Talk About Portfolio Heat…Are Options Dangerous?

Is fire dangerous?

Fire can burn your house to the ground, save your life, protect you from predators, and help you sanitize water.

So is fire dangerous? It depends how, where, and when you use it.

Options are like fire, even though they have a reputation of a product used by reckless speculators. They also can either burn or save your portfolio…it all depends how you use them.

Constantly apply long spreads and other long gamma strategies to your portfolio, and options just might save your year when the unexpected happens. See Google chart above as an example of the potential benefit of some leverage and absolute risk control. Own the stock in the 750 range or own 720 calls or maybe a bull call spread.

Which is potentially more risky?

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