College Student Beats the Market With Options

Every week, I receive a lot of letters from readers about my books and articles. I answer all the letters, and usually don't post them. However, in my latest article for Marketwatch, "5 Trading Strategies If You Have Less Than $3,000," (http://bit.ly/tzoP3J) people left over 150 comments. Many wrote that college students had no business learning about the stock or options market.

Then I received a letter from Daniel Dombroski from the University of Connecticut. As you'll see below, Daniel has been successfully trading options while going to school. Although it's not easy, it is possible to make money with a little money. I'm sure that more than a few financial firms will be interested in speaking with him about a job or internship. 

Here's his complete letter to me: 

My name is Daniel Dombroski, an undergraduate student at the University of
Connecticut. I read your article, "5 trading strategies if you have less
than $3,000", and laughed a little when I read your suggestion on
implementing option strategies. I started trading options about three
years ago, right out of high school. The markets have been less than
friendly over the past few years to many investors and traders but this
increased volatility has provided many profitable strategies utilizing
options.

My experiences over the past few years have provided me with many unique
opportunities, the most important of which is my understanding of the
markets. Comprehending and capitalizing on movements has differentiated me
from other students who are simply being lectured in the class room. This
is a huge competitive edge in the minds of other traders and potential
employers. I have also been given the opportunity to educate other
students about options trading and how creating a well planned strategy
can protect investments in ways simply buying and selling equities cannot
accomplish.

I fully support students learning about options and how they can protect
and leverage themselves when using a well thought out, discipline trading
strategy.  What is important to point out is that results will reflect how
the trader views options . If you treat this vehicle like gambling then
your account will reproduce similar results. You may win in the short run
but the house always gets its money.

As a disclaimer, my primary trades are credit and debit spreads to
generate steady income. Correct sizing allows me to adjust my positions
accordingly. I plan on continuing to grow and adapt my strategy and rules
over time to reproduce results I am comfortable with.

In short, thank you for recognizing this investment vehicle for people
with small accounts (particularly college students.) I look forward to
reading more articles that encourages eager young prospective traders my
age to take active steps in creating their own financial independence and
securing a profitable future.

Warm Regards,

Daniel Dombroski