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Options trading isn’t something we come across on a daily basis. Today’s guest is John Richardson. He explains how options trading can be a great way to enhance your portfolio and can be less risky than buying individual stocks. As he puts it, options trading can be a great hedge strategy for income by diminishing risk.
Watch a free training video John has made available for Money Tree Investing podcast listeners: ConsistentOptionsIncome.com/MoneyTreeInvesting
Our panelists tackle these questions:
- Can an options strategy can enhance your portfolio. If so, how?
- Why do you think investors in general usually lose money?
- Has the investment industrial complex failed the average investor?
Some of our thoughts
Joe loves the insurance analogy used by John Richardson: You can use it to bat or use it like insurance. You can either sink a bunch of money into investments or buy an insurance policy (option) for a lot less to buy a bigger piece of the pie. He likes it for people with large portfolios who want to bring in a consistent income.
Miranda agrees with Joe’s position. She doesn’t personally use options but has written about them in the past. She raises a yellow flag to caution us that binary options moves more into the area of betting than hedging but can be good for someone with extra cash or a large portfolio.
Doug says you need to be active if involved in options trading. When he was a rookie on Wall Street, he dipped his toe into options trading. In the first week he made a couple thousand dollars. Woohoo! The next week he gave it all back – and thousands of dollars more. He has not met people who have consistently done well with puts and calls as long-term strategies.
- Miranda Marquit | Planting Money Seeds
- Joe Saul-Sehy | Stacking Benjamins
- Linda P. Jones | Be Wealthy and Smart
- Doug Goldstein | Rich as a King
For a quick bio of each of our show participants, head on over to our panelists page.