Options Can Buy You a Little Safety

Less enlightened investors typically associate options with tremendous risk in much the same way your mother might, for example, associate the drop-dead gorgeous redhead you bring home for Christmas dinner with the possibility that you'll never want to see your family again.

Given this site's family orientation, I'll leave the risk-reward analysis of the latter to Maxim, but not before trying to dispel the notion that conventional wisdom is typically wrong, whether it's applied to options or potential mates. If this has been historically true of options, it is even more true today. The market is primed for investors to use options for the most safe and stable of purposes: reducing risk.

Identifying the Trend

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