Many investors never consider using options, instead relying on stocks, mutual funds, and exchange-traded funds for their investing. Yet adding options strategies to your portfolio can have a positive impact on your overall investing success. Since 2009, the Motley Fool Options service has delivered winning options-investing ideas to its subscribers, and in that time, Motley Fool Options advisors Jim Gillies and Jeff Fischer have delivered picks that have resulted in a profit in nine out of 10 positions that they have closed. Below, we'll show you how you can get access to this award-winning service at a discounted price. But first, let's take a closer look at the secret behind Options' exceptional returns and how the service hopes to keep coming up with winning picks.
Add the power of options to your portfolio
Every month, Motley Fool Options gives its subscribers about four options ideas that its analysts believe offer the potential to generate positive returns over time. The service believes that investors can use options for a variety of useful purposes, including generating income, protecting profits, hedging their stock portfolios, and taking positions in stocks at better prices than they could achieve without using options. Options looks first for stocks that have strong long-term fundamental business prospects and then crafts an appropriate options strategy to take advantage of each stock's unique opportunities.
One key aspect of Motley Fool Options' philosophy is that the service takes a long-term perspective, even when its advisors choose to use short-term strategies with particular picks. What sets Options apart from many of its peers is that it often seeks out more complex options strategies that can take several years to play out and can evolve over time as changing conditions warrant.
The secret of Options' success
In particular, Motley Fool Options uses a wide variety of specific options strategies that it tailors to each individual pick. The service more often chooses strategies that involve writing options, receiving payments from option premiums on day one and potentially boosting a portfolio's production of income. Yet it also looks to take advantage of the unlimited upside potential of buying options, sometimes selecting strategies that can involve writing one option and buying another in order to get the best of both worlds.
One of the most successful picks that the Options team made involved a position in social-media giant Facebook (NASDAQ: FB). Back in mid-2014, Facebook had seen its stock finally bounce higher from its initial post-IPO plunge, and lead advisor Jeff Fischer believed that buying long-term call options expiring in early 2016 was the best way to profit from Facebook's anticipated future success. Rather than buying Facebook stock outright, Options spent $2,965 for options to buy 100 shares of Facebook at $40 per share. By the time the options expired in January, Facebook shares had climbed by more than 40%, but the position that Options opened had produced almost double that return, producing an 88% profit.
More often, Motley Fool Options has made successful picks by selling options that have gone unexercised. For instance, on four different occasions, writing put options on blue-chip tech giant Intel (NASDAQ: INTC) eventually led to closing out the position without any further cost. That allowed members to keep 100% of the option premium they had received when they entered the strategy.
How you can use Options to make winning moves
For new investors, Motley Fool Options makes things easy. Once you subscribe, you'll get immediate access to our list of options trades you can make right away. You'll find some recommendations that are specifically called out as being beginner-friendly for those who are new to options strategies. You'll also start getting weekly input from the Options team keeping you up to date on the stocks on which you have options positions and new trade recommendations.
Many investors who want an edge over investing solely in stocks and funds have found that options strategies can give them a real advantage. But it's important not to wait to get the benefits of adding options to your portfolio. Click here to join the Motley Fool Options community today and get the guidance you need to unearth options strategies that can add to your total returns.
The Motley Fool owns shares of and recommends Facebook. The Motley Fool recommends Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.