Look To The Leaps For Big Profits and Protection in High Volatility Investing – Oct 15 2014

With the DOW down over 450 points and the SPX collapsing below 1840 investors tend to flee from stocks rather than look for opportunities. The Leap Options are one of the areas I love to peruse when investors are dumping their shares in stocks I would own even for more than a year. Often though my leap puts expire out of the money and I end up just keeping the profits. Other times such as in the big bad bear of 2008 I ended up holding some shares that were assigned in January 2009.

The key to this combination trade though is trading within short-term options and leap options. A lot of investing successfully has to do with staying in your comfort zone. This type of trade strategy does not require the investor to be very active, leaves lots of room for errors and provide a strong level of protection for those investors who worry about catastrophic losses.

Leap To Profits

Whenever stocks tank, investors cringe and rightly so. No one wants to see their stocks pummeled and watch portfolios shrink as losses mount. At the same time though, it is crashes and plunges that bring out exceptional values and keeps the price of equities in line with actual valuations. That is part of what investors are seeing today.

This strategy article presents a combination trade that investors can tweak and adjust to suit their own style of outlook.

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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.