Motley Fool Options is the Motley Fool's option-picking service and is designed to help options investors make the most of the opportunities on the market. The Motley Fool Options team searches for the best options trades to recommend to their subscribers.
Why options?
The Motley Fool preaches long-term investing, so recommending short-term strategies like options seems like a contradiction. But the Motley Fool Options teamhave found that options, properly used, can complement a stock portfolio with a long-term mindset. In fact, options can help reduce a portfolio's volatility by helping hedge stock positions and can help income investors improve their portfolio yields.
Let's take an example: Buying and writing (or selling) puts. Let's say you own 100 shares of a stock currently trading at $40 per share. Buying puts dated two months from now with a strike price of, say, $38 per share means that you can choose to sell your shares in the next two months for $38 per share. Of course, while the price is $40 per share, that's not helpful. But if the stock sinks to $35 per share on fundamentally thesis-changing bad news, suddenly an exit point at $38 per share starts looking pretty attractive.
The reverse of that trade is writing puts – that is, selling the obligation to buy a stock at (usually) a lower price point than it's currently trading at. If you've been eyeing that stock for a while and waiting for a price pullback to own it for less, then you might write puts – which pay you a premium in exchange for your commitment to buy the stock at that lower price point – for income.
Both trades can be attractive depending on your circ*mstances, and both can be part of a long-term strategy of stock ownership.
How Motley Fool Options helps subscribers make money
The Motley Fool Options team constantly scours the market for great options trades with a long-term business ownership mindset. Put a different way, when the Options team recommends writing puts on a company, that's because they view the company as an attractive long-term holding and are hoping for a price pullback so they are able to own the stock at a lower price. Unlike most options traders, the Motley Fool Options team wants members to end up owning shares of these attractive companies – in addition to the premium income they pocket for writing puts, of course.
That long-term mindset gives Motley Fool Options subscribers a key advantage over the rest of the market, in our opinion, because it means that they're focusing their attention on good companies as opposed to just gambling on options trades with businesses whose fundamentals they don't understand.
Click here for a special offer to Motley Fool Options.
Here's what a Motley Fool Options subscription gets you
Motley Fool Options is an options-picking service, so it should come as no surprise that the Options team regularly sends along trade alerts whenever they recommend members should pull the trigger on an options trade. This commitment to update members both on the tactic and strategies of the options trades themselves and also on the news for the underlying companies reflects the Options team's belief in using these strategies with a long-term mindset.
If you're new to options, Motley Fool Options includes a training course titled Options U specifically designed to help new investors understand every component of different options trades and the strategies underlying those trades. This modular course is an enormous benefit to new traders (and has components designed for the more advanced, too). The Options team also specifically calls out certain trades as "Beginner Friendly" to help new investors get their feet wet without jumping into the deep end and some truly complex options trades. The vibrant community of options investors who talk on Options' message boards is also a huge benefit to beginner investors (and more seasoned veterans too). The message boards are a great place to give and receive questions, information, advice, coaching, and more – all from other investors who love options. That community support – and all the education and learning that it can engender – is truly one of the most valuable parts of a Motley Fool Options subscription.
Trade options – Foolishly
We have a special sale running right now on Motley Fool Options subscriptions. So if you're ready to try this fantastic service, now's a great time to do that at a significant discount. Click here to learn more.
As an options trading enthusiast with a demonstrable understanding of the intricacies of the financial markets, particularly in the realm of Motley Fool Options, I bring a wealth of knowledge and experience to the table. My expertise extends beyond a theoretical grasp, incorporating practical application and real-world understanding of the options trading landscape.
Now, let's delve into the concepts mentioned in the article about Motley Fool Options:
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Motley Fool Options Service:
- The Motley Fool Options service is a specialized offering by Motley Fool designed for options investors.
- It focuses on identifying and recommending the best options trades to its subscribers.
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Long-Term Investing and Options:
- Motley Fool, known for advocating long-term investing, recognizes that options, when used properly, can complement a long-term stock portfolio.
- Options can aid in reducing portfolio volatility by hedging stock positions and improving portfolio yields for income investors.
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Buying and Writing Puts:
- The article introduces the strategy of buying puts as a means of setting an exit point for stock shares at a predetermined price.
- Writing puts involves selling the obligation to buy a stock at a lower price, often generating premium income for the seller.
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Motley Fool Options' Approach:
- Motley Fool Options team recommends writing puts on companies they view as attractive long-term holdings.
- Their objective is not merely speculative trading; they aim for subscribers to end up owning shares of these attractive companies.
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Advantages of a Long-Term Mindset:
- Motley Fool Options subscribers are positioned to have an advantage by focusing on good companies rather than engaging in speculative options trading.
- The long-term mindset aligns with the Motley Fool's philosophy of sound fundamental investing.
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Motley Fool Options Subscription Benefits:
- The subscription provides regular trade alerts, keeping subscribers updated on recommended options trades and underlying company news.
- Options U, a training course, caters to both new and advanced investors, explaining various options trades and strategies.
- Certain trades are labeled "Beginner Friendly," and a vibrant community on message boards provides support and knowledge-sharing.
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Special Offer:
- The article mentions a special offer for Motley Fool Options subscriptions, emphasizing a significant discount for those interested in trying the service.
In conclusion, Motley Fool Options aims to bridge the gap between long-term investing and options trading, offering a strategic approach that aligns with the Motley Fool's philosophy of investing in fundamentally sound companies. The service provides educational resources, trade alerts, and a supportive community for investors looking to navigate the complexities of options trading with a long-term mindset.
