So you’re tired of making 10 or 15% by investing in plain stocks, you want to leverage up and start to make some real money fast… Well there are other options for you to invest in. Stock options to be exact. While many confuse regular stocks and stock options as they same thing, they are actually different.
According to Investopedia stock options are: “An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date. An option, just like a stock or bond, is a security. It is also a binding contract with strictly defined terms and properties.” So essentially you have the option to purchase something at a certain price for a certain time, as long as you pay for that option. You are not required to purchase the underlying stock in the end, but you also won’t get the money back that you paid for the option.
The big advantage for investing in stock options is that if the value of the stock you bought an option in suddenly jumps, you get a nice return, without having to pay the regular stock price that everyone else is paying.
The underlying stock could move up 10% but the call option could move up 100% over the same time.
Don’t get me wrong, it can be risky to invest in options, because you have to know the market enough to know when the stock will go up and down, and what a good price is to buy or not buy into your option.
Having diversity in the investments you make is always a good choice. But unfortunately, it’s easy to get mired in the choices without know the good and bad for each one. Well, that’s why we’re here.
Options are a great way to leverage the speculative part of your portfolio.. We’ve seen a big interest in gold right now. With a weaker U.S. dollar, the values of precious metals always shoot up, and now is no exception. An ounce of gold is nearing $1,300. Buying options in gold mining stocks means that you can get in the gains they rise anymore We recommend seriously looking into the hot gold options on Options Trading Pit.
Christian DeHaemer
Check us out on YouTube!Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
