Many of the stock market’s most popular companies will make major moves – both up and down – over the next 12 months. But as a trader, how do you make money from such moves? One popular method is options trading.
Options can be used as an effective hedge against a declining stock market to limit downside losses. Options can also be used for speculative purposes such as wagering on the direction of a stock. For example, you might think that the price of Apple’s stock has peaked and will be lower in a year’s time. Conversely, you might believe that Netflix’s share price will rise over the next 12 months.
There’s little doubt that many stocks will have large moves over the next 12 months and there are ways to make profits even if you are completely wrong on the direction. That’s where courses like Certus Trading’s “Trading Big Moves With Options” come in.
Certus Trading is an online trading program that offers educational courses on stocks, options and commodity futures trading. Certus Trading teaches you strategies that work across multiple asset classes so that you can find high probability trading opportunities in all market conditions.
In the Trading Big Moves With Options course, Certus Trading founder Matt Choi shows traders exactly how he uses options to profit from large moves in stocks. This hedged strategy plays both sides and is exactly how professional traders make money with options regardless of whether the stock moves up or down, Choi says.
Matt Choi is a professional trader, educator and best-selling author. A Chartered Market Technician, Choi has been trading successfully for more than 17 years, using a self-taught approach and trading with his own money. Like many newbies, Choi was initially attracted to day trading. He did quite well at it, too, but soon found out that staring at a screen all day was not for him. With the help of a mentor, Choi began focusing on longer-term swing trading with options and futures.
Under the Certus Trading banner, Choi has been offering a number of trading courses since 2011, including one on options.
By the end of Certus Trading’s options course, you will be able to choose stocks that are set to take off over the next 12 months, structure your trades to make a more than 100% return and hedge your trades to make money even if you are dead wrong on the direction, Choi says. You will also be able to put your trades in cruise control mode, so you can simply “set it and forget it,” he adds.
Keep in mind that although options can be profitable, like all investments, they also carry a certain amount of risk. When trading options with the assistance of a broker, you will usually see a disclaimer noting that options involve risks and are not suitable for everyone. In addition, they can be speculative in nature and often carry a substantial chance of loss.
Still, if you know how options work, and how to use them appropriately, they can give you a distinct advantage in the stock market. Importantly, options can allow you to tilt the odds in your favour. Even if using options for speculation strikes you as too risky, you can use options without speculating. It’s also helpful to know how corporations use options. For example, they might hedge foreign exchange risk or give employees stock options.
Trading options can help you make profits in the market, if used correctly. Make sure you do some research and you’ll soon be on your way to becoming a consistent and profitable trader.
