What’s the Best Strategy for Riding a Bull Market?

$.DJI(.DJI)$ and $.SPX(.SPX)$ both reached record highs, with the Dow leading gains at nearly 0.7% to cross 44,000 points for the first time, while the S&P 500 surpassed 6,000.

Bitcoin hit a new high of $89,000, pushing up crypto-related stocks like $Coinbase Global, Inc.(COIN)$ and $MicroStrategy(MSTR)$ by over 20%.

Small-cap stocks also performed well, with $iShares Russell 2000 ETF(IWM)$ reaching its highest level since November 2021.

There's no doubt we're in an unstoppable bull market.

Create a poster titled 'Chase the High' with a green and black color theme. The poster should feature Bitcoin hitting a new high of $89,000 and the strong performance of stocks related to it, including COIN and MSTR, each up over 20%, and HOOD, up more than 10%. Include the record highs of the Dow and S&P 500, with the Dow crossing 44,000 points and the S&P 500 surpassing 6,000. Additionally, outline three investment strategies: 'Holding the Stock Directly,' 'Leveraged ETFs,' and 'Buying Call Options (OTM and ITM).' Highlight the pros and cons of each strategy. Make the design bold, modern, and visually engaging to reflect excitement in the market.

What’s the Best Strategy for Riding a Bull Market?

1. Holding the Stock Directly

• Pros: Buying and holding the stock directly is simple and direct. Compared to leveraged ETFs or options, owning the stock generally involves less risk.

• Cons: While owning stocks is safer, it can be slower to generate high returns.

2. Leveraged ETFs

• Pros: Deliver a multiple (often 2x or 3x) of the daily return of the underlying index. In a strong bull market, it provide significantly higher returns. Provide leverage without the need to trade on margin.

• Cons: Leveraged ETFs are designed to track daily returns, less effective for long-term holding. Might experience compounding losses in volatile markets.

3. Buy Out-of-the-Money (OTM) Calls

• Pros: Price is cheaper because strike price is above the current stock price. If the stock price rises significantly, OTM calls can yield very high returns.

• Cons: Carry a high risk of expiring worthless if the stock doesn’t reach the strike price. Lose value quickly as they approach expiration

4. Buy In-the-Money (ITM) Calls

• Pros: More likely to retain value and react more predictably to stock price movements because they already have intrinsic value.

• Cons: More expensive than OTM calls, so they require more capital. Still subject to time decay and expire, which can lead to losses if the stock doesn’t move as expected.

 How do you view?

What’s your pick?