Secret 33THE STOCK ADVANTAGE

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As you search for the best options to buy, you have a choice

of stocks, indexes or futures, both financial and commodities.

Which one has the greatest potential for surprise volatility? The

winner is stocks!

Stocks by far have the potential for surprise price action. If

you review and compare the historical volatility of stocks, indexes

and futures, you will see the difference. In fact, some stocks have

natural volatility of over 100%. Never will you see that with other

instruments. Stocks are much more prone to explosive gains and

losses.

Therefore, there is a big advantage to buying options on

stocks rather than other instruments, such as futures. Also, again

remember, when you buy options, you are betting on volatility, so

buy options on those instruments that have the greatest potential

for surprise movements.

 

As you search for the best options to buy, you have a choice

of stocks, indexes or futures, both financial and commodities.

Which one has the greatest potential for surprise volatility? The

winner is stocks!

Stocks by far have the potential for surprise price action. If

you review and compare the historical volatility of stocks, indexes

and futures, you will see the difference. In fact, some stocks have

natural volatility of over 100%. Never will you see that with other

instruments. Stocks are much more prone to explosive gains and

losses.

Therefore, there is a big advantage to buying options on

stocks rather than other instruments, such as futures. Also, again

remember, when you buy options, you are betting on volatility, so

buy options on those instruments that have the greatest potential

for surprise movements.