As we approach an era of economic uncertainty, many investors are becoming concerned about the value of their investments falling. This is where, if used carefully, options contracts can give investors the ability to safeguard their investment portfolios. In this week’s episode, Grant explains the pros and cons using options as portfolio insurance, as well as some major risks investors could face when using this investment strategy.

[02:19] Introduction – Grant discusses how Investing in options can be used to reduce portfolio risk for some investors.

[06:57] Put Option – Grant gives a comprehensive overview of put options and the benefits and risks of investing in them.

[17:10] ETF – Grant explains how having option contracts on ETFs can be advantageous.

[20:25] SPY – Grant describes SPY ETFs and provides a hypothetical scenario on utilizing option contracts.

[24:30] Call Option – Grant shares the pros and cons of call options.

[31:20] Combining Strategies – Grant describes an investment option in which you can create revenue by selling call options against positions that you already hold in your portfolio.

[34:22] Be Mindful -Grant stresses the importance of limiting risk, and why you should proceed with caution if you’re considering this investment option.

Resources:

Mentioned in the episode: Portfolio Insurance using Index Puts: theoptionsguide.com/portfolio-insurance-using-index-puts.aspx Stocks, Bonds, Options, Futures, and Portfolio Insurance: A Rose by Any Other Name: bostonfed.org/-/media/Documents/neer/neer495c.pdf Using Put Options To Protect A Portfolio Of Tech Stocks: investors.com/research/options/put-options-protect-portfolio-of-tech-stocks/

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Grant Bledsoe Financial Planner to Business Owners

I'm a financial planner to business owners, and the founder of Three Oaks Wealth. Our firm helps business owners align their business interests with their personal finances, often including the exit or sale of equity holdings.

I hold several professional credentials, including the CERTIFIED FINANCIAL PLANNER™, Chartered Financial Analyst, and Certified Exit Planning Advisor designations.