Interview with Steven Place

Nick: I’m here with Steven Place of investing with options. I’ve known Steven for what is it five years now, somewhere around that and we’ve been long time friends. He used to be an electrical engineer. We went to college together. Now he does investing with options. He kicks ass in the market every single day and has some fun tips to share with us. Before we get started name one fun fact about yourself.

Steven: I’m terrible at basketball. I’m six foot seven. So I always get the question but it’s just something that you would expect for me to do well but it doesn’t happen.

Nick: I think this is the first interview where ill actually be the same height as you cause normally you tower over my head and shoulders.

Steven: My fraternity nickname was lighthouse. So that’s kind of where we come from. He never really actually calls me Steven. It’s always lighthouse.

Nick: I had to think about that one on the introduction. I can’t mess that one out. So basically we knew each other in the fraternity. We’re pretty good friends and tell them the story about how you went to school for electrical engineering and found out that all that. Let’s go down that route.

Steven: Okay. Starting off I went to Central Florida specifically because they paid me the most money in forms of scholarship to go there. I was a mercenary when it came to collegiate choices. I majored in electrical engineering because I had done computers and everything all my life however I knew I would always want to start my own business. Now the problem with a lot of engineering schools, if we talk about Stanford. Stanford is well known for being near Palo Alto in San Francisco, get to start up hubs. So a lot of people go out there and build their own businesses. Same sort of things with MIT. A lot of really smart people. A lot of second and third tier engineering schools especially in Florida there are just fewer schools into companies that work with the government, NASA and department of defence and homeland security and everything like that. when you have that sort of goal, when you have that sort of outcome for a lot of your graduates it’s going to change the process in which you do things so for example we had a class called senior design and the requirement for the first semester was not to build anything but to write a 100 page research paper about building something and if you’ve ever, ever designed something in real life or designed a business that’s an absolutely absurd requirement. It was that sort of things going on and so essentially what I did, I did have passions on the side which respect to business and finance.

I essentially did self studying in the library. I read Harvard business review. I got a subscription to the wall street journal. I was plugged into Bloomberg radio during my internship with a defence contractor and it sort of built out from there. Now when I did graduate and I continued in my career in the electrical engineering, essentially a lot of programming which is I do really like that stuff. I realized that it wasnt for me and I was very fortunate there was a confluence of events. this was back in 2007 and 2008, the market crashed and twitter came big and that’s when we started to see a resurgence social media and I was able to essentially hack the finance system and develop my career through social media tools, twitter, wordpress, modulus before it became live stream and newstream and everything like that and I was able to partner with a new company. They’re called stocktwits; it’s essentially the same platform as twitter except for stock sharing. So that is essentially how I’ve gotten to where I am.

Nick: So what are you up to no?

Steven: I run a blog investingwithoptions.com which also has a premium trading service stuff specifically towards swing trading and day trading options. We’re going to get into longer term retirement account portfolios into 2011. I’ve got that going on. I also have a live video show on Tuesday and Thursday and then a long forum show which is about an hour long on Saturdays. I also have, I’m starting to productize a lot of my stuff because I’m a very good teacher. Both my parents are teachers and so on. so I have something called earnings trade which is a video course to teach option traders trade options around the corporate earnings of ad twitches, easy to do once you get it and I want to teach you how to get it and I’m also developing out option which a lot of people every single question I get via email or twitter is essentially how can I become an options trader or what is the best book to learn about options and the books are good and I feel that chalk and talk and videos is much better and that's what I’m trying to provide everyone.

Nick: That’s awesome. So in your industry the success is determined by the numbers. How do you define success in your industry and outside your industry?

Steven: Alright. I warned you earlier I’m going to get a little philosophical on you. When we talk about success we're essentially defining what's known as a quality. When we look at art with there’s a quality to it. Now quality can sometimes be objective and subjective. Objective is essentially straight hard line results, trade performance and business metrics and everything like that and you also have quality which is more subjective. It’s relational. It depends on people and I prefer while you know you do have to have those objective definitions of success I prefer subjective. It is not the objects that you have. It’s not the objects that you own. It is the experience and the relationships that you develop with people and success is my opinion is not really an outcome. It is more of a process. If you define your process to be more relational.

If you say you run a consulting business, if you look at your clients as number, as objective numbers you’re going to be a lot less successful compared to if you just look at them relationally and you’re trying to develop a relationships with them. You’re going to see much more success that way.

Nick: That's an awesome analogy, way of looking at it because really like success for me has kind of evolved over the last couple of years. I remember we were in college and we always go back and forth like we talked about success and we talked about what our future plans were and more and more I’m seeing success is not so much a quality you can say people are successful but success is something that is internal. It’s something that I have to feel that I’m successful. It’s not whether other people feel that I’m successful as well. So that’s an interesting take I really like it a lot. How would you define someone that is bold? I talked with you a lot about my quest before I got on becoming bold and we discussed this but you go ahead and share.

Steven: This is going to build on what we just talked about subjective and objective. Now subjective essentially means it’s going to depend on the subject. So becoming bold is the ability to define your own success outside of what other people define as success. You’ve got the basic American dream, 2.2 kids, dog, white picket fence, you own your own home, you got to a job for 20 years and you get a nice retirement at the end. that’s fine, that is some peoples level of success but if you decide to start your own business or do something really stupid like that people are going to question that and people are going to question some of your processes and becoming bold is essentially the ability to say you know what that is okay. I’m not going to listen to them. I’m going to be a contrarian and there are going to be risks when you do try and redefine your success or when you do try and become bold but the risks are completely different than the perceived risks of what’s going to happen to what people think about you or what your self image is going to be like among other people because they’re saying you don’t have the white picket fence yet that clearly you’re not successful and to become bold you need to say that’s not what I’m looking for right now.

Nick: I think you hit the nail dead on the head more and more. I think there’s going to be a huge shift in our generation and were seeing it the one, two percent are going off and defining their own, living on their own terms and that’s part of the journey that I found during becoming bold. I totally agree. So you said you’re doing option which is like one of the main resources or what not that you’re going to be building. What did you get started with? I know you said that Bloomberg was a huge impact on you. At least you were listening to it while you were at the defence contractor.

Steven: Resources for getting started and anything like that?

Nick: Yes.

Steven: Specifically when it comes to trading options and stock options it can be confusing with respect to option pricing and you can get really in depth with statistics and stacastics and all of these sort of mass voodoo and a lot of books while they don’t go into that they seem to be on the same template. they just give you the same cookie cutter definitions and so especially in trading in general it can be more of a trial by fire sort of thing. It’s not really and this is the problem with a lot of books and a lot of resources out there for trading. We could extend this to business in general. Ideas are garbage essentially. It’s not the idea that counts it’s the execution. Tony Hsieh from zappos, he sold shoes online. diapers.com, they sold diapers online. These are not original ideas. It was the execution that made them great and it’s the same thing with trading in general. You can talk about breakouts and the IBD 100 and all sorts of technical and fundamental systems but if you don’t have things right in your head and a trader’s psychology then you can’t execute properly, those ideas mean very little. So it’s not just about books and videos. It’s more about experience than anything especially in this industry.

Nick: Very cool. So in closing I always ask this one last question. What is the one question I should have asked you that I didn’t?

Steven: Well you had one more on this list. How does someone stand out in your industry?

Nick: Oh I guess I skipped that one. So let’s go to that one.

Steven: We’ll go to a different question that you should have asked in a second. Things are changing in the financial world right now. a lot of people they see wall street 2, they see Goldman Sachs and they see hedge funds and the concept of hedge funds is most likely going to go away because the lack of transparency. Hedge funds will often lock up your money. They’re not available to non accredited investors. You have to be a high net worth individual and so there are things coming along. The ability to stand out. You can become a registered investment advisor. There are things like profitly and some other ways for individuals that didn’t go to Harvard to get their MBA and worked at Goldman Sachs. They’re instead showing the results through trading and there is much more essentially what’s happening right now is more transparency and it’s becoming a lot more social and what I’m doing right now is I’m essentially hacking the career path. Most likely people will go get a major in finance. They go work sales at a brokerage firm and then from there maybe they’ll start managing money and I’m essentially not working for any of them. Going full social, I’m building my own brand, leveraging someone else’s brand and that is something that is really, there’s going to be a big fundamental shift here probably in the next five years with respect to that.

Nick: That’s awesome and so since I missed that one well go back to another one. You said you had another question I should have asked you.

Steven: Yeah I forgot it. That’s pretty much it.

Nick: So what was it for twitter for you because there’s a lot of social media people that are going to be watching this. How did you get turned on to twitter so early?

Steven: Now a lot of people, there’s some sort of ire towards twitter sometimes. It’s one of those things where I like to, if you go on like hacker news, they’re always going to be hating on twitter. Groupon, zinga, facebook and those are like the most successful over the past five years. What turned me on to twitter is essentially twitter in another self doing straight up social media is very, very difficult to do. It’s very difficult to leverage. What stocktwits was able to do is essentially filter out stock takers. So if you want to talk about apple or Google individually. it became a way to generate followers much more quickly compared to doing something else because if someone is interested in the price movement of Google or apple they’re going to do a search for that and then they can follow people who have like minded investment and trading style. So for that to carry over to other areas just business and social media. I don’t really know how, we talk about hashtags sometimes and those are a little bit overdone and I feel that sometimes twitter in and of itself is not going to be a good tool. You’re going to have to leverage it with some pre-existing brand or something else in combination will make it much more powerful than to just get a twitter account and trying to connect with a whole lot of people.

Nick: The wild, Wild West is still there is some spots. It’s not as broad as it used to be in 2007, 2008, 2009 timeframe. So where can people find you? I know you’re on investingwithoptions. You’re on twitter and you have this other two brands.

Steven: Option is not developed yet. It’s going to be released in January. Essentially if you’re looking to trade options for the very first time that’s where you’re going to want to go. A lot of my stuff is advanced in the first place. Earnings trades is good if you have experience trading options. That’s about a six hour video and then my blog, investingwithoptions.com. One word and it’s not really investing with options. It’s more like trading everything we could get our hands on. If you check on there my twitter handle is stevenplace, not stevesplace. He’s my evil twin and he’s based out of dc. Steven with an n.

Nick: Okay got you. Well and you’re on stocktwits as well?

Steven: Yes. Stocktwits.

Nick: I’m not really sure how that system works. I’m kind of naive in that aspect.

Steven: They change URLs but essentially if you use for Steven place on stocktwits you can find me.

Nick: Rocking. Alright man. Well thanks for sitting down. Ill include links to all your stuff in the post so people can find you. So thanks for all your insight.

Steven: My pleasure.