In April 1987, inspired by the way Eddie Murphy and Dan Aykroyd managed to turn the tables on the Duke brothers in the comedy Trading Places, John Henkel moved from Arizona to Chicago with $30,000 to begin his career in trading options.

Within six months, the market had crashed and John's stake was all but wiped out. But he persevered, stuck to his system, and was able to retire just 15 years later. He now spends most of his time taking very good care of my sister and my nieces and nephew.

The moral of this story could be "Win big like John," but it's not. To be clear, there is much about John worth emulating -- just not the options-investing strategy that made him wealthy.

Starting out
Beginning an options-trading career right before the crash of October 1987 was less than fortunate. John was onto something called "neutral spreading"; the particular technique he used involved buying or selling options to take advantage of situations in which the market misinterpreted the volatility associated with a stock.

The Black Monday crash took a tremendous toll. Many people forget (or are not old enough to remember) that the markets seized up then in an even more dysfunctional way than we've seen over the past year. On Oct. 19, 1987, the Dow lost 22.6%, more than any other day in its history and far more than the 7.9% drop we saw in October 2008.

While a few stocks like Walgreen (NYSE:WAG), Abbott Labs (NYSE:ABT), and Johnson Controls (NYSE:JCI) remained relatively unscathed -- down only some 10% or so -- heavily owned blue chips McDonald’s, Deere (NYSE:DE), and FedEx (NYSE:FDX) lost more than 15% on that single day. Caterpillar (NYSE:CAT) and Southwest Airlines (NYSE:LUV) fell by as much as 22%!

Over his first two years, John burned through his $30,000. Today he refers to the initial stake as "tuition." He persisted. He found inspiration through the influence of some very successful experienced traders, who gave him confidence about his strategies. Crucially, he also found a backer to replenish his account.

Building wealth
Over the next 13 years, John profited tremendously by trading on volatility using neutral spreading. He made aggressive bets -- with no fear, because he had true belief in what he was doing.

It was hard work, to be sure. He describes feeling like he was in a six-hour football game keeping up with all of the information he needed to digest on the trading floor. He now also confesses to a momentary lapse wherein he was "paralyzed with fear" as he lost $750,000 on a position ... yet somehow he still made money that week.

He'd found his own very legal advantage (unlike the Dukes in Trading Places, who used inside information) in identifying mispriced volatility premiums on the Chicago Board Options Exchange trading floor -- and he was consistently winning.

The writing on the wall
In 2002, John cashed in his chips and went home. Was he just tired? No way -- he loved what he was doing. But he saw the beginning of the end. His trading-floor advantage was about to disappear. He correctly figured that the combination of increasing computing horsepower and volumes of information immediately available through the Internet would increase option-trading liquidity and rationalize most of the irrationalities he was finding.

He understood that the advantage that had depended on illiquidity and the information only available on the floor of the CBOE was disappearing, and he got out. Today, anyone with Internet access can make low-cost options trades with any of the discount brokerages, including optionsXpress Holdings, TD AMERITRADE, Schwab, Scottrade, E*Trade, and ShareBuilder.

John still trades at home from time to time, but nowhere nearly as aggressively.

I feel bad that my brother-in-law is spending more of his time in carpools these days, but at least he has his wine collection. (OK, I'm over it. Really.)

The lesson
The moral of the story is something John said to me: "There was no longer an advantage to be on the CBOE floor versus your computer at home." As a professional without a "floor-trader advantage," he decided to get out of the game.

This is great news for individual investors! Whereas professionals like John used to have access to superior information and faster, less-costly trading, we now have those very same tools. In other words: The playing field has leveled.

But just because the playing field has leveled, that doesn't mean there isn't still money to be made -- if you're employing the right options strategy. And that's why you should check out our Motley Fool Pro service, led by Jeff Fischer. Jeff's a smart, long-term investor who believes that options can help most any investor earn better returns. To learn more, just put your email address in the box below for immediate access.

And thanks, John, for your inspiration. I hope many Fools get to trade places with you.

This article was originally published on August 14, 2009. It has been updated.

Motley Fool President Scott Schedler owns no shares of any company mentioned in this article. FedEx, optionsXpress, and Schwab are Motley Fool Stock Advisor recommendations. The Fool has a disclosure policy.