Value Investing + Options = weird combi?
If you fall into the “value investing” category, you will probably consider yourself somewhat of a “conservative” investor, one who is patient and will only pull the trigger if the share price of a stock falls to a certain level that meets your criteria.
An options trader, on the other hand, is characterized as “aggressive”, one that engages in leverage, and that “tool” can well turn out to be a double-edged sword.
Most value investors would not consider options and options trading as part of their investing strategy. The words “options” and “value-investing” shouldn’t even be used in the same sentence. However, let me show you how options, when applied in a proper manner, is a tremendous “tool-kit” for a value investor.
Did you know that Warren Buffett, whom many recognized as one of the best value investing practitioners alive, is a huge player in the options market?