Pension Pot Potential- Article III in a Series

Why Options, What are, er, Other Options for Your Pension Pot?

It’s easy to find out from the internet about alternative investments. Forex, property, penny shares. Company start ups, IPOs. Bonds, commodities. I found the easiest to access – spread betting.They’d all like your pension pot. It has taken me, however, about 5 minutes to find a list of options brokers, here:https://www.theice.com/equity-derivatives/retail-brokers

The fact that this is not therefore easily found, speaks volumes, in my opinion. I found out about options by accident, in Exchange and Mart! BBC2 used to show option prices on teletext in the 90s. So, why so secretive? Is there something,therefore, that we should know?

Hidden Gems,Diamonds in the Rough.

What’s the difference between diamonds or rare metals and options? I cannot suddenly swamp the market with Russian options. Or have a major find, or cheap means of production. Risk, therefore, is unquantifiable. Options traders have the advantage. They are exchange traded, and therefore regulated.We calculate our risk,and size our trades without pressure.

Property, Buy To Let or Holiday Home

Massive entry costs,uncontrollable risk.One bad tenant…….UK law protects tenants. Foreign property? Foreign law might even deprive you of your investment.

Education, Suitability.

We are the greatest advocates of education, not obfuscation. Options are not simple. Options are not like anything else you will find. They are NOT for everyone. We get that. Your pension money deserves due diligence, however. If we told you you could buy shares at a 5-10% discount by the use of options, would you?A November  put for BP at 430 is 9.5 which you sell. This means you could be buying BP shares for 420.5 (current price 445). Should BP not get as low as<430,you keep your 9.5. Thus you have a profit of £95 on your required margin of £4,300, in 2 months. Do this 6 times a year if you like.