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Hi guys and gals, Jason Bond here. I look forward to seeing you Thursday night at 8 PM ET. Feel free to stop by my chat room anytime.
Here’s today’s lesson.
Ever bought a call or put option and had it expire worthless?
Options act as insurance on stocks.
Meet Bob “the buyer” who has a big stock position in TSLA. But Elon Musk has been unpredictable lately.
So he “buys” $200 worth of OTM put options, a month out, to ‘insure’ his stock against unpredictable Elon.
He insures it for $100 a month through Geico.
Meet his agent, Sally “the seller.”
A month goes by and nothing bad happened to TSLA stock or Bob’s house.
The $200 worth of put options he bought, to insure his TSLA stock, expire worthless, as does the $100 home insurance.
In both examples, the seller collected the premium.
If Bob wants to insure his stock again, he’ll need to buy new put options.
Same for his house insurance, another $100 premium.
Which brings me to Warren Buffett.
Do you know what Warren Buffett’s favorite investment was?
Hint: it’s not Coca-Cola, Wells Fargo, Chevron, or even Apple. Although those have been great investments, he told Forbes:
“My favorite investment… is GEICO, which I learned about when I was 20 years old.”
Which makes sense, GEICO has increased billions since he acquired it.
How does an insurance company make that much profit?
They’re in the business of selling premiums they know will expire worthless.
Bob gets “peace of mind” while GEICO gets profit.
The same dynamic is at work when it comes to trading options.
You can either be a BUYER or SELLER of option contracts.
Geico calculates odds against Bob making a claim.
Option sellers bet against buyers making profits.
And in the $2,000 Small Account Journey that’s my edge.
It’s a live action case study and my most popular service.
My best push so far was $2,000 into $32,000 in about 4-months before a drawdown at which point I took profits.
Here’s my current balance.
Results are not typical. Trading is hard. Nothing is guaranteed.
I want to point out that I cannot speak for my members’ performance, as results may not be typical and trading is HARD. And I cannot guarantee you will make money. But what I can guarantee is that I will work my BUTT OFF to teach you WHY I trade WHAT I trade.
Which is why I alert members before I enter and exit trades. So they can learn in real time.
Like this 35% $600 win on COST earlier today (Wednesday).
These alerts show up right on your smartphone like a text message.
Recently I emailed you training #1 which is an overview, and on-demand here if you’d like to watch it again.
There are 8 training sessions in total.
Here’s training #2 which starts with how to place orders.
Now I’m all for motivating my readers.
And like the idea of trying to grow a $2,000 balance in Small Account Journey.
Hold onto the master cheat sheet for training #3 – #8 coming soon.
Click here to learn more about the $2,000 Small Account Journey.
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