The Scoop on Options: Less Risk, More Profits

If you're not yet an active options trader, now might be a good time to start. [Shield] AN OXFORD CLUB PUBLICATION [Profit Trends]( [Oxford Options Accelerator]( The Scoop on Options: Less Risk, More Profits Anthony Summers | Senior Research Analyst | The Oxford Club [Anthony Summers] The options market is one of the most misunderstood areas of investing. Put simply, options are contractual agreements between traders that act as a kind of insurance against future price volatility. However, they are also commonly used to bet on a stock's performance. But you shouldn't confuse intelligent speculation with mindless gambling. There's a world of difference between playing the odds at the roulette table and trading options. In fact, if options trading were nothing more than gambling, major investment firms and professional traders wouldn't use options to hedge against market risk. Just take a look at the last couple of months and you'll notice the inverse relationship. When stocks go down, options volume typically goes up in a big way. [Chart - When Stocks Go Down, Options Volume Goes Up]( In fact, in the last two years, the three months with the highest levels of equity options volume occurred when the S&P 500 had a negative monthly return. [Chart - As Stocks Tumbled, Options Gained Steam]( In a bear market, investors have few choices when it comes to trading. In fact, they really have only two choices: They can short stocks... or they can trade options in order to gain from falling stock prices. Shorting stocks entails selling borrowed shares at a higher price and then later repurchasing those shares at a lower price to return them to the lender. You can think of it as selling high and then buying low. The short seller keeps the difference and profits on the fall in the stock's price. However, shorting stocks comes with great risk. It's one of the few methods of trading that can cause someone to lose more than they put in. So it's best left to the professionals. [On the other hand, options trading involves far less risk than short selling and can help investors achieve even greater profits.]( With options, your downside is strictly defined: You can't lose more than what you paid for the option. And when investors are up against a wall, options trading can be a powerful way to trade the market defensively, as well as a way to trade for big market gains. Couple that with the growing emergence of investing-focused online chat rooms and message boards, and you'll see why more and more retail investors have started trading options themselves. In fact, a study by online brokerage firm E-Trade found that, among investors, 40% of millennials and 25% of Gen Xers were active options traders (making at least one options trade per month). Goldman Sachs has noted that individual investors indeed make up a significant proportion of daily options activity. And Bloomberg found that options volume has exploded since 2020... just about tripling in the past two years. Overall, [the options market has become a go-to resource for ordinary investors]( - especially in the wake of so much market volatility. It's clear why. With the unique ability to be used in both offensive and defensive trading without bringing on the exorbitant risks of short selling, options are a great way to both manage risk and supercharge portfolio returns. So if you're not yet an active options trader, now might be a good time to start. But don't blindly put your hard-earned money at risk. That's a surefire way to get burned. Our very own Chief Trends Strategist Matthew Carr is a world-class expert when it comes to options trading. And the proprietary strategy he uses to trade options in his VIP Trading Service Dynamic Fortunes has [outperformed the S&P 500 by a massive 610%]( on a relative basis. Matthew can help you harness the power of options in the right way - while also showing you a safer way to trade - so you can hit your financial goals faster and with less risk. He's doing all of this in a special online event called the [Oxford Options Accelerator]( - and it's 100% FREE. [Click here to follow along in Matthew's zero-cost training right now.]( Good investing, Anthony [The Oxford Club] You are receiving this email because you subscribed to Profit Trends. Profit Trends is published by The Oxford Club. Questions? Check out our [FAQs](. Trying to reach us? [Contact us here.]( Please do not reply to this email as it goes to an unmonitored inbox. 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