I get it.
You hear “options” and immediately think of day traders gambling away their life savings.
And you're correct, because that is how most people use them.
But what if I told you that some of the most conservative institutions in the world use options to reduce risk, not increase it?
Like the Ontario Teachers’ Pension Plan which manages $302 billion in retirement funds...
And Yale University’s endowment which oversees $44 billion...
These aren’t gambling operations… they are conservative institutions that can’t afford to lose money.
And they all use long-term options as essential portfolio management tools.
Let’s say you want to invest in Apple.
Traditional approach: Buy 100 shares at $335 = $33,500 invested
LEAPS approach: Buy 1 call option contract = $6,000 invested
Both give you exposure to 100 shares of Apple.
But with the LEAP, you’re risking just 20% of the capital for 80% of the upside.
So which approach is actually more conservative?
Or you could think of it this way...
When you buy a stock, your maximum loss is 100% of your investment.
Apple could theoretically go to zero, and you’d lose all $33,500.
When you buy a LEAPS option, your maximum loss is the premium you paid.
In this case, just $6,000.
Here’s how conservative investors should think about LEAPS... especially with market conditions the way they currently are…
Instead of putting $100,000 into stocks, you could...
Put $40,000 into LEAPS on those same stocks and keep the remaining $60,000 in T-bills, money market funds or a bond ETF
So you get the same growth exposure with 60% of your capital in safe assets.
That’s smart risk management.
So when used correctly… these options aren’t meme stock tools used by Reddit traders.
They’re sophisticated instruments used by…
Pension funds managing teacher retirements... University endowments funding scholarships... and Insurance companies protecting policyholders...
If they’re conservative enough for these institutions, they should be conservative enough for you.
So if you're anything like me and you’ve worked too hard to throw money at unnecessary risk... but you also can’t afford to sit in cash while inflation eats your purchasing power.
LEAPS give you a smarter, safer way to pursue growth while keeping your downside tightly controlled.
So even if you're a sceptic, you will benefit from this upcoming cohort of LEAPS Intensive
Oliver
P.S.
Warren Buffett calls derivatives “financial weapons of mass destruction” - yet Berkshire Hathaway routinely uses options to generate income and acquire stocks.
Even the most conservative investors use these tools when they understand them properly.
So maybe it’s time you did too…