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How to Trade Options in a Recession

Posted March 17, 2008

“Options should not be the only investment vehicle you use. I recommend that you keep the bulk of your money (75-80%) in long-term investments and use the rest to trade options.” — Rick Pendergraft

by Rick Pendergraft

Baltimore – (TFN): I received a few emails this week regarding my Investor’s Daily Edge article on Monday (March 10) talking about the trade I recommended to K.I.S.S. subscribers. The emails agreed with the article, saying that the way to play this market is with short-term trades and with options.

As a follow-up to that article, I wanted to show you how beneficial trading options can be in a market like this.

First, options should not be the only investment vehicle you use. I recommend that you keep the bulk of your money (75-80%) in long-term investments and use the rest to trade options.

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Stock Market Shocker: How a Bunch of 5th Graders Made Fools of the Trading Elite…!

Wall Street wants you to believe that you have to entrust your money with the professionals and all their skills, resources and systems, if you want to make money in the markets. It’s what these guys do for a living! How could you possibly beat them?!

Nothing could be further from the truth. In fact, I have used an embarrassingly simple secret to make $15,048 in just 30 days… and boost my overall account balance 152% in less than a year.

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If we look at last week’s trade, you can see how this would have worked had you been following such a strategy.

Recession options trading: An example

For illustration purposes only, let’s say that you have $100,000. Portfolio A allocates 75 percent to an index fund and the rest to options. Portfolio B is allocated entirely to an index fund. Read on to learn how (and why) to trade options in today’s market.

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