An Options Trade Well Worth the Risk

I had been looking forward for months to meeting a dozen gurus who I knew would be presenters at ETR’s annual Wealth-Building Bootcamp last week. These guys … the likes of Brian Tracy, Bob Bly, Frank McKinney … didn’t disappoint either. They all have such memorable ways of driving home their points.

[Ed. Note: If you couldn’t be at Bootcamp yourself, you’ll be happy to know that the presentations of all our featured speakers were professionally recorded and are now available on CD and DVD. Click on the link for more details www.earlytorise.com/outpro/1013mention.htm

One guy that we invited – as gifted at making money as any of the above – wasn’t speaking. He was our special guest. We wanted him at our Bootcamp just so people could meet him and pick up some of his investing acumen.

I was fortunate to share lunch with him on Friday – and he offhandedly mentioned that he had made a few thousand dollars just before leaving his hotel room to meet me.

All it took was a three-minute phone call to his broker.

I thought you’d like to know how he did it.

The stock market had been down all week. It’s been much more down than up this year, especially recently. I naturally thought he was going to tell me that he made a bet on the stock market going down some more on Friday. But, no, he told me he made a bet on the stock market going up.

“Why up?” I asked. And he explained that when the market is down all week, it likes to rebound on Friday, even if the general price trend is down. The market usually doesn’t like to finish the week on a downward note.

He was right. The market went up. The option cost him some $200 plus change. He made about 15 times that back.

Should you do this? Should I? I’m tempted to do it the next time I see this week-long pattern. But it will only be with money I can afford to lose. After all, these aren’t government bonds. It sounds like a great bet, but it’s still a bet.