Stock options aren’t for everybody. A lot of amateur investors get burned trying to play the options game, and there’s a very good reason for this: they require a deep knowledge of strategy, of the win-loss ratio, and a strong understanding of what’s out there.

Lance Gaitan works for a financial publisher in Baltimore, where he authors two successful options strategies. His work helps individual and institutional investors capture gains by identifying overreactions in the market for both speculative and hedging purposes.

Today, Lance joins the show to talk about how to craft an options strategy, whether they belong in your portfolio, and if this is something you can do on your own – or if you’re going to need the help of a professional.

In this interview, you’ll learn:

• What an option is and what the two types of options contracts do.
• Who should actually be thinking about using options as part of their portfolio and who should stay away from them completely.
• How options can be used as part of a hedging strategy.
• How to look at the risks vs. potential rewards of options – and why one major loss can wipe out an entire year of wins in options trading.
• Effective ways to learn about options trading – and why there’s no way to be a passive participant in options trading and also win.