No matter what you may have been told by the talking heads in the mainstream media, there's only one true way to get rich in the stock market – and it's not the ol' buy-and-hold strategy.
Now, don't get me wrong…
It's true that you can make some money investing in stocks and mutual funds. But the most you're looking at on average (in a good year) is only about a 10% return. And to maximize your profits, you'll likely need to hang onto those investments for 10, 15, or even 20 years.
But you don't have to wait that long to get back what's rightfully yours.
In fact, you can make up to 1,163.48% gains in as little as four days.
And it's as easy as this…
Why Options Are the Fastest-Growing Moneymaker in the World
There are times when the price of a stock purchased for investment simply does NOT increase. There are times when a stock just sits still for weeks or months on end. That can be trying on our patience. What's worse is waiting for a stock to move while it's still been trading at the same price from six months to a year prior. It's simply infuriating.
In the above chart, we can see the $53 entry price (left-most circle) on International Paper Co. (NYSE: IP). And if you look at the far-right circle, which is almost one year later, IP is only trading at $55.
That's a meager two-point gain! Credit to those of you who have the constitution to sit on this for a year just to see a sub-4% gain, which isn't an actual profit until you sell it. At best, you'd have to hope for the dividends to be paid out as a small consolation. This is why we do things differently…
Think Like a Trader, Not an Investor
You can do this by looking at support and resistance areas where buying and selling at these levels can be accomplished.
Buying at $53 then selling at $58 could have been accomplished three times within the aforementioned year. With my method, that trader would have been making five points per share three times for a cumulative 15 points over the year's time frame.
Those 15 points represent a 28% gain on profit potential, which is a much better return for the trader than for the investor.
Bring in the options and you get the power and leverage of these positions working for you. Even when options don't result in larger point gains, the rate of return should still be much greater.
Using this same chart and the same three times IP traded between $53 and $58, we can also consider another option trading strategy…
About the Author
Tom Gentile is one of the world's foremost authorities on stock, futures and options trading.
With more than 25 years' experience trading stocks, futures, and options, Tom's style of trading systems and strategies are designed to help individual investors propel themselves past 99 percent of the trading crowd.