Sean, I read your book on option trading but I'm still gun-shy on taking a leap by myself. Do you…

Sean, I read your book on option trading but I'm still gun-shy on taking a leap by myself. Do you plan to recommend option trades, especially calls, in the future as I have learned that they can really accelerate the profits (or losses). I , do,understand the down side but surely it must be worth the risk as it seems so many investors have this as an important part of their investment strategy.

Options are speculative and should only be added in (in my opinion) once a well diversified portfolio of non-leveraged stocks has been fully developed. With that said, in buying calls, your max loss is the amount you paid for the call. So when you start, start with one contract just to get started. Remember, I suggest buying a call near-the-money (with a strike price near the current stock price) and with many months until expiration (six months or more). To me, a mistake is to buy a super-cheap option that's 30 days until expiring and way out of the money. Those are shots in the dark and they're cheap for a good reason.

I don't know if I'll add an options trading service or not. It's one reason why I wrote the book with the strategies. That way, in case I didn't do a newsletter service on them, you'd still have my direction and insights on them. I've had an options service before. I may again one day. We'll see.

Thank you, Sean. That's great advice and something that I was thinking about doing. Buy near-the-money price calls with an expiration of 12-18 months out. Please pray about this service as I'm sure there are many of us who would love to follow your lead.

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Would you recommend only focusing on calls? I’ve bought a few and enjoy the variety (understanding its speculative), but I’ve never bought puts.

Puts are fine too but you want to flip the strategies (do the opposite). In other words, find downtrends and buy puts on those bear market bounces. Use the sell signals with the strategies for put entries rather than the buy entries for calls. But keep in mind that trend direction is key.

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