Buffett A Trader? We Have Evidence…
It’s known as “Woodstock for Capitalists.”
And for many of the 40,000 in attendance, Berkshire Hathaway’s annual conference just over one week ago was a once in a lifetime trip.
A chance to see the greatest investor of all time up close: Warren Buffett.
For the past few years, every word Buffett says at this meeting has been dissected by the press on multiple live feeds across the web.
At this point, it’s hard to imagine Buffett doing anything publicly that isn’t covered in the press moments later.
But there’s something you probably don’t know about the Oracle of Omaha.
He trades options.
That’s right. The man who made super-safe “value investing” popular trades options. And no small amount, either.
Over the last decade, Buffett racked up $4.9 billion trading options. He’s done it by relying on the same no-nonsense, conservative approach that has made him a legend in the stock market.
Because he realizes something most investors don’t: trading options does not have to be risky if you stick to a few conservative strategies.
Inside Buffett’s Super-Safe Options Strategy
You may be familiar with the legendary Buffett investing rule: “Rule No. 1: Never lose money. Rule No. 2: Don’t forget rule No. 1.”
That’s why he doesn’t buy options. Instead, he sells them.
You see, studies show that options buyers lose money on 7 of every 10 trades they make. That’s because they’re mostly speculators. They place high-risk trades hoping for a big payout, and that’s why they strike out 7 times out of 10.
But when you sell options, you put the odds in your favor. Because every time the buyers strike out, you keep the money. That makes selling options about the closest you can get to never losing money when investing.
Here’s how it works:
When you sell an options contract, you’re selling the right to buy a particular stock at a particular price, which is called the strike price.
Say you’re selling contracts of Microsoft, and the stock is sitting at around $45. A buyer might pay you $100 per contract for the right to sell, or “put,” the stock to you if the price falls below $40 a share (about an 11% drop).
If you sell 10 contracts, the buyer deposits $1,000 in your account, and you have access to that cash immediately. If the stock never falls to $40 a share, you simply keep the buyer’s money. You’re $1,000 richer without investing a dime.
In the last few years, our Options for Income service has recommended its subscribers sell puts on stocks like Crown Holdings, Molson Coors Brewing, Berkshire Hathaway Class B, Apple and Casey’s General Stores.
If you’d followed those 5 recommendations, you would have pulled in a total profit of $33,500—just by selling 10 contracts on those 5 trades. And because the stocks never dropped below the strike price, you wouldn’t have to pay one dime out of your brokerage account.
Now even though investing this way is very safe, it still makes some people a bit nervous.
That’s because if the stock happens to fall below your strike price, you could end up having to buy it at that price. That’s why lead analyst Jim Fink only recommends options trades on stocks that are good investments—companies he thinks any investor would love to own at a discount.
So even though he doesn’t expect to ever have to buy a stock when he sells puts, he invests as if he might.
But there’s also a simple way to make sure you never end up having to buy a stock at all. It makes options trading even safer than how Warren Buffett does it.
Profit From the “Spread”
Instead of only selling a put contract, you trade a credit spread instead. With a credit spread, you sell one put contract and buy another put contract at a lower price.
You pocket the difference between the two contracts. And that money is deposited in your brokerage account almost immediately. So just like with put selling, you get paid to trade.
But the advantage is that when you trade a spread, you never have to buy a stock if your option trade goes against you. But the chances of that happening are minimal, because you profit on these trades on practically every move the underlying stock makes—up, down or sideways.
The tradeoff is that your gains are lower than if you only sold puts. But there is less risk. And you can still easily make returns like 36%, 49% and even 71% in just a few months.
In fact, those are the real-life gains Fink made on put credit spread trades on Procter & Gamble, Praxair and Dick’s Sporting Goods last year.
Now we want to show you…
How to Unlock the Power of Options Now
We don’t have room to give you all the nuts and bolts of Jim’s options-trading strategies here. That’s why we’ve asked Jim and his team to put all the details together in a new special report.
This just-published guide takes you inside five of the most popular options-trading strategies. It’s everything you need to start collecting steady cash payouts every month using options.
It’s yours free when you take a no-risk 90-day trial to Options for Income. This no-obligation “road test” gives you everything the service has to offer, including fresh trade recommendations every Thursday, Jim’s personal answers to all your questions and much more.
But you must respond now! We’ll be closing down the current registration window for Options for Income later this week. Don’t be left out.
Get your free report and reserve your spot now!
Editor’s Note: The best news? You don’t have to be a billionaire like Warren Buffett to successfully trade options: these are the exact same strategies Fink used to build his own personal fortune, turning $50,000 (much more than he needed, actually) into $5.3 million.
Best of all, Fink is available every trading day to personally answer your questions and walk you through each trade step-by-step. That’s why we’re forced to limit the number of subscribers we take on today.
Simply follow this link to get started. You’ll be so glad you did