After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.

Today, it’s time to take a break from rheumy-eyed trips down memory lane and clear some fan mail.


Dear Sexy sexy broker man,

I found out today that we share the same dry cleaner, which is very exciting for me and she was telling me that she had a hell of a time getting rid of stains in your black suit, before you headed over to London.

I put her on to my friend Monika in America but it turns out I had the wrong idea and also curry ‘n’ chips isn’t a thing in the US.

But this is not why I am reaching out to you today.

The other day you mentioned that if you were a younger you, that you would be getting “down and dirty” in the equity option market in America and I was curious to know how your trade would have ended up.

I have some capital (and the energy!) that I am happy to risk and I was hoping that you could help me understand a bit more about “writing uncovered calls”.

I was very good at English at school, if this helps. I also love fast cars, if you get my drift and my Italian financial planner only seems to have his mind set on some of my other assets.

Maybe we could meet at Joe’s Cafe where you could to give me a guiding and steady hand?

Ms. P. Pitstop*.


Dear Ms. Pitstop*,

What a pleasure it is to hear from you.

It is amazing what a mess one can get into at a wake, especially when it involves old trading pals and expensive Mexican tequila.

As they say, “one tequila, two tequila, three tequila, floor” and that was Henry’s favourite tipple so we certainly sent him off in style.

Now, I must warn you that you will need a lot of energy.

I would highly recommend that you ditch any Italian lover’s financial planners that you may have entertaining you during weeknights. But if you have to, go for more of a German or Belgium lover’s financial planner.

Weekends are fine as the markets are closed, but during the week, you will want only mundane and boring distractions. You need to concentrate.

Remember that it is only your money that needs a good weeknight workout; not any of your other assets.

In the example in my article, those call options did indeed expire worthless as I suggested they could.

As I think I pointed out, 90% of all equity options do indeed expire worthless. That particular one was a real special situation, where all the stars were aligned at once.

Here is what they did on their very last day, which was 16th Sept 2022:

1. Reached a day’s high of 17c
2. A volume of 9,186 contracts traded
3. Open interest – This is the amount of contracts that expired with zero value.

Also this particular contract once traded at $18.95 and still closed at zero value.

How’s that for a short!

When I say all the stars had aligned, two days before I wrote about those options, the company’s CFO had, horribly, thrown himself out of a window.

When this happens, it generally means that the underlying shares will never recover. The bean counters really must have mucked up for him to take this action.

These kind of situations are quite rare and you have to be a bit prepared to put emotion aside and comfortable with making bags of cash in the midst of someone’s misfortune.

I did my first option trade in 1982, which was when a lot of this kind of window ledge acrobatics were going on, and probably before you were born. So I am lucky enough to know and understand the risks involved.

You have to be very strict in your thinking and definitely be without any distractions.

So thinking about it, you may be best suited to lose your option trading virginity in Australia before venturing overseas.

Here is a good place to start and maybe when I get back we can converse online a bit more, as after reading your correspondence, Mrs. B, for some reason, is now in control of all the things that need dry cleaning.

So, Ciao Bella,
Maybe another time,

*Real name has been changed to protect the reputations of all of those involved.


The Secret Broker can be found on Twitter here @SecretBrokerAU or on email at [email protected].

Feel free to contact him with your best stock tips and ideas.