I just made my riskiest investment ever

alright guys now I just have to preface

this video by saying that I am NOT a

financial advisor this is not any kind

of financial advice here guys

this is merely something I have decided

to do with my money and I understand the

massive amount of risk involved with a

trade like this but it’s one of these

trades out there where I could easily

lose 100% of my investment or I could

easily triple or quadruple my money

based on how this stock performs and the

idea for this trade came from something

I experienced about a week ago so guys

about a week ago I was on the hunt for

some home gym equipment because I

typically go to the gym three times a

week at least sometimes even four or

five if my schedule allows it and as I’m

sure we all know due to the closure of

businesses gyms have been closed for

about four or five weeks now now I

wasn’t exactly sure how long this

closure would last so I didn’t end up

buying any equipment but when the

closure was extended until May 15th I

said I got to get my hands on some home

gym equipment because I was losing my

mind not being able to work out so I

went on Craigslist and I typed in free

weights for sale and I found somebody

selling a Bowflex bench as well as some

adjustable weights for fifteen hundred

dollars now I’ve never bought any

Bowflex equipment so I didn’t know what

these things actually cost but I decided

to go on the Bowflex website to

determine what the actual price was for

these weights to see if this was

actually a fair price so I went on the

Bowflex website I found pretty much the

exact adjustable weight set and bench

that this person was selling and the

combination of those two items would be

around $500 brand new so this person was

price gouging tripling the price of this

equipment because of the demand for home

gym equipment

so I decided screw it I’m just gonna

order this off of the Bowflex website

but then I went to order this equipment

and I got hit with an out of stock

notification and then I looked at the

other

free weights that were for sale and all

of those across the board were also out

of stock so I decided to broaden my

search and I figured okay maybe I’ll

take a look at the bigger home gym

equipment it’s more expensive but it’s

probably a decent investment in case

anything like this happens again and yet

again I find they are entirely out of

stock of this multi-thousand dollar

equipment for setting up a home gym so

then this got me thinking and I said you

know what I bet you that Bowflex has

sold a lot more home gym equipment over

the last couple of weeks than they had

anticipated because nobody saw this

pandemic coming or the closure of

businesses so it wasn’t forecasted into

any of their sales models so I looked

into a little bit guys and I found out

that Bowflex is owned by a larger

company called Nautilus which is

essentially this very large home gym

equipment supplier now as far as the

stock goes it’s basically what we call a

penny stock meaning it trades for under

five dollars per share in fact earlier

this year before the pandemic started

this stock was barely above $1 per share

which is immediately a red flag that

this stock is under some kind of

financial duress because if a stock is

below five bucks per share that is a

major red flag meaning this company is

at risk of being delisted from the stock

market but in the recent weeks this

stock had gone from about one dollar and

50 cents per share up to around $5 per

share so I’ve noticed that I must not be

the only one that came to this

conclusion that Nautilus is likely going

to sell more equipment in the next

couple of months than anticipated so I

decided to go out on a hunch here guys

and I made a speculation and it’s very

important that we understand the

difference between an investment and a

speculation an investment is where there

is minimal downside the risk is

understood and it’s very unlikely that

you’re going to lose your entire

investment with a speculation it is

largely uncertain and you need to

understand that it’s very possible to

lose 100% of your in

state capital and as a general rule of

thumb guys back to Benjamin Graham you

should speculate with no more than 5% of

your portfolio so this is a relatively

small investment compared to my total

stock market investment but I didn’t buy

shares of Nautilus stock for the first

time ever I dove into the world of

options and I bought some options

contracts on Nautilus but this isn’t

going to be a video dedicated towards

options contracts I just want to give

you a quick explanation to what I

purchased and how this vehicle works and

what types of returns I may be able to

see as a result so I ended up buying

something called a call option on MLS

stock or Nautilus and this is like the

most basic beginner options out there

they get far more confusing than this

but a call option essentially gives the

owner the right to buy shares of a stock

at a set price at a set point in time so

essentially there is a set price that

you’re able to buy that stock at

regardless of if it’s double that price

or triple that price you can buy it at

that price at that date in time now the

important thing to understand here guys

is that if the stock is below that price

when that date comes around your option

expires out of the money and you lose

100% of the option premium which is

essentially the money that you pay in

order to have that option to buy those

shares

so I ends up buying six call options of

NLS for one dollar and fifty cents as

the premium for those options but you

have to understand it didn’t cost me $9

or a dollar 50 times 6 and that is

because every options contract is the

right to buy or sell 100 shares so by

purchasing 6 contracts I now have the

right to buy 600 shares of Nautilus at

the strike price of $5 per share so the

true cost here is a dollar 50 times 600

meaning these 6 options contracts cost

me $900 now if I had gone out and

purchased 600 shares of Nautilus stock

directly it would have cost me around

$3,000 so

by purchasing these options contracts I

am employing something called leverage

which gives me a control of a larger

amount of assets for a smaller amount of

money and that is why there is a

significant amount of risk associated

with options trading and it’s important

to understand here guys that if my

options contracts expire out of the

money so for example if Nautilus stock

does not climb above five dollars per

share

I lose 100% of that invested money now

if there’s somewhere above five dollars

but they’re not above my break-even

point I would make some amount of money

but I wouldn’t recoup my initial

investment so in order for me to make

money from these options contracts by

october 18th of this year nautilus stock

has to be at six dollars and fifty cents

or above for me to break even or make

money but the exciting part here guys is

that for every dollar above 650 that

Nautilus climbs I earn a return of $600

because I am in control of 600 shares

now I don’t necessarily have to hold on

to these options contracts until the

expiration I can sell them at any point

in time and since Nautilus stock has

gone up significantly over the last

couple of days I’m already in the money

on these options contracts with a pretty

sizable return based on the small amount

I have invested so I bought these

options contracts through Robin Hood

Commission free so now we’re gonna open

up the app and I’ll show you guys

exactly what I purchased and what my

return is so far on these options that I

purchased on Monday alright guys so here

we are inside of my Robin Hood app and

just so you guys are clear here that’s

not my total return on these options I

do have a couple of shares here of

Boeing and then two index funds that I

did in a $500 portfolio I put together a

couple of weeks ago but up top here you

can see my Nautilus options now have an

options premium of $1.00 90 and as I

said I paid a dollar 50 so as of right

now I am up 26% already on these options

contracts meaning if I were able to sell

them at the option premium here of $1.00

90

I would effectively make about $240 as a

return now again it’s important to

understand here guys that there’s no

guarantee that I could sell these

options at a dollar 90 because there’s

not a massive amount of people looking

to trade these options so the prices can

fluctuate drastically but what I’m

likely going to do since I have until

October 16th I’m gonna hold on to this

and see what happens

maybe if I double my money I will sell

these options but I’m gonna take it

day-by-day and see how this stock

performs but again guys this is not

something I would be doing with a

massive amount of money it’s a total

speculation or a gamble I could lose it

all or it could pay off pretty big but

since it’s the first time I’ve ever

traded options I wanted to share the

video with you guys and be as

transparent as possible so anyways guys

there you have it that is by far the

riskiest investment I have ever made in

my investing history let me know what

you guys think about this trade down in

the comment section below do you think

it’s a good one

do you think I’m gonna lose all my money

I would love to hear what you guys think

and if a lot of people want to see it I

can do an update video down the road if

I decide to sell these options or let

you know what I’ve done with this

investment if you guys want to check out

the Robin Hood investing app yourself

they offer commission free stock ETF and

options trading as well as

cryptocurrencies and I’ve got a link

down in the description below if you use

that link you’ll get a free stock when

you sign up I am affiliated with Robin

Hood so I may also earn a commission in

the process but thanks so much for

watching this you guys I hope you

enjoyed it subscribe and hit that bell

if you haven’t already and I hope to see

you in the next video