All investments come with risk and trading options is usually classified by the SEC as a risky investment but what if we told you the way trade options is even safer than traditional market investments?
Trading an option is trading a purchase contract (also called an option) to buy or sell a stock at a certain price on a specific date for a period of time. So if you think Tesla stock TSLA is going to go down and then back up you would want to buy the stock when it has a lower value and sell it when it has a higher value.
The amount of earnings you can realize from trading options can be significantly greater than trading one share alone. Take the stock Walmart WMT for example, over the last eleven months the stock is up 8.69% at the time of writing this article. Now, this return is respectable over the year, yet our program recommended an options trade of Walmart stock that returned 25.45% in just two days.
Now another comparison of this would be an “average investor” or someone owning stocks that represent the average of the market as a whole would have seen a return of -18.10% in 2022 and +19.00% in 2023 (S&P 500) while someone trading options could have returned +84.14% in 2022 and +108.91 in 2023 respectively. In this scenario, the two example investment models are represented on the chart below.
The key to decreasing risk in any investment is to increase the diversification of the investment. Think of playing Monopoly, when you get more money it is smartest to buy more properties rather than only buying more houses for the property you already have. This way when players move around the gameboard you have a higher chance of them landing on your property. The more properties you have, the greater the chance a player will land on it and pay you.
Think of owning an Airbnb property, the goal is to have the most money at the end of the year. One investor may have a single very expensive property that can return a nice amount, and you have five small properties that combined, can return the same amount as the investor.
Now, which would you choose? It can be hard to decide, but let’s think of what could happen in the Airbnb rental climate. The investor’s one property is at the Palisades Tahoe Ski area, but just like in 2022 the area gets too much snow causing the resort to close and rental traffic to drop to zero. Now if you own five properties and if you are unable to get rental traffic to one property you will be better off than losing all your traffic. In this case the investor with multiple lower-earning properties beats out the investor with all his eggs in one basket, a traffic-less basket. Your one single rental property could be in Maui and be devastated by forest fires. You get it, diversity is key to succeed when investing.
So now here is the question:
The same principle applies here, if you make one trade during the year, or even only 10 then you may have some losers greater than the winners and come out behind. Trading a variety of industries and companies helps increase diversity as do the kinds of trades you make. With an option you have the advantage to prepare to make a trade to bring you profit if the stock goes up or down. Sounds nice right? But all things that sound too good to be true often are, so what is the caveat here?
Options trading is risky – for those who do not know what they are doing. But if you can have someone coach you through the process you will greatly increase your odds of success.
Now let’s return to our example at the beginning of this article. The “market average investor” represented by buying and holding only the S&P 500 would see -18.10% in 2022 and +19.00% in 2023 (S&P 500) while someone trading options could have returned +84.14% in 2022 and +108.91 in 2023 respectively.
The person trading options in this case was in fact a person following the trades that our options trading program Safe Option Strategies recommended. This program coaches members all over the world in how they can safely profit through trading a portfolio of diverse options. With over 20 years of experience profiting in the market, we provide the expert edge that is critical to consistently see returns like the above example.
The Safe Option Strategies program is broken into three categories 1. Education, 2. Execution, and 3. Community. While this may sound like steps that can take a long time, you can learn enough to make your first trade in just one week, depending on what knowledge and comfort level you start at. We have been thrilled to teach members from all backgrounds and have developed a program easy to move through for any skill level.
Program members are learning everything about the stock market from basics to advanced concepts. This makes the program perfectly suited for first time investors and investment fund managers. In fact, nearly 15% of Safe Option Strategies program members are investment fund managers themselves. Program members learn from recorded online courses allowing you to learn at your own pace.
Here is where the magic happens, and the magic is called The Signal Newsletter. In its 15th year, The Signal Newsletter provides weekly recommendations of upcoming trades, and the real kicker is the as-needed trade adjustment recommendations in accompanying emails. So your company just tells us what trades we can make? Yes. And all I have to do to achieve the same results you show are to make the trades you send? Yes, and we even send details with each trade of how to make it so nearly anyone can follow along. What makes our program different is we provide w world-class education that prepares you to choose your own trades but we also help you start out by following along with the exact trades we are making.
You will start having fun once you begin the course and we will be excited to welcome you into our community of program members who are just as excited as you. Listen to daily market updates from the founder of Safe Option Strategies: Jeffry Dunyon, chat with other members on our chat-server service, and schedule private one-on-one coaching sessions with registered investment advisors and even Jeffry Dunyon.
Now, the question at the beginning of this article was “Is Trading Options Risky and How Can You Safely Trade Options?” So the short answer is yes, there is risk, but there is significantly less if you trade the right way. And how can you do it safely? It’s in our name: Safe Option Strategies.
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