Secret 1THE SECRET ADVANTAGES OF OPTION TRADING

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Option trading has been considered by many to be speculative

and dangerous, and the buying of stock, in comparison, to be

conservative and safe. Despite these views, the bear market of

2000–2002 saw the Nasdaq dive in value, with many high flying

stocks dropping 90% in value.

Truly, buying stocks in the 90’s bull market was like walking

through a minefield blindfolded. If you owned the wrong stocks

and you were caught in the bear market downdraft, your portfolio

would have been in devastating danger.

Here lies the secret advantage of trading options. If you

would have owned options instead, you could have greatly limited

your losses. The big advantage of options is that you have

outstanding leverage, but (and here is the key) with limited

risk.You can only lose what you pay for the options, and that can

be a small amount.

Therefore, instead of owning high flying tech internet stocks

that have a dramatic amount of downside risk, you could receive

the same kind of leverage by buying options and utilizing option

strategies yet only risking 10% of your portfolio.

The advantage of option trading does not stop there. Options

provide a way to buy stocks at lower prices and, while you’re

waiting for the stocks to drop to lower prices, make money. Options

provide a way to earn additional income from your portfolio,

and options enable you to buy an insurance policy on your

stock portfolio that is not available from any insurance company.

With options you can design investment strategies that will

profit regardless of what the market does. Besides, you can design

these strategies with extremely attractive risk-reward pictures,

much better than any other investments. Furthermore,

options enable you to design strategies that will win over 90% of

the time.

For speculators, options provide the opportunity for spectacular

gains. Gains of 1000% are not that difficult to attain. Over

the years from 1982 to 1999 that I wrote the option advisory letter,

The Trester Complete Option Report, the overall theoretical

performance of our option buying recommendations showed

over 1500% return in two of the seventeen years.

One of our recommendations showed a 10,000% gain. Even during the bear market of 2000–2002, there was an opportunity

for great success. For example, I bought call options on Philip

Morris (MO) at 2.5 ($250), one of my few option purchases for

the year 2000, that rose to 27 ($2700). This was almost a 1000%

return.

Moreover, options enable the speculator to become a casino,

where you take the bets instead of make the bets. Here you can

truly make a living as an option trader.

Options are an extremely valuable risk-reduction, profitmaximizer

tool. In fact, for all investors, options are an extremely

valuable tool and can be used with all of your investment

activities.

But, like all miracle drugs, options must be used with prudence

and proper care, for if you overdose, options can be dangerous

to your financial health.

Option trading has been considered by many to be speculative

and dangerous, and the buying of stock, in comparison, to be

conservative and safe. Despite these views, the bear market of

2000–2002 saw the Nasdaq dive in value, with many high flying

stocks dropping 90% in value.

Truly, buying stocks in the 90’s bull market was like walking

through a minefield blindfolded. If you owned the wrong stocks

and you were caught in the bear market downdraft, your portfolio

would have been in devastating danger.

Here lies the secret advantage of trading options. If you

would have owned options instead, you could have greatly limited

your losses. The big advantage of options is that you have

outstanding leverage, but (and here is the key) with limited

risk.You can only lose what you pay for the options, and that can

be a small amount.

Therefore, instead of owning high flying tech internet stocks

that have a dramatic amount of downside risk, you could receive

the same kind of leverage by buying options and utilizing option

strategies yet only risking 10% of your portfolio.

The advantage of option trading does not stop there. Options

provide a way to buy stocks at lower prices and, while you’re

waiting for the stocks to drop to lower prices, make money. Options

provide a way to earn additional income from your portfolio,

and options enable you to buy an insurance policy on your

stock portfolio that is not available from any insurance company.

With options you can design investment strategies that will

profit regardless of what the market does. Besides, you can design

these strategies with extremely attractive risk-reward pictures,

much better than any other investments. Furthermore,

options enable you to design strategies that will win over 90% of

the time.

For speculators, options provide the opportunity for spectacular

gains. Gains of 1000% are not that difficult to attain. Over

the years from 1982 to 1999 that I wrote the option advisory letter,

The Trester Complete Option Report, the overall theoretical

performance of our option buying recommendations showed

over 1500% return in two of the seventeen years.

One of our recommendations showed a 10,000% gain. Even during the bear market of 2000–2002, there was an opportunity

for great success. For example, I bought call options on Philip

Morris (MO) at 2.5 ($250), one of my few option purchases for

the year 2000, that rose to 27 ($2700). This was almost a 1000%

return.

Moreover, options enable the speculator to become a casino,

where you take the bets instead of make the bets. Here you can

truly make a living as an option trader.

Options are an extremely valuable risk-reduction, profitmaximizer

tool. In fact, for all investors, options are an extremely

valuable tool and can be used with all of your investment

activities.

But, like all miracle drugs, options must be used with prudence

and proper care, for if you overdose, options can be dangerous

to your financial health.