In trading, stocks will either go up or down.
Many of you know your choices for a stock going up but what do you do when you think a stock is going to go down?
If you were to short a stock, you run the risk of a possible “squeeze.”
This is when the price of a company rises not based on value but simply because there are more shares sold than there are shares available. People are being forced to buy the stock because the price keeps rising and there are limited shares available.
As an example, I saw that a company priced at $148 per share was under pressure.
Based on a combination of a bad chart and bad news, it looked like a fighter that was about to go down.
I bought the $148 PUT for $1.
That’s the right but not obligation to sell the stock at $148.
If it drops to $130, I make $18 and I’m only risking $1.
On 1 contract that’s $100 risk to make $1800 and on 10 contracts that’s $1000 risk to make $18,000.
That’s the POWER of Options and you can get that power here for free with no strings attached.
I’m giving you this beginner’s guide to trading options today so that I have the opportunity to become your go to Options’s Guru.
Like options, it’s your right but not obligation!
If the company went up 100 points I could only lose that $1 but if it went down 100 points, I get it all.
That’s the power of $1 in an Options trade.
When it comes to trading, it’s nice to know what your choices are so you can make the ultimate risk/reward decisions!
I look forward to hearing about your success!