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Today I’m not going to talk about commodities. I recognize that you may be most interested in investing in “stuff” – but you likely still invest in other asset classes, like the general stock market, bonds, real estate, etc.
Today I’m also going to tell you about an asset class that I don’t invest in very often.
But first, I’d like you to think for a minute – and answer this question:
What do all successful investors have in common?
Is it that they all buy low and sell high? Do they all get greedy when the market is fearful, and fearful when the market is greedy – like Warren Buffett? Do they all excel at reading balance sheets and income statements like Peter Lynch?
If you think about it for very long, successful investors pretty much have nothing in common (except for their success, obviously.)
Successful investors find a strategy – or even a specific investment or asset class – that works for them. For some folks, that’s buying blue chip stocks. For others, it’s buying and selling baseball cards.
The point is: there’s no universal “path to wealth” in the investment world.
What works for you might not work for me.
Which brings me to a friend of mine – a professional options investor named Andy Crowder.
Andy has over 10 years experience trading options for his own portfolio – and he has also run an options service for eight years. Andy’s service is unparalleled in the field because (as you may know) most options investors lose money. They buy calls or puts. The problem with buying options is that it’s a mathematical fact that options expire worthless 85% of the time.
So when you buy a call or a put, you have an 85% likelihood of losing money!
And yet, people still buy puts and calls. Sometimes it makes sense – if you’re using puts or calls as a part of a larger portfolio strategy to hedge yourself against loss.
But again – most people aren’t hedging anything when they buy options. They’re rolling the dice for the chance at a large one-time gain.
The problem is, they lose 85% of the time. The 15% of the time that they win does not help them.
So at the most basic level, Andy just takes the other side of that statistical likelihood.
He sells options. And 85% of the time, he wins. He keeps his position size small for each trade, and is satisfied with achieving lots of small wins over time. These small wins easily outpace his occasional losing positions.
Andy’s had great success using this strategy. He typically makes between 5%-8% gains on 2-5 trades per month. Sometimes he’ll only have one trade a month. Other times he might have up to 10. But he lets the odds of success dictate when he makes a trade. If you let the odds of success work on your side, the gains will come.
It’s something most stock investors never even consider. They think, How much money will I make if this stock goes up $5 a share? Instead, they should be asking themselves, “What is the actual statistical likelihood that this stock will go up $5 a share?”
He’s not anything like the average options trader who takes lots of risk for huge upside. He takes very little risk for modest upside. It might sound boring to you. It’s too boring for most options traders, in fact. And it’s certainly too boring for people who look at the stock market as some kind of lottery or casino.
It’s not for everybody!
But if you think it might be for you – whether you’ve traded options before, or you’ve always wanted to – Andy is hosting a completely free live-chat event this Thursday at 6 pm EST. If you want to secure your seat at this event, I encourage you sign up by clicking here now.