Table of Contents

Table of Contents

Introduction

1

You¡¯re On Your Way to Financial Independence

Chapter 1

2

The Moneymaking Power of Options

Chapter 2

5

Setting Up Your Options Account

Chapter 3

8

How to Trade Options

Chapter 4

12

How to Pick the Best Option for You, Every Time

Chapter 5

How to Lower Your Risk When Trading Options

Chapter 6

19

26

Options Trading Tips You Can¡¯t Get Anywhere Else

Chapter 7

Placing Your First Trade

33

Introduction:

You¡¯re on Your Way to Financial Independence

Dear Reader,

You¡¯ve just taken a huge step toward living a wealthy life.

Until now, you¡¯ve been settling for mediocre returns. You¡¯ve been watching your

portfolio grow 5%, 8%, maybe 10% a year if you¡¯re lucky. But that¡¯s not nearly what you

could be making.

And this is on top of giving away more money than you should to taxes, broker

charges, banking costs. It¡¯s death by a thousand fees. But it doesn¡¯t have to be that way.

When you know how to trade options, you open up the door to the simplest, fastest

way to grow your money.You don¡¯t have to put a lot at risk. You don¡¯t have to spend weeks learning how it all works.

And you don¡¯t have to wait long to see real returns on your money.

The best part: You are in control.

I¡¯m Tom Gentile. I¡¯ll be walking you through this options guide. I¡¯ve been teaching people how to trade

options for 30 years. I regularly share moneymaking tips with my readers at Power Profit Trades, my twice-weekly

publication that helps people build wealth with options.

Now I¡¯m going to give you the steps you need to be successful. I¡¯ll show you how to set yourself up for bigger

returns with just a few minutes a day, in the comfort of your own home, on your own time.

If you thought options weren¡¯t for you ¨C that¡¯s just not true. Anyone can trade options.

I was a Home Depot clerk, without a college degree, when I started trading options in my folks¡¯ basement. Now I have

the financial freedom to live the life I want. I own houses around the world, from sunny Florida to beautiful New Zealand.

By the time you finish this book, you¡¯ll be able to set yourself up to double your money, time and time again.

You¡¯ll have the power to build real wealth.

So let¡¯s get started.

To profitable investing,

Tom Gentile

1

Chapter 1:

The Moneymaking Power of Options

Welcome to the powerful world of options! This book will show you exactly how options work and how to

use them to turn stocks¡¯ small price moves into fast, money-doubling windfalls.

I¡¯m Tom Gentile, your guide through the options world for the next 38 pages. The strategies I¡¯ll show you

here are what helped me amass an ¡°options fortune,¡± and get the financial freedom I¡¯d been looking for. I¡¯ve been

sharing these tips with my readers for 30 years, and am excited to share them with you now. Let¡¯s get started.

What Options Are

Options are an unconventional form of trading that allow you to collect faster, larger profits at a fraction of

the cost of buying stocks.

An option is a contract that gives you the right to buy or sell a stock at a specific price. It lets you control

100 shares of a stock, but it costs significantly less than 100 actual shares.

Options contract prices can move a lot - and quickly. It¡¯s very common for the price of an option to move

50%, 100%, or much more in just days or weeks. That¡¯s what makes them so profitable.

Options can be used to hedge or protect the gains you have from stocks you already own. You can also think

of them as individual trading instruments that you can buy and sell for profit.

Why We Love Options

One of my favorite benefits to buying or selling options is how their prices tend to move more dramatically ¨C

and more quickly ¨C than the price of the underlying stock.

Look at these three examples from 2019:

? From March 4 to March 15, SBAC Communications Corp. (NASDAQ: SBAC) stock rose 4%. An option

on SBAC turned a profit of over 101% in that same period.

? From Jan. 16 to Jan. 24, Aspen Technology Inc. (NASDAQ: AZPN) shares jumped over 12%. An AZPN

option doubled in value in the same time.

? Between Feb. 27 and May 1, Leidos Holdings Inc. (NYSE: LDOS) stock climbed 14%, while an option on

it moved over 242%.

120%

120%

101%

100%

300%

100%

100%

80%

80%

200%

60%

60%

150%

40%

40%

100%

20%

0%

20%

4%

SBAC

SBAC Option

0%

50%

12%

AZPN

AZPN Option

242%

250%

0%

14%

LDOS

LDOS Option

2

Another benefit is that you can spend less on an options contract than on stock and collect a much bigger payout.

On April 26, 2018, Google¡¯s parent company, Alphabet Inc. (NASDAQ: GOOGL) closed at $1,043. Two weeks

later, it closed at $1,105.

Locking up over $1,000 for a $62 profit is completely unreasonable. But an options play on GOOGL cost $620 on

April 26 and ballooned to $1,936 by May 10. That¡¯s more than 20 times the profit at nearly half the cost.

$3K

$2.5K

Investment

Profit

$2K

$1.5K

$1K

$500

$0

GOOGL

GOOGL Option

How to Use Options to Make Money

When I¡¯m first introducing people to options, I tell them that buying an option is like renting a stock. You

don¡¯t actually own the stock, but because you own the right to buy or sell 100 shares of it, you can profit from it

as if you own it (except, usually your option profits are bigger than those you would get from owning the stock).

I often call options a ¡°stock substitute¡± for this reason. They¡¯re a very successful way to make money from

how much stocks move.

As I said earlier, there are two ways to use options. One is as a hedge to protect your portfolio.

Options as Portfolio Insurance

As an example, let¡¯s say you already own 100 shares of Advanced Micro Devices Inc. (NYSE: AMD) stock,

which you bought for $3,000 ($30 per share). You still believe in the strength of the company, but you worry

there¡¯s a small chance a market crash could drag the stock down in the next year.

You don¡¯t want to be stuck holding 100 shares worth less than what you paid for them. You want some

¡°insurance¡± that would let you sell your stock for what you paid for it, just in case something drastic happens in

the market and you need to sell the stock.

In this case, you could buy the option to sell AMD stock for $30, which costs around $4.80 per share, or $480

for 100 shares.

If AMD stock does indeed drop 33% to $20, your $3,000 investment would be worth $2,000.

But with options, you can exercise your right to sell AMD for $30 a share. You could then collect $3,000 for

shares that would only sell for $2,000 at market price. Your only loss would be the cost of the premium for your

¡°insurance,¡± $480, compared to the $1,000 drop in the value of your shares.

In other words, your options contract allowed you to cut your losses in half.

This is how options can be used as ¡°portfolio insurance.¡±

3

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