Its easy to become despondent when every stock is falling. Even seemingly well priced shares can be forced lower and lower, and this price behaviour can cause you to second guess your investment approach. However, it is times like this that often present the best opportunities; as the old adage goes, “the best time to buy is when there is blood in the streets”.
At times like this even very attractive stocks get sold down and as a result, great opportunities arise.
The other advantage of trading an investing in volatile periods is that options prices increase. This means that investment strategies using options tend to look extremely attractive.
In my latest Thursday members webcast I covered the Buy-Write strategy, which is a strategy that can be used as an alternative to simply buying stock. The strategy allows us to buy the stock and receive additional premium for selling a call option against the stock.
This investment will profit if the share price rises, but our loss will be reduced if the share price falls.
Watch the video below to see which stock I think is a great opportunity in the current market, as well as an example of how you can invest in the stock using the Buy-Write strategy.
If you’d like to learn more about the Buy-Write and similar strategies, we can an online course covering them. You can view more information by clicking here.
