January 20, 2025
How (and Why) I Use Options to Maximize My Wealth
We've all heard the statistic: a surprisingly small number of people know what's in their investment portfolio. But an even smaller percentage understands how to leverage options to maximize their wealth.
But an even smaller, almost imperceptible percentage understands how to leverage options to maximize their wealth.
When buying or selling stocks, you only have two choices: going long (expecting the price to go up) or going short (expecting the price to go down).
This is a binary world. You're right or you're wrong.
But with options, you have many more, well … options. (Excuse the pun).
You can profit if the market moves up, down, or sideways. You can generate income, lock in gains, and protect against losses — all with defined risk.
Buying stocks is like baking a Pillsbury pastry from a box. You follow the instructions to get a decent (albeit unremarkable) result.
Options trading is like having a fully stocked pantry, Mauviel cookware, and the freedom to make whatever you want.
You can whip up something quick and simple, or layer flavors for a more elaborate spread.
And the best part is: You don't have to be a world-class chef to create a delicious meal that fits your taste, budget, and occasion.
When it comes to your finances, your future, and your dreams…
Do you want to be limited to one recipe?
Or have the flexibility to create the ideal portfolio for any market environment?
As Warren Buffett famously once said, "Rule #1: Never lose money. Rule #2: Never forget Rule No. 1."
Options trading allows you to respect Rule #1 while significantly amplifying your gains.
Let me show you how…
The Unmatched Power of Options Leverage
Let me show you just how much using options can amplify your returns.
Scenario 1: Holding Shares
The year is 2023. You buy 100 shares of Apple Inc. (NASDAQ: AAPL) at $150/share.
Total investment: $15,000
One year later, Apple's stock price has risen by 20% to $180/share.
Your 100 shares are now worth $18,000
Your gain: $3,000
Your return on initial investment: 20%
Scenario 2: Holding 1-Year LEAP Options
Instead of buying shares, you buy a 1-year call LEAP option with a $150 strike. (You think the stock will go up, but don't know how much.)
Let's assume this LEAP contract costs $15.00 ($1,500 up front).
To approximate the exposure of 100 shares, you buy 1 LEAP contract.
Total investment: $1,500 (significantly less capital tied up than the $15,000 of shares)
One year later, Apple's stock price has risen by 20% to $180/share.
Your $150 strike call option is now deep in-the-money (ITM).
The intrinsic value of your option is: Current Stock Price – Strike Price = $180 – $150 = $30.00 per share.
At expiration, assuming the option is trading at its intrinsic value, your contract is worth: $30.00/share.
Your gain: $1,500
Your return on initial investment: 100%
The Result
Holding Shares: $15,000 risk for $3,000 gain (20% return)
Holding LEAP Options: $1,500 risk for $1,500 gain (100% return)
You get a dramatically higher return with a fraction of the upfront risk.
But there's another aspect of options trading that's even more important than higher returns.
Control.
Unlike the "long or short" limitations of stock trading, options allow you to design whatever flavor of trade your heart desires:
Bullish but cautious? Use a call spread (buying a call, and then selling a call at a higher strike to reduce your premium).
Predicting a big swing but unsure of direction? Try a straddle (buying a call and a put of the same strike simultaneously).
Expecting the stock to move less than the options suggest? Open an iron condor (selling a put spread and a call spread around the current price to collect premium from both sides).
Want to protect downside without the immense risk of shorting shares? Buy puts.
Up, down, sideways. That's the beauty of options — you can trade any move, any way you want.
The Upside of Downside
Options also offer another crucial benefit: portfolio protection.
Remember how volatile the market was during March 2020, all of 2022, and March/April 2025?
Most investors watched helplessly as their portfolios shed substantial value, day after day, powerless to stop the bleeding.
But options traders had a powerful antidote during these periods: puts.
In February 2025, as many of my indicators began flashing bright red warning signs, I bought put contracts on the SPX index.
Sure enough, the index subsequently dropped 20% in two months.
As the market plunged, the value of my put options soared, significantly offsetting any losses in my long-term portfolio.
Disciplined options traders break even or even make gains during these downturns.
Meanwhile, the options-illiterate were trapped, forced to watch their portfolio dump with no recourse.
It's the difference between being subject to the whims of market volatility vs. being in complete and utter control of your finances.
Think of Nehemiah 4:16.
When he rebuilt the walls of Jerusalem, he didn't just charge forward with bricks and blind faith.
He surveyed the damage. He counted the cost. He assigned roles. And, most crucially, he told the people to build with one hand while keeping a sword in the other.
That's options trading.
Most investors only do the "building." They pour money into index funds, set it, forget it, and hope the wall doesn't fall when the storm comes.
But options traders brandish the sword. We build wealth with one hand while fiercely defending it with the other.
Options are your secret weapons in finance. Your long-term holdings are the structure beneath.
Together, they make you unstoppable.
The Catch
Now, for the catch: timing.
When you buy stocks, you can hold them forever, riding out market fluctuations for years, patiently waiting for your investment to eventually hit your price target.
Options, however, come with an expiration date.
To profit from your call option, the stock doesn't just need to move up — it needs to do so within a defined period.
If the stock doesn't reach $120 by the contract's expiration date, your option will be worthless, and you'll lose your initial $500 investment.
Expiration dates introduce a layer of complexity and risk that stocks don't have.
This is why so many non-professional investors ignore options entirely. They think they're too complicated or risky.
But this fear stems from a lack of understanding. While timing is tricky, it's not impossible to learn.
In future lessons, I'll show you how to perfect your timing by leveraging:
Seasonality: Understanding historical patterns of how certain stocks or sectors perform at different times of the year.
Risk Zones: Pinpointing specific price levels where a stock is likely to make a meaningful move, offering optimal entry and exit points.
Technical Indicators: Utilizing proven charting tools and metrics to anticipate future price movements.
These tools transform options trading from a speculative gamble into a priceless skill.
They empower you to generate income, amplify your returns, and protect your hard-earned gains.
Stop being a passive onlooker.
Start being the strategic manager of your financial future.
Be good to yourself (and be good to others),
Ben Sturgill