Peter Reznicek is the founder and head trader of both RBC Asset Management, a Philadelphia-based asset management firm, and ShadowTrader.net, an advisory firm, launched in 2005 that provides daily recommendations and analysis of equities and foreign exchange pairs.

Mr. Reznicek also educates more than 15,000 ShadowTrader.net subscribers each weekend through his free Sunday presentation, the ShadowTrader Video Weekly, and also as editor of their flagship publication, the ShadowTraderPro Focus Report. He has also hosted a popular call-in show on Philadelphia radio, and has had his commentary published on several popular financial websites.

It was a real delight to get to talk with a veteran trader like Peter Reznicek. This is the first part of that conversation.

Optionetics: How did you first become interested in trading the markets?

Peter: I've had some interest in stocks from as long as I can remember. My first trades were actually when I was about 15 years old, buying and selling some stocks in a custodial account that my father had helped me to open. I started to take it seriously sometime around the spring of 2000 just after the bubble burst and the Nasdaq was at its all time peak.

Optionetics: Do you ever use options and if so what are your favorite strategies?

Peter: I do use options, quite often actually. I like collars, verticals and generally selling premium around positions that I am long or short of.

Optionetics: What are the things you like best about the trading business?

Peter: The fact that it can be done from anywhere with a decent internet connection.

In 2008, I worked in six different countries.

Optionetics: How do you treat losses and how to go about establishing their risk tolerance before the trade is entered?

Peter: Establishing your risk tolerance before the trade is entered. I have a set amount of total portfolio value that I want to risk. Then I size the trade accordingly in such a way that if everything goes wrong and I get stopped out, my maximum loss is capped at a very specific number which is that set percentage of portfolio value. As I am pretty conservative, this number is usually a half to one percent of portfolio value.

Optionetics: Thanks, Peter, for sharing your trading approach with our Optionetics reading audience.

Jeff Neal
Senior Writer, Options Strategist
Optionetics.com ~ Your Options Education Site