Why Investors Buy Options…
In the stock and option’s market, the biggest profits come from owning Call or Put options.
The reason is because buying options have high risk and high reward.
Call Option buyers make the most money when the stock rises in price.
Put Option buyers make the most money when the stock drops in price.
OptionsPop.com uses just one simple strategy –
Buy Call or Put Options on certain stocks and sell them within 2 to 9 days!
The Option Buyer’s Advantage…
It's the power of leverage!
Traders use options because they want a huge return in exchange for a little investment.
Here's an example.
Let's say you discovered Amazon ( stock ticker symbol AMZN ) was great to trade because the stock was about to make a big move up and you bought 1000 shares of the stock.
Since each share is trading at $1824 a share, it would cost you $1,824,000 to buy 1000 shares of AMZN.
Now let's say that right after you buy AMZN it jumps up in price by thirteen dollars ($13.00 ) per share.
When the price of the stock went up thirteen dollars per share, you made $13.00 on each of your 1000 shares. for. a gain of. $13,000!
That's a nice profit on one trade.
But let's start over and say you want to use options on AMZN instead. An "option" gives you the right. but not the obligation. to buy shares of the stock.
Let's say you can buy an option to buy shares of AMZN for $.75 cents each. Each option contract equals 100 shares of stock, so 10 contracts controls 1000 shares. And this would cost you $750.
Staying with the example, when the stock price of AMZN jumped up by thirteen dollars in one day.. the price of the AMZN Call options went from $.75 cents to $2.25.
Your profit in this example is $1.50, not as much as the stock, but since you controlled 1000 shares of stock. you end up with a profit of. $1500 !
And since you only put $750 into the trade, you made.
300% Return On 1 Trade In 24 Hours!
That’s an options “pop.”
It’s the power of leverage and it's the main reason why so many traders prefer trading options rather than stocks.
The Disadvantages To Buying Options…
1. If you buy an option, your biggest risk is that the underlying stock does not move in your direction… or moves against your direction. In which case, the value of the option you bought goes down.
2. If you buy an option and the stock stays in a narrow price range through the option’s expiration, the option will expire worthless.
That’s why the underlying stock you bought an option on MUST move in your direction with 2 to 10 days. Otherwise the option will go down in price.
Our goal is to select stocks that have a high probability of moving up or down in 2 to 9 days and alerting you to the best options to use on that stock.