The Greatest Career

The call for good paying home based careers is greater now than ever, and that call is increasing all the time. 

With economic uncertainty; layoffs, changing technologies or life circumstances, having a second or even third stream of income makes more sense than ever.  Gone forever the days when a worker was hired on to a company and expect to remain at the company or even industry for their career. 

Since the 1990's staying in the same industry at all is a luxury that fewer and fewer ever know. There are many opportunities being advertised, from stuffing envelopes to selling cars.

Certainly most of these jobs are not right for everyone, or even profitable!
 
During the recovery period following an accident that caused me to put my former career behind me, I started a wish list.  This list was made up of all the benefits my new business would have and the drawbacks it would not have.

1.     Unlimited profit potential

2.     Fast start-up

3.     No employees

4.     No insurance costs

5.     No selling to friends, family, or anybody

6.     No billing or accounts receivable

7.     No shipping or handling of products

8.     No advertising

9.     No office to maintain

10.  The ability to work anywhere

11.  The ability to take time off as desired

12.  Little time required

13.  Small start up cost

14.  FREEDOM!

As I mentioned last time, trading the stock market was the only choice for me.  It may be for you as well...

Leveraging your Money

One of the bullet points on my list was 'Small start-up cost."  At the time I transitioned into becoming a professional trader, money was tight.  With all the medical bills, living expenses, and cost of getting out from under my former business, there wasn't much left.  Yet, I still needed enough income to support my family of eight - and quick!
The answer was in a little-known market instrument called OPTIONS. 

Small but Mighty

Options are contracts that give the holder certain "rights". These rights have the primary effect of controlling a block of associated stock. For a small amount of money you can control stock that is worth many times your cost. When the cost of the associated stock moves, the value of the option also moved but in a magnified way. Here is an example.

XYZ Stock
Cost per share: $100
1000 shares = $100,000.00

XYZ Call Option
Cost per share: $5.00
10 Contracts control 1000 shares of stock = $5,000.00

To purchase 1000 shares of XYZ stock at $100 per share would cost $100,000.00.  That's a big number.  One that few individual investors could handle.  But you could harness the power of $100,000.00 worth of stock with a small fraction of that price by getting 10 option contracts.  The cost would be just $5,000.00.  And by the way, you can buy one single contract if you choose.  The cost would then be just $500. 

How Leveraging Works for You

Here is where it gets exciting. If XYZ stock goes up $1, the person who invested $100,000.00 for 1,000 shares has made $1,000. Not bad, but it took a whole lot of money to pull it off.
Now, if at the same time someone bought those 1,000 shares of XYZ, you bought 10 contracts of an associated option you could have also made $1,000.
Let's put that in perspective...

XYZ Shares at $100.00 increase by $1
Profit = $1000, or 1%

XYZ Option Contracts increase by $1
Profit = $1000, or 20%

What if the options we were looking at only went up by $0.50 instead of $1?  You would still have made $500, or 10% on your money at the same time the stock buyer only made 1%!  That's the leveraging power of options!