, that saying that started this year, we had some wonderful breakouts. So, my view would be that, yeah, that looks like it’s an improving trend that might create some real nice opportunities perhaps in the near term as we stay in this very accommodative monetary policy, not just in the U.S., but around the world. So, paying very close attention to gold here as we go through the rest of the year and into next year.
Michael: Okay. Alright, Price, it’s just kind of a personal interest question, but do you have a personal favorite investment book? Not counting yours or mine.
Price: Yeah, what I always tell people, I mean, there’s so many great ones, but Reminiscences of a Stock Operator by Lefevre. It’s based on the life of Jesse Livermore, the famed trader who lived some hundred years ago. Those principals still apply. I always have myself and my staff read that book at least once a year, because it’s just, more than anything, about the psychology of trading, how the crowd kind of reacts during different stages of a move, how Livermore essentially was trading it in the day and it’s a fascinating read and it’s one that those timeless psychological principles still apply, not just for stocks, but for any type of trading. I just think there’s something great about reading about what was going on a hundred years ago and seeing this stuff even with all the changes in technology, even with all the changes in computers, and what not, and hey, we can have a systematic approach, and guess what? Somebody’s still programming the computers, and that’s humans. There’s still a human element and you can’t eliminate emotions, but it’s like learning how to manage those emotions in your trading will, I think, give you a big leg up on the rest of the crowd.
Michael: It’s a great book and it’s still in print and they still reprint it today. It’s certainly a classic and any investor should read if you’re really considering being a trader. Price, as far as your website goes as somebody just coming there, just looking at BigTrends, where would you recommend they start? What resources would you recommend first?
Price: I mean, obviously, on the BigTrends.com site there’s so much free content there. That’s a great way to just kind of dive into the educational link on the top. I’ll walk you through a lot of free educational articles and content. Then there’s a way that people can, with my compliments, become a BigTrends insider. There’s a sign-up box you can just put in your name and e-mail, and basically you can get on our list for, not just the newest articles, but also other special education events. We do a lot of complimentary webinars, depending on the time of year and where we see things we want to point out to people that might be opportunities to consider. So, getting into becoming a BigTrends insider on that little sign-up box there, on the top right of the site there on BigTrends.com, gives people the ability to get invitations to those complimentary events from time to time. So, that’s become a real popular starting place and we realize that everybody’s educational journey is different. Some people can absorb a lot real fast, other people want to take it a little slower, and we tend to encourage people to make sure that you get educated first before you try to rush into trading, because, of course, you rush into trading without the proper education, the markets will give you an education of it’s own that probably won’t be as favorable to your portfolio as if you actually get properly educated first and really make sure you understand risk as well as the right way to trade going forward. We’re big believers that education is critical. A lot of people think they get out of school, when they’re done with school, for their life. I think that’s the exact wrong approach. I always say it’s better to be grieving growing than ripe and rotting. So, you want to make sure that you always feel like you’re looking to add that next edge into your portfolio, that next opportunity. I’ve been trading for more than 25 years and still always looking and testing for additional edges, additional things to add, because that just keeps you sharp. That way, you don’t get complacent, and the markets have a way of humbling those that get a little bit too overconfident in their ability. So, we always want to stay humble and stay in that constant learning mode. I think it’s a really powerful value that can serve you for the rest of your life, in trading and in life in general.
Michael: Great points, Price. One thing I want to mention to our readers and listeners is one of the things we talk a lot about is, not only diversification of strategy, but diversification of asset class. Both of those things are important. If you’re listening to our radio show here or reading our newsletter and you probably have an interest in either commodities or selling commodities options, a lot of people want to diversify into stock or stock options, or vice versa. That’s what Price does. That’s what BigTrends does. If you want to learn more about it, it’s a great website to learn more about stock options, stock option trading, and I looked at it and I certainly recommend it to anyone interested in that aspect of that asset class of stock and stock options. Price, I want to thank you. This has been a great interview. You got some good information to share with our listeners here, and we hope to have you back again at some time in the future, if you’re willing.
Price: Oh, anytime Michael. I really look forward to it. It was a lot of fun and I enjoyed it as well. Look forward to staying in touch and wish everybody great trading in the rest of 2016 and beyond.
Michael: Perfect. Thank you, Price, for everything.