The following is an excerpt from the eBook, Options Trading 101, authored by MarketClub Options lead trainer, Trader Travis. Learn more about MarketClub Options and how to obtain this entire eBook. You can also see Trader Travis' 10 Minute Options Trading Strategy where he shows you how to find, execute and manage profitable options trades within minutes.
So what are puts and calls?
Generally speaking, put options are used to both protect the value of your assets as well as make money when stocks fall in price. And, generally speaking, call options are how investors make ten times more money when stocks go up in price.
As an options buyer, it's not uncommon to earn (and lose) upwards of 40 - 50% return on your money.
But one of the inherent problems with options trading is that for new traders these returns just seem too good to be true.
Where else are you going to hear that you can make $1,000 in three days, or a 40 - 50% return on your money in a matter of days?
It's not like they teach you this stuff in school.
And with any other form of stock market investing, you don't have these returns and in such a short period of time.
So it's natural if you are a little skeptical, that's okay... so was I.
The problem is that these kinds of returns are normal. They can happen on a consistent basis if you develop the skills.
So what people do is choose to allow their skepticism to rule and they keep this kind of information out of their life when it can actually help them.
I do hope the example in the previous chapter was enough to at least get you to see how leverage can help you earn supercharged investment returns.
And yes, there is risk with trading options and you won't always make money, but the rewards are well worth the risk (at least in my opinion).
Stock options are precisely what the ultra-rich use for accelerated wealth creation! But what about the common man? What about the person barely scraping by and all they have is the dream of becoming wealthy? Continue reading "How To Build Wealth And Protect Your Assets At The Same Time"