If you learn to use options you can leverage your investments. If you bought the WMT Dec 24, 60 Calls this week, you paid .42 cents per share. A $42.00 investment is now worth $168+ as of this morning. The expiration is tomorrow. Now you have all of your money at risk when you BUY a call. However this one would have been a winner if you chose to close today.
The buying of calls is about seeing opportunity. The market does not go down everyday, nor does it go up everyday, however we look for days when the market may be oversold. We then buy short term calls very close or in the money and expect to turn them quickly. If we don’t see the turn we sell out, keeping some of our investment.
Watch for opportunities from the Sensei.
Options are NOT suitable for all investors, people can and do lose money. Seek advice from your advisor before investing of any kind.