No one talks about it because no one even thought about it, in my humble opinion.

This blog doesn’t refer to options trading directly but discusses a very important danger that lurks beneath the sea of entrepreneurship. That danger is the untold lost opportunities due to hesitation of entering the business world. The lost opportunities are those goods and services that will not be produced because entrepreneurs will not want to risk getting into business knowing that governments can and will shut them down in a heartbeat. The lost opportunities are the discoveries and innovations that will not happen because investors will not risk capital in a world frought with danger of getting closed down indefinitely. Lost opportunities in the many jobs and careers that would otherwise flourish, all because bosses will be risk averse.

COVID is bad news, nobody denies that. But to put the economy on hold indefinitely is devasting and millions of businesses in the U.S. alone will not be opening up again. The spinoff from that alone is unfathomable. Even when the economy is phased in, the worry will always be there. The precendent has been set. Will a second wave cause another shut down? For how long? Who pays the bills? What do we do with perishable inventory?

If a business closes for a week, it may take a month or two to recover. If a business is boarded up for a month, it might be six to eight months to pull it back in the black. Now in the third or fourth month, it may be two years or longer to return to some form of normalcy, provided customers return, provided the business is well enought heeled to weather that closure and provided no further issues will develop.

It is for this reason that trading options is the choice of many, and we are seeing more and more venture into this realm. There are no bricks and mortar businesses to shutter, no employees to fire and try to re-hire, no inventory to liquidate and no fixed costs to absorb. Not to diminish the effects of COVID but as traders, we are left relatively unscathed through this horrible pandemic.

Now that we are ‘locked down’, isn’t it time to investigate options trading?

 

– Head Trader Hugh Grossman

June, 2020