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Trading Options: Building Wealth with Puts and Calls

When it comes to building wealth, options are the seasoned trader’s secret weapon. But, make no mistake: They are not for everyone. They are speculative in nature and carry inherent risks. So, when trading options, you should never invest more than you can afford to lose.

The two types of option are puts and calls. Put options give you the right to sell a specific investment, at a set price, within a certain period of time. The current market price is irrelevant. So, puts can be perfect tools for downturn profits.

Calls are the opposite of puts. They give you the option to buy a specific investment, at a set price, within a certain period of time. And, once again, the current price doesn't matter. As long as the share price is higher than your strike price, simply exercise your option, sell at the market value and take your profits.

You can buy puts and calls on a variety of investments, including stocks, stock indexes, exchange-traded funds (ETFs), even major currencies. And, unlike futures and other speculative securities, trading options can substantially limit your risk.

True, writing options or selling them short does expose you to unlimited risk. But, aside from this, you never have to worry about getting a margin call, and the only money you can lose is the amount you invest plus your broker’s commission.

Despite this, puts and calls offer virtually unlimited profit potential. They use leverage to potentially multiply your investment many times over, making them the perfect way to “swing for the fences” — at least with those funds you set aside for speculative investments.

Options Trading Made Easier

Puts and calls are extremely versatile investments. You can use them to hedge your portfolio and control losses or to generate income and even position yourself for sizeable gains on relatively small investments.

Nevertheless, trading options can be complicated — especially for inexperienced traders. The learning curve can be tough and mistakes costly, so having an expert in your corner is essential.

That’s why MoneyShow brings together more than 1,500 of the world’s leading experts. Every day you have access to their articles, insights and recommendations plus timely news that may affect your portfolio.

You’ll find articles and videos explaining the basics of trading options and proven strategies for buying and exercising puts and calls along with tips for selecting which investments on which to buy or sell an option.

In other words, you’ll discover everything you need to know to educate yourself and learn how to add options to your own portfolio.

Empowering Traders for Over 35 years

Since 1981, MoneyShow has brought together the greatest minds in the financial world to provide you with the information you need to make successful investment decisions.

On this website are articles from the most respected and trusted names in the business who share insights on virtually every aspect of investing — including trading options. Additionally, you’ll find exclusive videos and free e-newsletters filled with actionable advice.

MoneyShow.com also features news and highlights from our renowned MoneyShow and Traders Expo conferences, workshops and online events. And, you’ll have opportunities to learn from our legendary experts through live webinars and virtual events.

Want even more access to the experts? Join us in person at any of our MoneyShow or Traders Expo events. Attend and discover for yourself why we’re the #1 resource for hundreds of thousands of investors, traders and financial advisors!