One of the things I’d like to do more of in 2016 is offer up more examples of ways to use options to trade. It is my opinion that there is a whole world of opportunity out there that most traders and investors never explore.
To wit, via the use of options you can trade:
*Stocks
*Indexes
*ETFs
*Gold and Silver
*Crude Oil and Natural Gas
*Interest rate products
*Volatility
*Currencies
*And so on
Likewise, you can trade the bearish side of the above as easily as you might trade the bullish side, all while limiting your dollar risk.
The Catch
The problem I have in writing about options is that in order to actually illustrate what’s involved I need to write about specific trades. When I do this I always point out that it does not amount to a “recommendation”. Still there are always two concerns:
1) Someone will assume that it is a recommendation anyway and end up risking money on an “example”.
2) Even if an example trade is recognized as an example trade, the fact remains that if it all goes horribly wrong I run the risk of looking like an idiot because I wrote about being “bullish this” or “bearish that” at the wrong time.
The Answer
There are two avenues I may go moving forward, when it comes to offering up option trading examples:
1) I will simply ignore concerns 1 and 2 above and just emphasize each time that I am offering “examples” and not “recommendations”.
2) I may use examples from a previous date. The upside to this is that no one will be tempted to act on the example. The downside is that it sort of smacks of “cherry picking”, i.e., I can always show winning trades if I feel like it.
Anyway, there you have it. Now click here for the first EXAMPLE(!!)
Jay Kaeppel
I don’t mind the cherry picking, and showing losing trades, because many times the learning comes from knowing when to cut your losses more than knowing when to take a profit….. Keith