THE RISK OF PUT AND CALL OPTIONS

One of the cardinal rules for managing your retirement / brokerage accounts is to never be talked into an investment if you do not fully understand how it works and the risks involved. Too often I have seen financial advisers put someone’s retirement funds into high-risk investments such as put and call options. These options are investment vehicles that involve the right to buy or sell a specific stock, for a specific price, and for a specific length of time—usually 90 days or less. If not watched closely by your investment adviser, a put or call option can expire worthless, wiping out your entire investment. Options are highly speculative and are not suitable for the average investor. If you have questions concerning put or call options or any other investments, contact Baker & Slaughter.