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Try This Strategy in These Crazy Markets
From Baltimore – These are interesting times in financial markets, indeed.
Watching this crazy market is like witnessing a fanciful blue balloon erratically bouncing in the windy sky. We see it bobbing merrily about, perilously close to sharp tree branches nearby.
Upon contact, it will most certainly pop.
If that’s unnerving (as it should be), I’m relieved to bring you a timely discussion around a more “grounded” way to invest in stocks. It’s a strategy that involves options. But please don’t let that scare you away, as this type of option play is definitely NOT a wasted gamble.
At the Club, we’re all about “smart speculation,” not gambling. And there’s a type of option strategy that shuns the trader limelight… because it is not going to provide the adrenaline rush of a gambling trade. But it can give you a huge payoff just the same, and it allows for a much cheaper way to invest in stocks than buying the same shares outright.
So let’s get started…
“LEAPSing” Into the Future
Our focus today is on LEAPS, or Long-Term Equity Anticipation Securities.
LEAPS are considered a more conservative options strategy because you can control your favorite stocks for less money than if you were to buy the shares outright. And with LEAPS, the odds of winning are not against you.
LEAPS are also great for first-time options investors because they allow for more time in the trade – a minimum of one year and often as long as three years – and investors don’t need to prove to their brokers they are highly experienced traders to qualify.
And who better to show you the positive portfolio power of LEAPS than one of the best options strategists in the country, Karim Rahemtulla?
Karim is the Monument Traders Alliance Head Fundamental Tactician and co-founder of The War Room, which is one of the most unique and effective trading forums that exists today for investors at all levels of experience.
Karim has been advising the Club on more conservative ways to trade options for more than 25 years. He’s become a multimillionaire through his own investing and has dedicated his life to teaching others how to be smart investors by using little-known but highly effective options strategies.
As you can see below, Karim is well known for his outstanding track record both with LEAPS and selling put options. The chart below shows his record in The War Room since early 2019…
Put selling – another of Karim’s areas of trading expertise – involves identifying stocks using a proprietary formula that requires high returns, a low probability of getting put and a big discount to the market price of the shares. Karim says he always looks to own the shares 20% to 50% below the current price… or get paid handsomely for trying.
In today’s Market Wake-Up Call with Senior Editor and host Rachel Gearhart, Karim clearly shows the simple yet powerful math that can make LEAPS options work in your favor, allowing for a bigger return on your money with less risk.
“If you think the stock is going to go higher, always look to a [LEAPS] option because you’re going to put less money up,” Karim says in the video. “Using a [LEAPS] option… shows that you can really reduce the cash outlay.”
Karim also reveals his top stock pick for this market. He predicts you can do much better – and get the stock cheaper – by buying a LEAPS option on the shares instead of buying the shares outright. The play is in the relatively inexpensive gold mining sector. And if you’re worried about looming inflation, it’s just the trade for you.
Karim and co-founder Bryan Bottarelli started Monument Traders Alliance and its free Trade of the Day e-letter to teach everyday investors how to trade the smart way, using the most effective strategies that have worked to make them multimillionaire investors over the past decades.
They also launched The War Room, a highly dynamic trading research forum where Bryan and Karim make real-time trading recommendations for readers from all backgrounds.
Click here to learn more about The War Room.
Yes, the market is a bit crazy right now.
As Karim says in today’s video, “This world is going absolutely bananas, but there is always opportunity.”
Enjoy your Sunday,
Julia