One of the very cool things about investing and wealth building is that there are so many ways to do it. There are thousands of simple low risk ways to make massive amounts of income. One of the most popular investment vehicles is the stock market. Within the stock market is a very beautiful thing called the stock option. I'm going to give you some reasons why you need to be trading stock options right now
Reason #1 - Trading Options gives you Leverage
Leverage leverage and more leverage! For a fraction of the cost of buying an actual stock you can buy an option and make a lot of money if the stock price moves even a little bit.
With an option trade a $1 move in a $20 stock price could mean a 200% profit for you, maybe more!
Reason #2 - Selling Options can provide An additional income stream on stocks you already own
If you own stocks that are pretty flat, you can sell call options against those stocks and get a monthly income while you own the stock.
Not only will you be getting a monthly income, you will also be lowering your cost basis for the stock every month.
Let's say you bought the stock at $20 and you sold a call option against that stock for $1. By selling that call option, your cost basis for the stock is now $19 ($20 - $1). Keep doing this and you could make you money back on a stock in no time, even if that stock has been flat!
Reason #3 - Options can be like Insurance on your stocks
If you own some stocks and the stocks have had a nice rise in price, you can buy some put options to protect you from drops in the price and losing out on your profit.
Buying put options are a great way to protect your brokerage account from unexpected drops in a stock price. Put options allow you to sell a stock at a specific price no matter what happens with the stock itself.
Reason #4 - Options are a way to ge t paid to buy stocks
If you don't own any stock and you see a stock you like, you can get paid to buy that stock at a price you choose. Let's say you like abc stock and it is currently selling at $35. You think it is an excellent buy at $33. Instead of waiting for abc to hit $33 you can sell some put options at the $33 strike price and if the stock does do to $33, you keep the money you got by selling the put option, you get the stock at $33 AND your cost basis is lower by whatever you received for the put option.
