James joseph Cramer is an American television personality and the host of Mad Money, CNBC. On the show, he appealed to young investors, who were mainly new to the stock market exchange, and wanted long–term wealth. However, young investors who keep playing with options should own long-term wealth, suggested Cramer.
In addition, he advised investing just 2 or 3 shares in a month in the stock market if they could afford it. Reinvesting the dividend can come up with a chance of gaining wealth, and they would be able to make big money.
Furthermore, Cramer stated that the brokerage application Robinhood is the most popular App among young investors. They can make the most out of it. The App gained a revenue of $264 Million through transactional activities. Moreover, $163 Million came from Options Trading.
1. Make the Most Out of Robinhood, A Brokerage App
Robinhood is a financial brokerage application that has a mission to democratize money. Its multi-faceted features offer the customers various financial products and services at a lower cost.
They generate their revenue from:
- Stock loans
- Robinhood’s gold
- Cash-based income
- Management of cash
- Discounting market makers and trading revenues
Besides that, Cramer mentioned, the options can give an investor a right, but not the indebtedness to buy or sell a stock at the preordained prices in the future.
2. Try Option Activities
Option activities hit the record, powered by retail investors. Nevertheless, it is the formation of a derivative contract, which provides buyers a right to buy and sell the stock, especially at the chosen price, in the future. Simultaneously, this option also involves the buy and sell option with the same fundamental security.
This strategy can be a cheaper one because it proceeds when the investor makes money by selling the option to offset some of the buying cost.
3. Invest in Call Options
Basically, it’s a type of options contract. It provides the owner with the right, but not a liability, to sell or buy the stock at a chosen price. In addition, if an owner buys a call option, particularly, the owner can expect the underlying prices to go upwards.
Unlikely, buy shares from stock for potential profit from purchasing the call option.
It gives the owner a prediction of how far the stock will rise, as well as, directions in which the stock will move, and the dates predicted to get there.
However, Cramer has suggested that if an owner is buying a call option, it allows the user to turbocharge returns by taking additional risks.
4. Invest in Stocks Like IOS Apple
Undoubtedly, stocks like iOS and Apple are a better option to invest in.
Conversely, it’s a great opportunity to invest in a high-quality stock like Apple rather than messing with Robinhood App. It may aggregate more when people give it up, said Cramer.
Accordingly, it’s better to chase slow and steady instead of running towards a high growth over the night. Especially, gaining money in quality stocks like Apple could gradually pay off in the future, concluded Cramer.