What options trade will give the highest return if the market falls 20% in the next 12-18 months?

Question

If I have $100,000 (and don't mind losing everything), what options position should I take if I thought the market was going to make a 20% correction in the next 12-18 months? Also, how much profit can I expect if I am correct?

Answer 1

Depends how complicated you want to get. Unleveraged and excluding OTC your highest return would come from buying index puts worth $100k. There's too many factors to predict your profit as a generality.

Answer 2

Your question sets you up for financial disaster.
The three worst attributes (or enemies) of traders are;

Indecision
Fear
Greed

Did you know that 90% of all options expire worthless?
Your assumption is a dangerous place to start. But what's worse... with OPTIONS even if you pick the right direction you could still lose money (big time).

On top of that.... you're looking for financial suggestions from strangers whose qualifications and motives are totally unknown.

Best way to keep your loss at no more than 25%....... Send me $25,000 and spend the next year learning about trading (and keep the money in a gov't insured savings account).

Trading can be a great way to make very good money. It is rarly done without a lot of hard work and over a long period of time.

Answer 3

If you are that certain that market will correct 20%, sell leaps.