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March 21, 2018 - Health Ranger - Mike Adams
12:27
How to use options to REDUCE your inestment risk
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All right, now that everybody has finally come to realize that the stock market bubble is going to burst, which, of course, I warned everybody about for a very long time over and over again.
And now it's coming true.
Markets are really starting to implode.
China's market as well and the U.S. stock market.
And by the way, these are just the early jitters.
The stuff is really going to hit the fan soon.
Well, maybe soon.
We don't know exactly when.
We don't know how much rescuing the plunge protection team can pull off.
We know they've been propping up the market for a very long time using artificial means, using fiat currency money printing, using market manipulation and financial fraud.
We know that.
I mean, that's been going on since at least 2008 and actually long beyond that.
However, We also know they can't keep it up forever.
We just don't know how long we have until the system starts to crash.
So if you, a prudent investor, you've got retirement funds, let's say you've got money in the market, you own stocks, you own mutual funds, you own maybe index funds, who knows?
I have a question for you, because you're probably way above average intelligence, given the fact that you listen to the Health Ranger report.
So I have a question for you.
Why do you have yourself totally exposed naked with owning these stocks where you have 100% exposure to the downside of the crash?
Why are you holding stocks in a naked position when you could be very easily shoring up the gains you've already made by, well, a lot of things.
You could be purchasing insurance on the gains you've already made by purchasing out-of-the-money put options, for example, on the stocks you already own.
This is the topic to discuss here.
By the way, I'm not a financial advisor.
I can't tell you what to do.
You need to talk to someone who knows what they're doing or figure it out for yourself.
But here's the thing.
A lot of people are just sitting on stocks with total exposure to the downside.
So they're going to lose...
Every dollar the stock goes down, they're going to lose a dollar.
And this is the way 99% of people invest, because they have no idea that options can be used to decrease their risk on stocks they already own.
Now, you know, the disinformation in the financial markets is just astonishing.
It's just like the disinformation that's in healthcare and pharmaceuticals and government, finance and everything else.
Most people have been fraudulently told that options are risky.
That's ridiculous.
Options are only risky if you use them in a high-risk format.
Options can actually decrease your risk substantially, and they can make your investments more conservative rather than more risky.
And if you think about it, why were option markets created in the first place?
To reduce risk for people like farmers who know they're going to produce, let's say, 10,000 bushels of soybeans, or a million, next year.
But they don't know about the price variability in soybeans between now and next year.
So by purchasing the correct combination of options, puts or calls, longs and shorts of the puts and calls, they can effectively spend a little money to ensure the price that they're going to get from the soybeans that they're planting today but won't be harvested until next year.
So by using options on crops that they're growing, farmers are able to reduce their risk, reduce their volatility of return, and then effectively engage in more certain financial planning for the future, knowing in advance that they're going to get X number of dollars per bushel of soybeans that they produce, almost regardless of the market price that actually exists at the time.
So when options are used in conjunction with things that you're producing or with other assets that you already hold such as stocks, options can be used to dramatically decrease risk rather than increasing risk.
And this is why I'm always shocked when I run into people who own a bunch of stocks and they have no options in place to ensure the gains that they've already made on those stocks.
Now, if you have a stock broker or a financial analyst or an investment analyst...
That person might be great, but I got to tell you, from my experience and opinion, probably 95% of so-called financial analysts and investment brokers are totally clueless and completely full of BS.
They have no idea what they're doing.
All they have is a buy and hold type of attitude.
They think diversity means holding different stocks all on the long side of the stocks with total exposure on the downside.
They have no idea what is real risk.
They're not old enough to even know about, to have experience a stock market crash or They don't understand the risk of having all your assets in the same currency denomination, such as the dollar, or the same economy, such as the U.S. economy, and so on and so forth.
These people, I know there are exceptions.
There are some brilliant, brilliant people out there.
They're rare.
I have great admiration for those exceptions, but most of the financial advice makers out there are complete idiots, which is why they lose money for most of the people whose money they're managing.
And most of these people do not understand how options work.
They don't even, they have no clue.
Like, what does it mean to sell a call out of the money with a strike price that's $10 away from the current?
They have no idea.
They're just totally freaking clueless.
It's just too much math for these people.
And you know, I thrive on math.
I've always been really good at math.
And since I run a science lab, I'm always doing a lot of math in the lab.
I'm doing unit conversion.
I'm doing concentrations, parts per billion.
I'm having to do a lot of calculations in my head to make external standards of certain target parts per billion concentrations of lead or what have you.
And to me, when I look at the stock market and I look at options and I look at finances, it's just another laboratory experiment.
It all makes instant sense to me.
So I'm telling you, time to investigate how you can reduce your risk of catastrophic loss for the stocks you already own.
So please hear me on this point.
If you're a fan of mine or you're a reader of natural news or you follow my work, I do not want you to get hurt by the coming global crash.
I want you to minimize your losses by getting very, very conservative right now with any gains that you may have already made in the market.
You can lock those gains in Maybe you've had a 40% gain on some of your big stocks that you own out there.
You can lock in that 40% gain by paying sometimes as little as a 1% premium on the purchase of, for example, an out-of-the-money put option with a lower strike price than the current stock price that can make sure you never lose more than X number of dollars even if the market totally collapses.
And again, I'm not your financial advisor.
I can't tell you what decisions to make.
But I can urge you to look into this, get people who know what they're talking about, who understand how to use options to minimize your exposure on the downside in a market that many people believe is about to suffer a catastrophic who understand how to use options to minimize your exposure on There is no reason that you have to lose the gains that you've already achieved.
No reason.
You can pay a little bit of insurance money now and you can lock those gains in.
So, and this is not speculation, by the way.
Using them in this way is not speculation.
Just remember that every options contract represents 100 shares of the underlying stock.
So, you know, if you own 1,000 shares of, let's say, IBM and you use this kind of strategy, it would involve, let's say, low-cost put options out of the money, only 10 contracts because each contract represents 100 shares.
So, Make sure you're doing the math correctly.
Again, work with a qualified expert who knows what they're doing and can help you minimize your risk.
This is what I'm talking about.
Don't be an option idiot who's out there thinking it's just some giant lottery and throwing money at the wind and hoping they strike it rich and make it big and win the lottery and get some big massive payoff and naked puts and naked calls and naked everything.
No, I'm not talking about that.
I'm talking about using financial instruments in your favor to reduce your risk in a time of tremendous downside, catastrophic loss potential.
Now, maybe if you disagree with my assessment on that, and of course, you're welcome to.
In every stock market, every side of the trade, two people have a different opinion.
And that's wonderful.
That's called diversity.
But if you disagree with me, And you think the market's going to go up forever, then you can still use the strategy I'm talking about to reduce your risk on the downside.
To lock in your profits.
So look at Chipotle has suffered a massive loss because, of course, the corporate sabotage, the E. coli being released onto that company's products and sickening people.
It's all corporate sabotage by the biotech industry.
But that's a company with a great future, and yet they've suffered a very sharp and unexpected loss.
I think 27% or something from their high.
Just this year, because of the E. coli and the bad press, well, what if you own Chipotle stock and you're bearish on it?
I'm sorry, you're bullish on it.
You think it's going to do well in the long haul, but you still recognize there's some downside risk, sudden unexpected events that could happen.
You can protect yourself using correctly structured conservative put options on stocks that you already own.
I mean, if you want to go really conservative, you can even buy or sell, put spreads or call spreads or what have you.
You just got to work with somebody who knows what they're doing and can do the math and analyze your situation.
You just tell them, look, I want to minimize my risk and lock in my profits as much as possible so that when the stock market tanks, that I'm not going to lose 50% of the value in my account.
So I just want to encourage you, be smart about this.
Thanks for listening.
I hope you find this valuable.
Again, my disclaimer is, I'm not your financial advisor.
Do your own homework and investigations and work with a qualified person who can hold your hands on this.
If you don't recognize the things I'm talking about here, make sure you work with somebody who does know what they're doing.
Otherwise, you're just going to lose a lot of money using option strategies.
If structured correctly, they can minimize risk and protect your gains.
Thanks for listening.
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