Use Options
I believe options are the right tool for retail traders. If you don't already know something about options, I'll help you learn. Use them for their mathematical advantages and never trade stock shares outright again. Options are the best way for traders to create higher probability trades with leverage to produce greater returns.
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Markets are not "BAD" or "GOOD" but trend either Up, Down or Sideways. The power of options is that strategies exist to profit from any and all market conditions. This flexibility is a major advantage that combined with leverage and better risk control change your invest opportunities.
Keep it Simple Whenever Possible
Long calls and long puts have unlimited upside while completely limiting downside risk to the cost paid for the option. For directional plays the lower investment than buying the shares increases returns. The purchase of an option has absolute risk of that premium nothing more if it expires worthless at expiration.
In The Money options have a smaller percentage move required to reach the expiration break even threshold. The long call or put takes advantage of the leverage of options combined with the unlimited upside potential to improve overall portfolio performance.
Using a call or put as a substitute for buying or selling shares has many mathematical advantages with the proper balance of time until expiry and option strike price. There is no need to make things complicated with fancy strategy, buy a call if bullish and buy a put if bearish and expecting a significant price move.
Alan In The News
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Alan Talks on CNBC Alan talks earnings, Alcoa, and weekly vs. daily volatility. Read more |
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Alan on Canada's Business News Network Alan talks about whether commodities have finally hit a bottom. Read more |
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Alan on Bloomberg Watch Alan talk on Bloomberg about the impact of weather on coffee Read more |

