Stansberry Research: Capitalizing On Emotions and Market Volatility

Stansberry Research is an American publishing company that publishes a newsletter aimed at helping inform investors about potential investment opportunities. They have readers in over 100 countries and publish newsletters on both a monthly and bimonthly basis. The Corporation focuses on providing a diverse array of opinions by including analysis from many experienced sources. They focus on creating a long-term approach that will help to increase your overall net worth in a reliable and consistent manner.

Just recently Stansberry Research published an interview with an experienced investor on the topic of volatility and how you can use rapid changes in prices to create opportune investing times. For the last several years stock markets around the world have been increasing at a relatively consistent pace with very few downtimes. During the recent 2008 financial crisis, the volatility and stocks were near an all-time high with some stock values increasing by as much as 5% in a single day. This caused significant fear in most investors which further drove the fluctuations in price. Anytime that an asset declines in price investors become afraid of losing additional money. This also occurs when an asset increases in value as investors began to fear of missing out on an opportunity (https://www.stansberryresearch.com/). By taking advantage of put options and call options it is possible to use the emotions of investors to make profitable trades.

By purchasing put options and call options you are effectively purchasing a type of market insurance. By buying put options, you are able to protect yourself from a potential decline in the value of the stock stressed by Stansberry Research. If the value of a stock decreases in your holding several put options at the time, you can turn around and sell these and use a portion of the profits from these in order to purchase call options on the same stock. While it is possible to make money through simple, straightforward investments, it is possible to make even greater returns through the careful use of put and call options (Facebook). In this way, you were able to capitalize on the emotions of investors and generate significant profits as a result of the volatility experienced in the markets.

Leave a Reply