With inflation starting to soften as we enter Q4 of a midterm election year, it’s time to test an options strategy we call 1K21M . . . meaning $1,000 of investment growing to $1,000,000. With this strategy, one starts with the finish line in mind and works backwards. Sounds confusing? It is! The idea came to mind after watching the TV Series LOST. Nothing made any sense regarding how this plot could ever unfold. The only logical conclusion whatsoever was that the show was actually written backwards, starting with the ending and then fitting all of the puzzle pieces together; again, written in reverse chronological order.
For our 1K21M options strategy using this backwards approach, we’ll make some assumptions about where specific stocks or indices might be over the next 48 months and then, simply play long-term out-of-the-money stock options or LEAPs along a graph toward our end-point vision.
Cathie Wood and ARK-Invest does an excellent job of this with their research on future values of innovative companies such as ROKU and Tesla and why <<READ HERE>>
Follow along on this strategy journey as we’ll make updates to this post as things unfold.
RISK – Trading options may result in potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options markets. Do NOT trade with money you can’t afford to lose.
