The best way to make a significant amount of money in the stock market is by combining long stock with an options trading strategy.
By having a watch list consisting of SPY, SPX, QQQ and stocks like Amazon, JP Morgan, Microsoft and then selling options on those specific stocks / ETFs, you can achieve gains that far exceed the S&P.
By selling options on these stocks and ETFs, you'll collect option premium.
Then, you can wait for these stocks and ETFs to pull back by 10% - 20%, take ownership of these stocks or ETFs and then participate in the upside.
By combining this long stock strategy, with a solid options trading strategy, you can significantly outperform the market and you can even protect your portfolio to reduce portfolio volatility.
I discuss this in the education course at https://Beststockstrategy.com/memberships where effectively you can combine long stock with options in order to dramatically exceed the returns of the overall market.
Combining options with stocks is the best strategy - especially when using portfolio margin since portfolio margin allows you to leverage off the long stock without significantly decreasing your available buying power.
When you sell options your maximum profit is going to be the amount of premium that you collect.
The problem is that during periods of pullbacks, or bear markets, you're going to experience significant sequence risk, or correlation risk, where a lot of your positions are going to end up getting challenged.
If you're trading too large then you could be forced to close out that position at the most inopportune time.
So instead, your best choice is to sell options, stay small, and take ownership of the stocks after the option strike price has been penetrated, then you can participate in the upside of the stock.
Additionally, you can buy options during periods of market extremes to reduce portfolio volatility.
Conclusion: Combining Stocks with Options
Combining stocks with options is a great way to beat the market.
You can sell option using portfolio margin and take ownership of stocks at a reduced price and participate in the upside of the stocks.
Then, you can buy options during periods of market extremes.
Buying protective puts during periods of complacency, when the market is overextended, will allow you to profit from future volatility increases and reduce overall portfolio volatility.
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