You know what drives me nuts?
The fact that so many traders with small accounts think they can’t trade high-priced stocks…
They think that names like NVIDIA (NASDAQ: NVDA) and Palantir (NASDAQ: PLTR), two of my favorite swing trades by the way, are off limits to them.
This is the farthest thing from the truth…
And you know what else makes me crazy?
That so many of you don’t know how to make gains while you’re asleep!
My colleague and expert trader, Tim Sykes, has discovered a “loophole” in an overlooked corner of the market, and it opens only AFTER MIDNIGHT…
And he’s made thousands of dollars in overnight profits!
Unfortunately, this loophole is going away soon…
But Tim is sharing it with you right now! Even better, in honor of the Fourth of July, he’s offering it for just $1!
Learn about the Midnight Trade in his video below ASAP!
In the meantime, if you think you can’t get in on the action of the large-cap tickers, you’re wrong.
Table of Contents
Have You Ever Considered Options?
Not everyone has the account size to buy 100 shares of Amazon (NASDAQ: AMZN) or Alphabet (NASDAQ: GOOG)…
No problem!
Here’s the solution: options trading.
Before you roll your eyes and say, “Nope, that’s way too complicated,” hear me out…
It’s not as scary as it sounds.
And if you’re serious about growing your account, especially with a smaller amount of capital, this strategy can be a game-changer.
What Are Options (Really)?
Options give you the right, but not the obligation, to buy or sell a stock at a certain price before a certain date.
Think of it like calling dibs on a stock at a set price.
One options contract represents 100 shares of the underlying stock.
There are two main types:
- Call options: You’re betting the stock will go up.
- Put options: You’re betting the stock will go down.
Here are two hypothetical examples:
Call Option (Bullish):
Say a stock is trading at $50, and you think it’s headed to $60.
You could buy a call option with a strike price of $55.
If the stock hits $60, you can still “buy” it at $55 and lock in a $5 profit (minus the premium, which is what you paid for the option contract).
And if it hits $70 or $80?
Even better.
Put Option (Bearish):
Now, say you think a stock is going to drop.
It’s at $50, and you buy a put option with a strike of $45.
If the stock drops to $40, you’re able to “sell” it at $45, again, pocketing the difference (minus the premium you paid for the put option contract).
Both strategies let you participate in big stock moves without ever owning the stock.
Options Glossary
These are some common terms you’ll hear when it comes to options:
- Strike Price: The price at which you agree to buy/sell the stock.
- Premium: The price you pay for the option contract.
- Expiration Date: The deadline to use (or lose) the option.
- In-the-Money: Your option is profitable at the moment. For example, you own a call option with a strike of $50, and the stock is trading at $60.
- Out-of-the-Money: Your option is not profitable at the moment. For example, you own a call option with a strike of $50, and the stock is trading at $40.
- At-the-Money: The stock is trading right at your strike price.
- Intrinsic Value: How much your option is worth right now.
- Extrinsic Value: The extra value based on time until expiration and volatility of the underlying stock.
Why Trade Options?
Options come with serious benefits, especially if you’re working with a smaller account.
Leverage:
Control 100 shares of a $300 stock like AMZN for a fraction of the cost.
Flexibility:
Generate income by selling options on stock you already own, speculate, or protect existing positions.
Limited Risk:
If you’re buying an option (not selling it), the most you can lose is the premium. That’s a big win for risk management.
Simple Options Strategies to Get Started
Here are four beginner-friendly strategies:
- Long Call: Buy a call if you think the stock will rise.
- Long Put: Buy a put if you think it’s heading lower.
- Covered Call: If you already own the stock, sell a call against it to collect the premium.
- Protective Put: If you already own the stock, buy a put as insurance in case the price goes down.
Know the Risks
As much as I encourage traders to use options, they are not magic. Nothing in trading is, after all.
The biggest risk when you buy an option is that the stock doesn’t move like you expected, and the option expires worthless. You lose the premium.
That’s why you always need a plan…
If you’re trading without a plan, you’re gambling.
My Final Thoughts…
If you’ve been sitting on the sidelines thinking big-name stocks are out of reach, think again.
With the right strategy, a bit of education, and a disciplined approach, you can get in the game without tying up your entire account.
Whether you’re looking to grow a small account, add flexibility to your trades, or just expand your skill set, this strategy puts the power back in your hands.
Study up, start small, and stay focused…
Because the best traders aren’t the ones with the biggest bankroll.
They’re the ones with the sharpest tools and the smartest plan.
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
- How much do you know about trading OTC stocks?
- Can you spot a breakout before it happens? Learn how.
- The stocks I love to see on my radar.