Bryan Perry

Get Paid to Trade Options

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Let's face it: It's not our parents' economy, and the ways they made their money isn't likely to work in this environment.

The good news is that it isn't our parents' market, either. Gone are the days of simply buying and selling stocks … that is, if you had enough capital left over from the extraordinary fees that brokers charged simply for the privilege of working with them.

With the arrival of more trading exchanges, armies of brokers competing for your business and the explosion of the derivatives markets (i.e., commodities, options, single-stock futures) during the past few decades, it's exciting to wonder what new ways of making money our children and grandchildren will be using.

In the meantime, we've got plenty of strategies to tap into, to turbo-charge our portfolios today.

TO MAKE LONG-TERM GAINS, THINK LIKE A SHORT-TERM TRADER

When the markets are non-directional (i.e., up one day, down the next, with no clear pattern or predominant bullish or bearish bias), some folks cash out their holdings and wait for an "all-clear" signal when the market starts trending higher on a more-regular basis. Others leave their money in the same securities they liked before the craziness started and hope that things don't get too much worse before they get better.

You may trade options for a variety of reasons -- the potential profits you can make on a relatively modest investment, the rush that comes with cashing in a winning trade, or the ability to keep some skin in the game while you wait for a better opportunity to tend to your long-side portfolio.

We all know that you can make money -- oftentimes pretty quickly -- by trading options, whether stocks or the market itself are going up or down.

But using options as a speculative tool is only one way to pad your portfolio with "extra" profits. There are other strategies out there -- using both options and something called "hybrid options" to help investors to use their existing stocks to generate income.