Last week, in Part 2 of my Patterns & Profits Cash Course, I showed you the cost of buying one of the hottest AI stocks in the market. And, as you may recall, it wasn’t cheap.
“But Tom, can’t you just dollar cost average instead?” you might be wondering…
The answer is, yes – you could do that. But just because you can doesn’t mean you should every time. Dollar cost averaging has its advantages, like giving you the chance to build your portfolio with a fixed amount of money. But, it can cost you in other ways, too. Stock prices, for example, could (and typically) do go up over time. And when that happens, you could end up with fewer shares of stock – for the same price – using this method.
That’s a more-for-less strategy that’s just not worth it in my book. Instead, there’s a better way to buy expensive stocks – for a fraction of the price.
The Power of Options
What most of the billionaires and hedge fund managers on Wall Street want you to believe is that options are too risky, too complicated, and simply not worth your time. They’d rather have you dump hundreds of thousands of dollars on the most expensive stocks out there – so they can take the profits. And they’re counting on the misinformation out there about options to keep it that way.
Here’s the truth…
Listed, exchange-traded stock options launched via the Chicago Board Options Exchange (CBOE) in 1973 to mitigate risk and give you, the “little guy,” leverage in the market. When you buy a stock, you’re at the mercy of the market when it comes to price. In fact, U.S. stocks are more expensive now than ever before. So, for example, if you want to buy one share of Booking Holdings Inc. (BKNG), you would have to spend around $3,992 dollars… for a single share.
But with options, you could pay $500 or less to essentially “rent” 100 shares of the stock, instead. By doing so, you can control the number of shares of a specific stock you want – and increase your leverage without tying up a large amount of capital in your trading account. (Most brokerages require a deposit of $2,000 or less to get started).
The other common myth is that you can’t make any real money with options. Wrong again. You just need to know what you’re doing. You wouldn’t buy a car and take it out on the highway when you don’t know how to drive… the same idea applies to options trading. To be successful, you need to understand what they are, how to use them, and when to use them. Once you do, they become an invaluable tool that you can use in a variety of ways to profit from the markets – up, down, or sideways. And in times of high market volatility, options can give you protection – and profits – compared to other traditional investing methods.
As far as options being “too complicated,” again… lies.
Options are extremely easy to trade when you know how to use them. I’ve taught hundreds of thousands of students over three decades how to spot patterns and build low-risk trades. And in Part 3 of the Cash Course, I’m going to show you exactly why options are one of the easiest and most lucrative ways to make money in the market.
Click on the video below – and let’s get started…
Cheers,
Tom Gentile
America’s Pattern Trader