Schaeffer’s Investment Research Review Explains the Pros Options Trading

Schaeffer's Investment Research Review

October 6, 2021

Schaeffer's Investment Research Review Explains Pros Options Trading

Schaeffer’s Investment Research Review explains the pros of options trading.

1. Options are cost-effective

Schaeffer’s Investment Research Review explains that you can leverage options. A stock investor can also have a good return with options. However, options trading has more savings, as the example below shows. Here is a good but simple example from Investopedia.

For example, to purchase 200 shares of an $80 stock, an investor must pay out $16,000. However, if the investor were to purchase two $20 calls (with each contract representing 100 shares), the total outlay would be only $4,000 (2 contracts x 100 shares/contract x $20 market price). The investor would then have an additional $12,000 to use at his or her discretion.

Of course, options trading requires a good strategy to maximize its benefits, and that’s the reason a strategy called an Expectational Analysis is popular at Schaeffer’s Investment Research.  

2. Options have few risks 

 According to Schaeffer’s Investment Research Review, options have few risks. That’s because investors don’t have to commit a huge amount of their finances compared to equities. Also, options remain stable despite changes in gape openings. 

Schaeffer’s Investment Research adds that options offer a lot of protection against losses compared to stocks. For instance, an investor has to place a stop-loss order when buying stocks. With a stop-order, the investor wants to avoid losses up to a particular price. So, when the investor’s stock trades at or under the minimum as the order shows, a stop order comes into force.

However, you’re unlikely to experience losses with options because they don’t cease trading even if the market stops trading. You’ve got 24 hours, seven days a week of insurance, which you can’t get with stocks. Schaeffer’s Investment Research Review adds that these reasons make options a reliable investment hedge.

3. Options have higher potential returns

Schaeffer’s Investment Research says that you need a small amount of investment for options trading. But the great thing is that you can have a good return on investment for less money. It makes options an attractive investment for many people.

4. Options are great alternatives

According to Schaeffer’s Investment Research Review, options provide an investor with many alternatives and are flexible. You can build additional options through synthetic positions, for example. Investopedia explains a synthetic option as” a way to recreate the payoff and risk profile of a particular option using combinations of the underlying instrument and different options.”

Since 1981, Schaeffer’s Investment Research Review has relied on Bernier Schaeffer’s Expectanational Analysis to help investors get a good return on their investment. Bernie’s successful and unique approach to analyzing markets has won countless and prestigious accolades and awards.