Good morning, traders…
Ben here.
People with the right education — who take action and remain disciplined — can flourish into consistently winning options traders.
But when I started trading options, I noticed some negative stigma around it…
I’d hear that options trading was a recipe for disaster and that I should stick to buying and holding boring index funds.
However, after learning the game myself, I realized that these options-trading skeptics were dead wrong.
Day trading options isn’t impossible, it’s about building the foundation required to succeed — and understanding how bogus some of the fearmongering is.
So, if you’ve always wondered about trading options — but been discouraged by some of these naysayers — it’s time to pay attention.
Today, we’ll investigate whether options are really as risky as people think…
✅ OPTIONS PICK OF THE DAY ☑️
I’m keeping a close eye on Pinterest Inc. (NASDAQ: PINS) calls this week after seeing some notable repeat orders come through first thing in the morning on Tuesday:
Orders continued to come in throughout the day, which tells me that ‘smart money’ traders are betting big on PINS.
Consider trading calls if PINS cracks the $32.20 level.
“Options Contracts are Depreciating Assets”
The first point I usually hear from skeptics is that options contracts are depreciating assets that often expire worthless, whereas shares are good forever.
While this is true, it isn’t a good reason to avoid trading options altogether.
Most traders fail. Most companies fail. Most athletes fail.
But if every aspiring professional felt this was a reason to stop trying, no one would become a master at anything.
I experienced the same sort of doubts during my basketball career…
Very few people believed that I would make it as a professional athlete until I practiced my butt off to prove them wrong.
Here’s the thing … with the high risk that comes with buying options, the possibility of HUGE REWARDS comes with it.
Take it from me: At the end of July, I traded AT&T Inc. (NYSE: T) calls from $0.22 to $0.50 — a gain of 127% in just over 24 hours.
Then, a few weeks later, I traded Paypal Holdings Inc. (NASDAQ: PYPL) calls from $0.95 to $1.33 — a 40% gain in 8 minutes.
This risk/reward profile is a pretty even trade-off. Sure, my contracts can theoretically go to zero. But only if I mismanage the trade.
“You Can Lose Money Faster with Options”
I’ll often hear people say they won’t trade options because they’re afraid of losing money quickly.
Yes, if you’re reckless and undisciplined, you can lose money faster on short-dated options contracts than by trading common shares.
This is because the potential single-day % moves are much greater for weekly options than any stocks in the market.
But there’s a flip side to this coin…
Because each options contract represents 100 shares of the underlying stock, the leverage on any upside is massive.
This means you can potentially make 100%-500% gains on weekly contracts.
Again, it’s a trade-off…
What stocks go 5x or 10x in a week? Only equally risky penny stocks. It all evens out in the end.
If you want to open your trading up to these kinds of incredible gains, you also have to expose yourself to an elevated level of risk.
And only you can determine how much risk you’re willing to take.
“Options Trading is Too Complicated”
Finally, some people think options trading is just too complicated to understand.
They think they need a PhD in finance to make sense of puts, calls, strike prices, and expiration dates.
But here’s the truth: You wouldn’t be reading this if it was too advanced for you.
Yes, options come with a learning curve, but so does anything worth mastering…
Think about it — when you first learned to drive a car, you didn’t know the rules of the road or even the basic mechanics of driving. It was all new and probably felt overwhelming at first.
But with time, practice, and the right vehicle — you became a safe, confident driver. Options trading is no different.
The basics can be learned by anyone willing to put in the effort, and as you gain experience, what once seemed complicated will become second nature.
The key is not to be intimidated by the complexity but to approach it as a challenge.
Now, before we go, let’s look at:
💰The Biggest Smart-Money Bets of the Day💰
- $9 million bullish bet on NVDA 09/13/2024 $118 calls @ $1.42 avg. (seen on 9/3)
- $8.5 million bullish bet on AAPL 09/20/2024 $225 calls @ $4.69 avg. (seen on 9/3)
- $3.7 million bullish bet on COIN 09/13/2024 $190 calls @ $2.34 avg. (seen on 9/3)
Happy trading,
Ben Sturgill
P.S. If you’re struggling to secure consistent gains in this market, it’s time to pay attention…
This SUNDAY, September 8 at 1 p.m. EST — my colleague Danny Phee is hosting an urgent LIVE WEBINAR where he’ll reveal the most promising ‘smart money’ bets we’re seeing this week.
Stop missing slam-dunk setups — CLICK HERE NOW TO RESERVE YOUR SEAT.
*Past performance does not indicate future results
