They're Scary, Complicated, Have a Bad Rep... And You Should Invest In Them

In today's Masters Series, adapted from the September 10, 2022 issue of our free DailyWealth e-letter, Doc compares the options market with insurance... talks about how options provide extra protection for your portfolio... and details how you can use this technique to capitalize on today's market uncertainty... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Master Series] Editor's note: Don't rule out the potential of portfolio "insurance"... If you're like most investors, you're probably skeptical about trading options. Most people avoid this market because they don't understand how options work. But according to Retirement Millionaire editor Dr. David "Doc" Eifrig, trading options is less risky than a regular buy-and-hold strategy... That's why Doc believes it's crucial for investors to learn the ins and outs of options trading in order to understand how to profit from this unique strategy. In today's Masters Series, adapted from the September 10, 2022 issue of our free DailyWealth e-letter, Doc compares the options market with insurance... talks about how options provide extra protection for your portfolio... and details how you can use this technique to capitalize on today's market uncertainty... --------------------------------------------------------------- They're Scary, Complicated, Have a Bad Rep... And You Should Invest In Them By Dr. David Eifrig, editor, Retirement Millionaire Today's topic has earned a nasty reputation. It scares most people. And folks just don't want to take the time to understand it. But if you're one of the few who will stick with me to the end and give it a chance, I'm sure you'll gain an appreciation for them... And that's because you'll learn about one of the best ways to consistently earn hundreds of extra dollars every month. I'm talking about options. If you're trying to learn the basics of options, most websites and free courses give explanations that are too technical and dry. And if you hear about options on the news, all you'll hear is how dangerous they are. But the truth is that options aren't all that complicated to learn... if you give them a chance. And I'm here to tell you that they don't have to be risky. In fact, you can use options to have significantly less risk than a regular buy-and-hold stock investor. So rather than start by giving you some definition of what an option is that will make your brain hurt, I want you to think about them as insurance... You see, insurance is a beautiful business. Most folks agree that if you're paying insurance, whether on your house or your car, you're getting a raw deal. You pay a premium month after month... and you will likely never use your policy. Your house never burns down, and your car doesn't get wrecked. So the money you pay in premiums is essentially just money down the drain. But you're happy to pay for peace of mind. Insurance companies make their living by cashing in on people's fears. Folks fear burglary. They fear natural disasters and even their own carelessness. And because they're fearful of all these things, they're willing to pay up for insurance. While insurance companies sometimes have to pay out claims to policyholders, most of the time they collect your premiums and just walk away. It's a fantastic business... when done correctly. It's done correctly when they don't sell home insurance to former arsonists or car insurance to teenagers who just crashed their parent's car. Insurance companies need to be selective about who they offer their services to. They need to do their homework or charge higher premiums to offset some of the risk for certain individuals. When they do that, insurance can be extremely profitable. Premium checks flow in every month. And companies with reliable income streams are the ones that last. Selling insurance is something I do every month. And it's the greatest source of income I've ever come across. Now, I'm not talking about selling insurance for things like homes or cars... I'm talking about selling insurance to folks who are scared of stocks falling. And trust me, there's no shortage of investors who are fearful of stocks crashing... especially with looming recession fears and inflation running rampant. If you could convince worried investors to pay you a premium for market protection every month and – the majority of the time – keep their premiums and just walk away... sign me up. Well, it's possible. Let me explain... --------------------------------------------------------------- Recommended Link: [Results of Our Real Money Demo This Week]( We aired a Real Money Demo – which you may have missed. Kevin Kisner, a PGA Tour golf pro, tried to collect $4,000 in 60 seconds by selling put options. He had high hopes, using the secret behind our firm's most successful research service. [But what happened next surprised us all](. --------------------------------------------------------------- The cheapest and one of the most common forms of protection is a "put option." Put options are just like home insurance. The buyer pays a premium and hopes that he never has to use it. And in most situations, the buyer of a put option does not need to use the insurance policy. If stocks don't crash, that means the seller of the put keeps the premium and walks away. There's no such thing as a free lunch, but this is as good as it gets. Now I know many of you are probably wondering what happens when the put buyer, or the person who bought the insurance, needs to use his policy. Let's say stocks do fall. Won't the seller of the put be in big trouble? They could be, sure... But like I mentioned earlier, you don't want to sell insurance to former arsonists. And you don't want to sell put options on risky stocks. The best thing to do is sell insurance on big, sturdy, blue-chip companies. These are giants like Coca-Cola (KO) and Microsoft (MSFT). These stocks rarely have wild price swings. And even though these are fantastic businesses that generate massive amounts of cash, there are still investors who want to buy insurance against them. The likelihood of Coca-Cola falling 20% in a short time is pretty slim, but people want to sleep well at night... so they buy a cheap put option. I'm willing to take the other end of that trade all day long. And here's the thing... If you only sell put options on stocks you want to own, you can't lose. Let's think about the worst-case scenario where Coca-Cola falls 10% in a matter of days. The put buyer will use his insurance to sell his Coca-Cola shares to us for the price we agreed upon at the beginning of the trade. So everything went wrong in this trade... but we end up owning shares of a world-class business for less than it was trading for when we entered the trade (since we get to keep the premium he paid us). If you sell insurance against low-risk, blue-chip stocks, you'll collect safe income each month. That extra income can help you grow your retirement fund, pay bills, and even pay for a trip to the Bahamas. And again, worst-case scenario, you end up owning shares of a great business for a cheaper price. It's a win-win... Here's to our health, wealth, and a great retirement, Dr. David Eifrig --------------------------------------------------------------- Editor's note: Selling options is Doc's primary strategy in his Retirement Trader service. This strategy is so safe that he boasts a 94% win rate over a decade. And he's currently on a 176-trade winning streak. But you don't have to be a pro trader to use this technique... In fact, it's so easy to learn that Doc recently sat down with a PGA Tour golf pro to teach him how to trade options with his own money – giving him the chance to earn instant payouts of hundreds of dollars at a time. [Click here to watch the full replay](... --------------------------------------------------------------- Recommended Link: [EXPOSED: The 'FASB' Deception]( This powerful (and unaccountable) agency – run by seven millionaire bureaucrats – is about to help corporate insiders make millions from the next recession... while many popular stocks get cut in half. One highly respected forensic accountant just sounded the alarm – and named a shortlist of popular stocks he's urging you to dump immediately. [Do these three things today to protect yourself](. --------------------------------------------------------------- You have received this e-mail as part of your subscription to Stansberry Digest. If you no longer want to receive e-mails from Stansberry Digest [click here](. 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