The year is 2022 and volatility is all around us. An environment where option traders thrive! If you're an investor, trader or you care at all about your financial literacy or financial situation, you should be trading options. Trading options has the power to transform your life and give you the financial freedom you deserve. In this blog article I'm going to talk about why trading options is the most powerful high level skill you should be learning today.
Wether you realize it or not, options are all around us. From the real estate and houses we live in, to the food on our tables, to the financial markets we use to conduct business, there are options on every asset class in the world.
It doesn't matter who you are or what your background is, options are highly liquid leveraged instruments that are easily accessible to anyone who wants to use them.
Of course you need to educate yourself before you start trading them. Just like anything else they require patience, due diligence, respect and constant refinement of your processes and learning curve so you can maximize their use!
Check out The Daily Option's YouTube Channel, a place where you can learn a lot more about options!
Because options are highly liquid leveraged instruments, with many use cases and applications, they appeal to lots of investors and businesses small and large.
Here are some businesses, industries and parties that use options:
As you can see, there are lots of parties and industries using options to conduct business, manage risk, hedge risk, or transfer risk, and even speculators looking to capitalize on price movement of different underlying assets.
Another great resource to check out is the CME Group!
Some of the benefits of trading options are the ability to hedge any price risk, use defined risk strategies, substitute purchase, substitute sale, leveraged contracts by definition, reduced capital expenditure and the ability to create income.
Options are extremely flexible but just like anything else, they require you to have solid fundamentals to really use them to their full potential!
Because options are such a deep and diverse instrument, I will not be able to cover them in their entirety in this one blog post, but rest assured, more blogs and content are on the way!
Trading options is an extremely powerful tool set and skill to have in your arsenal as an investor. Because they are leveraged instruments, meaning you can control a large amount of money with a small amount of money, the same concept as a mortgage or gears in a car, this means you can make incredible returns in little to no time. This also means you can have large losses in little to no time as well. Which is why it's so important to really understand what options are and how to correctly use them!
I will not be covering definitions or going through a tutorial in this blog post but I will in future content.
Another extremely powerful concept to understand is that not only can we purchase options, but we can also sell options. This is VERY POWERFUL because it means we can use strategies that produce income on a daily, weekly, monthly or yearly basis, it's all up to you and the way you use options!
We can also use options to hedge risk for practically any asset class and cash positions we may hold. Say for example you had a $1,000,000 portfolio of Apple stock and you thought Apple might be headed for a decline. Instead of selling your shares you could use options to protect that downside risk.
Once you understand how options work and you've applied yourself, you really can do anything you want! You could start a hedge fund and raise unlimited capital for your proprietary trading strategies like some of top hedge fund managers in the world. You could trade for your friends and family, you could teach, you could even start a broker/dealer and service the industry as a market maker. The options are really endless, no pun intended! :P
You can check out The Daily Option's Instagram for more fun social media content related to options trading!
Learning to trade options is one of the most powerful high level skills you will ever learn!
We have briefly talked about why you should want to learn to trade options. We have discussed some of the industries, people and businesses that use options. We covered some of the benefits of trading options. We also went over what paths you might pursue after learning to trade options at a very high level.
Again, trading options is a craft with a lot of information and depth in an ever changing landscape of micro and macro global economic conditions. It's extremely important that you educate and apply yourself!
This isn't trading, financial or investment advice! I recommend consulting your lawyer, CPA or licensed fiduciary before making any decisions about trading options.
My name is Ryan Matthes and I have been trading options now for over 10 years. It has not been easy! There have been many failures, losses and difficult experiences, but I wouldn't change it for anything! Everyone learns differently and that's a good thing. So no matter where you are in your learning curve, DON'T GIVE UP!
Through all of these experiences, the one thing I know for sure, is that trading options is one of the most powerful high level skills you will ever learn!
Trading securities is risky and you must accept this risk. Please check out The Daily Option's Risk Disclosure for more information.