Shortly after I graduated, I reconnected at a Chicago restaurant options about 10 of my former college friends. We were all catching up and talking about what we were now doing for a living. When it came to my turn, I told the group that I was a trader on the floor of the Chicago Board of Options Exchange, which was met with blank stares and silence. Their clear lack of understanding of what that meant was surprising to me because all these friends had just graduated with business degrees. Way too many investors think of options trading as gambling, or an exotic derivative that only Harvard and M. That could not be farther from the truth. Some of the savviest, most seasoned investors are still clueless when it comes to options trading. Others know the basics of options, but are skeptical trading the perceived risks that accompany it. Sadly, that skepticism is rooted in a fundamental misunderstanding of how options work. That misunderstanding precipitates bad information, and that bad information has been repeated so often among options detractors that at a certain point it became myth. But with a little education on the subject, options trading can be as safe as you want it to be. When done right, the whole point of options is to REDUCE risk. Options are all about probabilities, which enable you to choose your level of risk in a given trade. So really, the notion that options trading is risky is only part myth. Options trading can be risky … but only for the uninitiated. Which brings me to myth No. Options comes with its own vernacular—covered calls, selling puts, the strike price, iron condors, etc. Once learned, the options-trading process will quickly become second nature. There are plenty of self-directed investors who picked it up and now trade options regularly. And why is this? Because the most powerful factor of options is the leverage you get when buying calls and puts. By not risking too much on any one trade, and with trading awesome potential of the leverage options allows, you should theoretically get more mileage—and hopefully more profits—out of your options money than you would if you invested that money in 10 stocks. Through the magic of puts, you can still myths even when the market begins to fall. However, puts allow options traders to gain bearish exposure at a fraction of the cost. A put purchase is used when a decline in the price of the underlying stock or ETF is expected. For example, if you expect stock XYZ is going to fall you could buy a put at a specific strike price with unlimited potential for profits. The maximum loss on this trade is the amount of premium paid. By purchasing puts, you can take advantage of a down market with low-risk, high-reward trades. An option is a contract that conveys to its holder the right, but not the obligation, to buy in the case of a call or sell in the case of a put shares of the underlying security at a specified price the strike price on or before a given date expiration day. The advantage of trading options is that, unlike buying stocks, you can define your risk ahead of time. Historically, the stock market rises over time. However, when you buy an individual stock, it has only a chance of success. Options give you the opportunity to rig the odds in your favor. Simultaneously, options are versatile enough to also allow you to be more aggressive. You can take on more risk as a means to potentially earning a bigger return. At Cabot Options TraderI offer a complete options education, and only recommend trades in which the odds are clearly in our favor. When I buy options, I risk pennies to make dollars. When I sell options, I never expose my subscribers to any catastrophic risks. My options trading strategies are varied enough to cater to all investors depending on their investment objectives, risk tolerance and available assets. With a little education, options trading can be simple, low-risk, fun and most importantly, profitable. Jacob Mintz Chief Analyst, Cabot Options Trader and Cabot Options Trader Pro. Find out how in this free report, How Options Work—and How to Hedge Portfolios with Options. You must be logged in to post a comment. We designed Trading Prime for dedicated investors like you—investors who want to own the best stocks, collect the biggest profits, and lock in a rising source of income for life. With Prime membership, you get full access to nine of our top advisories and many members-only benefits, including free admission to our annual Investors Summit. Cabot Prime Pro membership is by invitation only. Please click the button below if you wish to receive an invitation when a space becomes available. Cabot Benjamin Graham Value Investor uses the methods developed by the father of value investing, Benjamin Graham, and popularized by Warren Buffet. A system that works well in all markets, it buys stocks when they're dirt cheap, and sells when they've reached full valuation, a process that takes two years for the average selection. What's important here is buying only when a stock's price is below its Maximum Buy Price, holding through thick and thin, regardless of the news or the action of the stock, and then selling when the stock reaches its Minimum Buy Price. These are great stocks to own if you're a conservative stock investor. Royden Ward explains clearly how to build a portfolio of stocks that meet his strict requirements-plus every issue includes updated rankings on his "Top Value Stocks," so you can check on other stocks you may own. Cabot Dividend Investor focuses on preparing for retirement, recommending a solid range of income-generating stocks, preferred stocks, REITs, MLPs, closed end funds and utilities, with particular emphasis on risk, dividend safety and dividend growth. Cabot Emerging Markets Investor focuses on the emerging markets economies, with special attention paid to the BRIC Brazil, Russia, India and China investment landscape. You'll discover the value of international diversification and the profit potential of investing in countries whose economies are growing far faster than that of the U. All these stocks are traded on U. Under the guidance of Chief Analyst Paul Goodwin, Cabot Emerging Markets Investor was recognized as the top investment newsletter in and by Hulbert Financial Digest, and was rated by Hulbert as one of the top investment newsletters in every five-year period to This flagship investment advisory has been published since and it is recommended trading all investors seeking to grow their wealth. Whenever Jacob determines the time is right, he sends specific option buy and sell alerts myths email and text-message for immediate action. He also sends out a weekly update with his views on the options market, open option positions and his outlook for the coming week. Cabot Small-Cap Confidential is a limited-circulation advisory for investors seeking profit opportunities in high-potential small company stocks. Each month, small-cap expert and Chief Analyst Tyler Laundon features in-depth research options one outstanding small-company stock that is a pioneer in its field and undiscovered by institutional analysts. Updates on all recommended stocks are sent weekly. The circulation of Cabot Small-Cap Confidential is strictly limited because the stocks recommended are often low-priced and thinly traded. Cabot Stock of the Week offers the very best of all Cabot stocks across the investing spectrum. Designed for experienced investors, Cabot Top Ten Trader is your ticket to fast profits in stocks that are under accumulation now. Yes, you can have Growth AND Value! Combining both growth and value in her growth-at-a-reasonable price strategy, Chief Analyst Crista Huff uncovers stocks with strong growth catalysts that are selling at attractive valuations—the stocks that are temporarily overlooked by mainstream analysts and institutions. Crista applies her stringent screens to deliver the best stocks in three portfolios: A subscription includes monthly issues with weekly updates, special bulletins with market and stock alerts and email access to Crista. Editor Nancy Zambell scours more than advisories and research reports to select the top recommendations. Dividend recommendations include high yield, growth and income, REITs, mutual funds, ETFs and more. One top recommendation arrives in your email box each morning, and then gets collected into an easy-to-read digest of 30 to 35 top recommendations each month. Editor Nancy Zambell scours more than advisories and research reports to select the top recommendations by the top analysts. Selections run the full range of opportunities: Thirty-plus recommendations are delivered to you in Daily Alerts directly to your email box, and collected in an easy to read digest each month. Our Emerging Markets Timer remains bullish, but after a few weeks of hesitation, the next handful of days will be critical. At this point, any decisive drop below the day line say, down to 40 or so would probably turn the intermediate-term trend down. Right now, the trend is up, so we remain mostly bullish, while keeping a close eye on our recommendations for any signs of abnormal weakness or resilience. Discover the hottest stocks, investing tips and analysis from Cabot analysts in our free Wall Street's Best Daily newsletter delivered right to your inbox. Network Daily Reports Services Library Events About. Sign In Register Register. May 28, by Jacob Mintz. How to Hedge Portfolios with Options Once considered a niche segment of the investing world, options trading has now gone mainstream. Read Your Free Report Here. Related Posts One Advantage of Options: Less Exposure Is Main Street Catching on to Options? How to Pick Your Options Trades You Have To Treat Options Differently Managing Options Trading Risk. Tags Bull Marketbuy optionsbuying and selling stocksbuying stockscabotcabot options tradercabot options trader proetfhow options workinvestedinvestinginvestmentinvestorinvestorsjacob mintzoptionsoptions educationoptions exchangeoptions on stocksoptions traderoptions optionsoptions tradingoptions trading strategiessell optionssharesshares of stockstockstock marketstock tradingstocksstocks optionsthe stock markettrade optionstradingtrading options. What Can We Help You With? Dividend Stocks Emerging Markets ETFs Growth Stocks How To Invest Income Investing Options Trading Small-Cap Stocks Stock Market Value Investing. Vibrant Market for Growth Stocks Cabot Weekly Review. Where Should I Invest My Money? The Best Small Companies to Invest in Now How to Invest in Stocks: How Stocks Work, How options Calculate Return on Investment and Other Investing Basics What is Income Investing? The Best Retirement Plans, High-Interest Savings Accounts and High-Yielding Investments. Cabot Prime Membership We designed Cabot Prime for dedicated investors like you—investors who want to own the best stocks, collect the biggest profits, and lock in a rising source of income for life. Learn More Buy Now Cabot Prime Pro Membership Cabot Prime Pro membership is by invitation only. Myths More Request Invitation Cabot Benjamin Graham Value Investor Cabot Benjamin Graham Value Investor uses the methods developed by the father of value investing, Benjamin Graham, and popularized by Warren Buffet. Learn More Buy Now Cabot Dividend Investor Cabot Dividend Investor focuses on preparing for retirement, recommending a solid range of income-generating stocks, preferred stocks, REITs, MLPs, closed end funds and utilities, with particular emphasis on risk, dividend safety and dividend growth. Learn More Buy Now Cabot Emerging Markets Investor Cabot Emerging Markets Investor focuses on the emerging markets economies, with special attention paid to the BRIC Brazil, Russia, India and China investment landscape. Learn More Buy Now Cabot Growth Investor This flagship investment advisory has been published since and it is recommended for all investors seeking to grow their wealth. Learn More Buy Now Cabot Small-Cap Confidential Cabot Small-Cap Confidential is a limited-circulation advisory for investors seeking profit opportunities in high-potential small company stocks. Learn More Buy Now Cabot Stock of the Week Cabot Stock of the Week offers the very best of all Cabot stocks across the investing spectrum. Learn More Buy Now Cabot Top Ten Trader Designed for experienced investors, Cabot Top Ten Trader is your ticket to fast profits in stocks that are under accumulation now. Learn More Buy Now Cabot Undervalued Stocks Advisor Yes, you can have Growth AND Value! Learn More Buy Now. I know that you want your subscribers to make money. All I can say is that I am so fortunate to be your subscriber. From Cabot Emerging Markets Investor Our Emerging Markets Timer remains bullish, but after a few weeks of hesitation, the next handful of days will be critical. Updated June 15, Enter Your Log In Credentials. Subscribe to Our Newsletter Discover the hottest stocks, investing tips and analysis from Cabot analysts in our free Wall Street's Best Daily newsletter delivered right to your inbox. Maximum upload file size: View attachment page Edit more details Delete Permanently. Align Left Center Right None. Link To Image URL Custom URL None. Link To Media File Attachment Page Image URL Custom URL None. Advanced Options Image Title Attribute Image CSS Class. Preload Auto Metadata None. Add myths sources for maximum HTML5 playback:
The answer to that question would be yes, as a study has confirmed.
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The Nahuatls developed a philosopher class that differed in purpose from the more rigidly religious objectives of the priestly class.