Making Money In Art

What's in a picture? Where some may find distaste others may find divine inspiration. There are no bounds when it comes to themes of art and states of consciousness in the realms of artistic creativity.

There is money to be made in art. In my first experience with art I bought some watercolor paintings for $2 a piece at a garage sale in Dallas, Texas (and that's the wonderful thing about garage sales because you never know what you can pick up!) I then placed the pieces in a cheap framework for $25 a piece and then sold them on Ebay for $50 a piece!

Lady Altamont c.1788. George Romney. Tate Gallery

People like modern art and people like old historical art. Famous pieces are very popularly sold as prints and it is a massive global and thriving business opportunity.

Still Life with Yellow Straw Hat 1881. Vincent van Gogh, Rijksmuseum 

An important event occurred in India this week which is likely to occur in Western countries at some point. India has decided to withdraw its cash from its system and encourage an Internet based economy. The implications are immense and the opportunities to do business with India now becomes even greater. There is nothing to stop you from buying and selling products in India and trade them all over the world. The world is increasingly becoming digital day by day.

Contemporary artist Julian Days

To make money in art there's two important ingredients you need as a formula for your business model. Given that you already have a global market out there of customers willing to pay for your art then all the rest can easily fall into place if you work out a success formula.

Firstly, you need a cheap source of material.

Secondly, you need an online digital library.

In the first point you can outsource your paintings from China and India and other Asian and African countries for as little as $5 Or in the West there are thousands of budding student artists that would gladly sell you a painting for $5 knowing that they may become successful in the future through he publicity that may ensue with customer awareness.

You can repackage the originals and resell as I did; or you can make hundreds of prints and sell online.

In a digital world there is no need to spend money on lavish galleries or studios to draw customers to buy your art. make a digital website so that people from anywhere can see your library collection.

Lascaux Paleolithic cave paintings

People are always going to buy art people are always going to want to find a private moment and a private space to sit and think and feel the need for inspiration. Your market is already built-in. Now all you have to do is work out your costings and you can be in business very fast.

Growing a second income these days is vital. Job security went out of the window long ago. There is nothing to stop you making money from art from the comfort of your own home. it's also great fun and therapeutic for yourself to make money in something you can enjoy!

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Stock Options Trading For Second Income? Forget It

There is a whole bunch of stock options trading advertisements spreading all over the Internet but how accurate are the claims and how large is the hype when you begin to seperate the shaft from the grain?

The usual claim is 300% return here and 100% return there; or the like on stock options trading. Being a seasoned currency trader i decided to take a look and after 6 months of stock options trading I was not impressed with the results.

There are several problems with stock options trading.

Firstly, the only people who really make money are the 'option writers.' But there is a good reason why stock trading platforms try to discourage you by asking high amounts of cash deposit. it is because the industry profits tend to be kept as institutional. Writers receive option writing premium and on a 90% degree probability they will see the options expire worthless and pocket the premium because of the equation ot Time-Decay. So, knowing that a stock option rapidly runs out of value why on earth would you purchase an option in the first place to trade and hope that it will increase in value?

Secondly, people who buy options in large amount actually use them for the purposes for which they were originally intended. That is they buy them with the intention not to trade them but to hedge a portfolio of stocks. The time decay rapidly builds up and the options can be renewed. Options are in all essence a means to hedge and not a means to find an incremental value and bet your whole house on it!

Thirdly, entry and exit fees to buy an option and close often work against the trader. To make money the options price has to change greater than $30 in 1 week on an option with 90 days left to expiry. Stocks trading at $30 range are usually reflecting options prices in the $300 range not including entry fee. Go look at the NYSE or Nasdaq and you can pull down countless big companies whose stock prices are trading in the $30 range. So if you need the option to increase in value > $330 for the option price, then we are talking about a movement of 10% just to break even on the trade. You will need about $15 to enter the trade and then another $15 to close out the trade. At least 90% of the time the options price has not moved a tick in a week and youre left holding the hot potato with a rapidly eroding value trade.

Fourthly, the VIX, or volatility index which underlies the rate of change in stock prices, and options prices, rarely moves in the long run to add volatility to change the stock option prices. For your typical $300 entry position to > $330 we would need a spike in the VIx in a week of more than 3.00. Apart from the recent election panic that his US stock markets doesn't really happen often.

So in conclusion; subscribing to newsletters that punt a tip to buy a call or put option on a stock can be a very dangerous game since 90% of the time the options work against you as a trader.

In the futures markets options can work for you as the volatility can be greater than in the stock markets. I have bought options to hedge my currency futures effectively and closed out the option with good timing. The same can be said with the commodities markets. But the only problem is the costs involved. Locking into a currency future could set you back a good $3000  with another $3000 on a hedge. So the costs of options trading in the futures markets are cost prohibitive considering you do not want to expose more than 5% the value of your portfolio to a single trade.

I have traded forex and futures options successfully but can fairly say that after 6 month of evaluating stock options - I would give it a miss as the entire premise of making money is structurally unsound.

So in conclusion; if you want to look for a second income to help grow your savings, speaking from my own trading wisdom, I personally do not think that stock options trading per se is a very good idea at all Forex trading can yield better long term results.

Disclaimer - All trading can be dangerous and result in a loss of capital.

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B. Bernard.