The Options Millionaire Episode 41 Can You Use Options In Passive Investing?
Mar 4, 2025
They explore using long-dated options as long-term tools inside buy-and-hold portfolios. Strategies covered include LEAPs as crash insurance and selling covered calls for income. They compare index vs single-stock risks and contrast active tweaks with truly low-maintenance passive approaches. Trading cadence and ways to fund further investments with option premiums are discussed.
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Passive Investing Defined And Its Main Risk
- Passive investing aims to build long-term wealth by holding diversified assets and letting the market provide returns.
- Large losses, not small annual gains, determine long-term wealth because big drawdowns need big gains to recover.
Dividend Aristocrat Didn’t Protect From Cuts
- Peter invested in an aristocrat dividend stock and actively monitored quarterly reports and investor meetings.
- The company later cut its dividend in half and the stock plunged, showing dividends aren't risk-free.
Use LEAPs To Insure And Generate Income
- Use LEAPs (long-dated options) as insurance on holdings and sell covered calls to generate income.
- Keep LEAPs to protect against catastrophic loss while collecting option premium as a dividend substitute.