With the Labor Day holiday behind us, traders and investors have wrapped up their summer vacations and returned to their trading desks. The people who "sold in May and went away" missed out on some profits this summer as the market went on (and up) without them, and they have some catching up to do, either to get their portfolios back to where they were ... or up to where they should be.
Even though many institutional traders might have enjoyed an end-of-summer break, options trading volume continued its climb thanks to "regular" investors harnessing the power of options to make (and make back) profits on their own.
While your favorite students are back in school, now is the perfect time for you to brush up on some very important skills -- your money-making abilities! Specifically, it's time to take charge of your portfolio, and using options is a fantastic place to start.
I get a lot of questions from people who want to trade options but they're worried about whether their portfolio is big enough, or whether they should leave their capital alone for now because they need the money to live on.
And while committing money to any type of position can be stress-inducing, the ability to risk a lot less and position yourself to make the same-size (or bigger!) returns is a gift you shouldn't dismiss lightly. In fact, the options markets are designed for any size portfolio -- you don't need a large account to make yours perform like one!
Why are Options So Hot Right Now?
The options markets have been around since 1973.
Can you believe that put options didn't even debut until several years later? Imagine not having the ability to use puts to protect your stocks or to make money while the markets crumbled and stocks tanked!
Things have (thankfully) changed a great deal in the past few decades, as investing and, particularly, investing in options -- to play stocks, indexes, currencies, futures, commodities and Exchange-Traded Funds to the upside and the downside -- has become much-more mainstream.
In fact, the Options Industry Council (OIC) recently reported that, for the month of August, options trading volume is up nearly 9% year-over-year, with average daily trading volume coming in at 13.6 million contracts changing hands (compared to 12.5 million last year).
Unlike the "regular" markets, where a certain number of stocks are issued for each company (with the exception of special circumstances like stock splits), the options markets expand to include everyone who wants to be a part of them.
You've got to love a marketplace where there are enough opportunities -- and profits -- to go around for everybody!
How is it that the options markets have been around for over 35 years, and many people are only now just discovering them?
The good news is, it's never too late. Even if you're starting out with a small amount of money ...
